Vodacom shareholders decided not to take action against former CEO Alan Knott-Craig following a forensic report into nepotism allegations, the company said on Sunday.
An “independent report” was commissioned in 2008 by Vodacom shareholders Telkom and Vodafone to investigate accusations made by “several former employees”, said company spokesperson Richard Boorman.
The Sunday Times reported that a KPMG forensic audit report was compiled after two former Vodacom employees accused former CEO Alan Knott-Craig of exploiting company resources for the benefit of family members.
According to Boorman: “All 18 allegations were examined closely and two were deemed worthy of more detailed review.
“Through this independent process, both of these cases were reviewed to the satisfaction of Vodacom’s shareholders and in neither case was it deemed necessary to take any action against any individuals.”
The Sunday Times reported that the former Vodacom board commissioned the report in August 2008 after Telkom CEO Reuben September and Vodafone CEO Gavin Darby were handed a dossier of allegations against Knott-Craig.
According to the newspaper, it was alleged that Knott-Craig helped his son with business ventures using Vodacom resources. He also allegedly awarded a multimillion-rand contract to a marketing
and advertising company run by family members.
The Sunday Times reported that Knott-Craig had allegedly arranged for Vodacom to train an employee in the United States to become a magician.
“Although the cost of the training was not disclosed, the network operator spent $7 141 for ‘magician’s props’.”
Knott-Craig’s son, Alan Jnr., told the paper that his father had been “completely exonerated” by the KPMG report.
“Two disgruntled former employees made several allegations against my father over a year ago. The Vodacom board decided to institute an investigation to either confirm the charges or clear
my father’s name. Upon studying the KPMG report the board decided to completely exonerate my father.”
Knott-Craig Jnr. also showed the newspaper an email, apparently from former Vodacom chairperson Oyama Mabandla, dated December 3, 2008, which read: “The board has looked into the KPMG report. We have decided to close the matter.”
Vodacom was subpoenaed last week to present the report to the Labour Court in connection with a dispute apparently involving one of the former employees who made the allegations against Knott-Craig.
Boorman told the newspaper the report was in the hands of shareholders and not Vodacom management. Vodacom’s current chairperson Peter Moyo told the Sunday Times that KPMG had “made it clear that the report should not be used for anything other than what it was commissioned for”.
Under Johannesburg Stock Exchange listing rules, the company would have been required to disclose any corporate governance violation risk when listing.
On Sunday, Boorman said the report’s recommendations were implemented well in advance of Vodacom’s listing as a public company.
“Vodacom’s board acted quickly and decisively … correct procedures were followed, and … Vodacom’s shareholders were kept fully apprised of all developments in relation to these allegations.” – Sapa