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Fresh storm brewing as Cell C employees blow the whistle

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Troubled mobile operator Cell C is facing a fresh storm, as employees allege impropriety, nepotism and exploitation of female staff with little assistance coming from the human resources department.

The employees say “unethical and reckless business decisions” have led to the demise of Cell C’s retail wing, which saw the telco announcing last week it will be shutting down 130 stores countrywide.

The employees, who asked for anonymity as they fear victimisation, claim the store roll-out plan was based on management relationships rather than a solid business plan.

“Poor business decisions of moving performing stores to non-performing areas enforces the corruption of awarding building leases to friends,” they allege.

“Employees face victimisation or are forced to quit when speaking out on alleged misconduct or reckless business decisions. A female who spoke up against management’s misconduct had her work taken away from her in an effort to frustrate her.”

In addition, they say: “The Cell C looting has not stopped as we see companies and service providers that are owned by the former Cell C cabal continue to milk Cell C dry.”

According to the employees, Cell C “went on a spree of opening stores with no business plan, case study or revenue forecast; less than a year after opening the stores, they now face closure”.

Cell C has denied the allegations, saying its management “upholds high standards of ethical behaviour and corporate governance”.

The financially distressed company is questioning the timing of the allegations as it is implementing section 189 of the Labour Relations Act.

The telco is currently engaging employees after announcing job cuts of up to 40%, targeting junior management and semi-skilled staff.

“The allegations against the company are scurrilous and Cell C questions the timing and motives of these matters being raised directly with the media, and in so doing, deliberately bypassing the company’s defined whistle-blower process,” says Cell C.

The employees further claim that a “predominantly male management team has created an environment where inappropriate sexual jokes are shared openly, with little or no action from HR”.

In response to this allegation, Cell C says: “Anyone with information regarding any act of impropriety committed in Cell C’s workplace should raise concerns via the company’s whistle-blower channels and these concerns will be investigated.”

The telco adds it will not be drawn into dealing with “speculative allegations in the public domain”.

Cell C is struggling due to operational and liquidity constraints and the current allegations present mounting challenges for Cell C management, which has been fighting to rescue the business.

The company implemented a turnaround strategy in March 2019 after being saddled with a debt and years of enduring market challenges.

Cell C has also faced multiple ratings downgrades from Standard & Poor’s due to its debt profile.

In April 2019, the agency lowered Cell C’s issuer credit rating to CCC- from CCC+, placing it deeper in trouble territory, and the following June, the telco was also downgraded.

Its standing was further lowered in August last year to SD (selective default) from CCC-.

The telco is currently waiting to conclude a fresh deal with special purpose vehicle Gatsby SPV, which it hopes will improve liquidity.

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