Vodacom Group Limited is a leading African communications company providing a wide range of communication services, including mobile voice, messaging, data, financial and converged services to 116 million (including Safaricom) customers.
The company has grown its mobile network business to include operations in Tanzania, the DRC, Mozambique, Lesotho and Kenya, covering a population of over 289 million people.
In Lesotho, the group owns 80 percent stake in Vodacom Lesotho while a local company, Sekhametsi Investment Consortium owns 20 percent stake in the company.
The leading telecommunications company registered a 15.4 percent growth in data customers against the 9.1 percent recorded in the previous year. With regard to Mpesa services, Vodacom Lesotho saw a 49.5 percent growth in a 30-day active Mpesa customers, thus against 37.9 percent recorded in 2019 fiscal year.
This is despite the deteriorating economic pressure in recent years coupled with a number of challenges towards the end of the 2019 financial year, which saw the company being accused of non-compliance with the regulatory fees for the financial year 2018/19 by the Lesotho Communications Authority (LCA).
The company was further accused of failure to appoint independent auditor as well as failure to meet Universal Service Fund obligations.
In a statement, the LCA revealed that the licence conditions of Vodacom Lesotho require them to submit annual financial statements accompanied by certification issued by independent auditors.
“…Secton 97(2)(g) of the Lesotho Companies Act, 2011 prohibits a company from appointing a person related to an officer (director) of a company in a position to influence financial transactions or financial statements of a company as its auditor,” LCA said in a statement last year.
But for as far back as 2015, the LCA noted that Vodacom Lesotho directors and shareholders failed to appoint independent auditors as specified in section 97(2)(g) in that the external auditor is a relative of the Chairman of the Board of Vodacom Lesotho.
According to LCA, the explanation provided by the telecommunication company revealed a deliberate intention to undermine compliance with laws of Lesotho.
On August 2 2019, LCA issued a penalty of M8.2 million against Vodacom Lesotho for failure to regulatory fees as they fell due and payable on or by 1 July the same year.
The LCA (Licensing Classification and Fees) Rules 2018 prescribe on clear terms that the Authority shall impose penalties for non-payment of regulatory fees and prescribes how these penalties shall be imposed.
In December 2019, the LCA issued a notice of enforcement proceedings against Vodacom Lesotho on the basis of its opinion of non-independence of its external auditors.