Cell C tightens screws after losing R130m through fraud

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Mobile operator Cell C says it has implemented safety nets to caution the business from further losses through fraud, after haemorrhaging R130 million in the last eight years.


It has, since publication of this story, emerged that the R357 million previously quoted in this article is actually the total value of orders with supplier, Cornastone, over the said period. The quantum of the fraud is estimated at R130 million.

Cell C is currently in court battling with former IT executive Mohamed Ismail Adamjee and others over fraud allegedly perpetrated by the group.

Adamjee is alleged to have orchestrated the theft, which drained the operator of R130 million since 2012.

Adamjee was employed by Cell C from January 2002 to 7 May 2020 and the court papers say since September 2011, he was employed by Cell C as an executive: business operations support, and during this period, he was involved in IT-related procurement.

It is alleged that during the period 2012 to 2019, he colluded with a director of a contracted entity responsible for IT and network services at his workplace and they reportedly inflated invoices, which resulted in an actual loss of over R130 million to Cell C and Adamjee personally benefited to the tune of R64 million.

The mobile operator says it has now closed the taps and tightened processes as part of its turnaround strategy.

Zahir Williams, Cell C chief legal officer, tells ITWeb: “Cell C’s new management have implemented a comprehensive business turnaround plan that includes robust governance processes to improve overall risk management and fraud prevention.

“The company has a zero-tolerance approach to illegal and unethical conduct, and will not hesitate to take appropriate action where there is evidence of wrongdoing.

“Cell C acted swiftly to involve law enforcement authorities to investigate incidents of serious workplace fraud and leading to the arrest of suspects who are now facing criminal prosecution. Cell C is co-operating with the prosecuting authority and will allow the law to take its course in this case.”

The tightening of financial flows and procurement processes by Cell C comes as the operator is on the verge of clinching a multimillion-rand refinancing deal.

The long-awaited recapitalisation programme was announced less than two weeks ago by Blue Label Telecoms, the largest shareholder of Cell C, after concluding a term sheet with financiers Investec Bank and First Rand Bank.

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