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Safaricom And Huawei: A Union Between Two Crooked Sisters? Another Gem From Safaricom KPMG Audit

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The name Huawei is becoming Synonymous with corruption, single-sourcing and the Culture of Impunity. Why is it that Huawei can’t do a clean deal or why is Safaricom always using the suspect Huawei in its various operations?

It would be a grave mistake for me to talk about the Huawei Convergent Billing System Saga as per Safaricom KPMG Forensic Audit report without mentioning other sagas where the Suspect Huawei has made a debut.

Ken Kiplagat is not just your ordinary Joe. He is the real McCoy, who was admitted to the bar in 1989 so he is Under-50. He is also a former Director at Communications Commissions of Kenya (CCK) now Communications Authority of Kenya at the turn of the century, where he allocated himself frequencies, which he sells to media owners.

Caption: Dr. Ken Kiplagat of Okoth and Kiplagat Advocates. The man Safaricom’s Cheeky PR once accused me of working with, in order to destroy Bob Collymore.

But his most prominent company is Tetra Radio Limited which bid for a $5.2 million (Sh447 million at current exchange rates) contract to operate and supply a digital radio communication system for the Kenya Police.

The company won the bid in 2002 to supply a commercial trunk radio network, which would operate on the UHF band.

Five years later, the system was yet to be supplied following wrangles between Tetra Radio and the Communications Commission of Kenya (now the Communications Authority of Kenya, CAK), prompting the regulator to cancel the tender in 2007.

Tetra Radio went to the High Court the following year to have CAK reinstate the tender and stop the regulator from allocating the frequencies to another entity.

The company won the case, and by a judgment dated June 24, 2011, CAK’s decision to cancel the tender was reversed and the regulator was prohibited from utilising, activating or allocating the frequency range awarded to Tetra Radio.

CAK Director General Francis Wangusi wouldn’t keep quiet he made media reports and even presented his report to parliament accounting that Tetra Radio was incapable of implementing the security system due to lack of proper technical and financial support. A company that operates with close to 45 million pounds (equivalent to 6.75B ksh.) and that had a good reputation in Spain, Austria, The United Kingdom, Iraq, Poland among others was incapable of setting up security systems in Kenya? Isn’t this ironical?

Caption: Francis Wangusi, CCK

After Tetra was successfully eliminated new players came into the game.

Huawei, ZTE, and Safaricom were determined to win the security surveillance system. It was a battle that saw this three giant electronic and communication companies mire in controversy and morphed to feature bitter corporate and diplomacy wars that ended in court.

Huawei who were so much determined to hit the contract would do anything to get it and it is at this point that they arranged for ZTE managers to be deported back to their country being conscious of the fact that Safaricom was incapable of providing security and communication surveillance on their own. This was made possible through Office of the President and the Attorney General Githu Muigai . The deportation orders were signed by the then Interior C.S Joseph ole Lenku and ZTE was seen out of the competition.

After the court ruling, Safaricom won the tender to supply, manage install and maintain security surveillance and communication systems.

Safaricom then in June 2014 confirmed that Chinese giant telecom Huawei would provide infrastructure support for 15 billion, but then billed the Kenya Government for Kshs. 45 Billion. Outright theft.

The Corporate game? Safaricom pays Huawei Sh45 Billion for rolling out the system and Huawei, in turn, pays the Sh30 billion difference into an agreed overseas account. Safaricom – and its mother company Vodafone – comes out “clean” and in return obtains a massive benefit: preferential 4-G frequency spectrum which enables it to permanently have a chocking monopolistic hold over Kenya’s telecommunication sector.

Apart from the Police-Safaricom-Huawei Saga, I exposed the Cheza games Saga that had conned Kenyans Billions. In the Saga, Safaricom Insiders were colluding with owners of Cheza games ” Huawei Technologies to Defraud Kenyans ” Just as they did in the CCTV Saga. In the Cheza games, Bob Collymore refunded Billions that had already been stolen, but nobody was held into account, Wow!

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Caption: Cheza Games Scam run by Huawei Technologies and Safaricom Insiders was busted and Safaricom CEO Bob Collymore had to refund Billions stolen. 

Scouring through the Safaricom KPMG Report, the words Single-Sourcing and selective bidding hit you like real shit. What we see in the whole report is nothing but corporate dirt that the Kenyan media shielded from Kenyans.

Huawei was single-sourced to design and implement a Convergent Billing System at Safaricom. The Single-Sourcing report that was signed 26th November 2012 indicates that Huawei had previously successfully delivered the Open Charging system (OCS ) which was a pre-pay only solution and precursor to the convergent billing system (CBS) that has both pre-pay and post-pay rating, charging and billing functions.

KPMG Audit report further indicates that Huawei had subsequently successfully delivered changes requested by Safaricom business units after the implementation of the CBS. It is indicated that Huawei owned the CBS solution and was best placed to deliver customizations requested by Safaricom.

What followed was a commercial analysis for Huawei offer which detailed cost in man-days coupled with blend-rate.

With just that, It was recommended the contract be awarded to Huawei.

In a contract signed in 21st of December 2012, Safaricom finally engaged Huawei their billing system for 36 months. John Tombleson( Was adversely mentioned in One Campus Fraud ) executed the contract on behalf of Safaricom. Wang Chao signed the contract in the name of Huawei; There were two witnesses whom their names don’t really matter at this point.

Although the contract stipulated a term of 36 months the single-source justification report stated that the contract period for the commercial framework was three years subject to successful annual performance evaluation.

The Scope Included the Following Customizations as attached hereunder.

For this single-sourced deal, Huawei was paid USD 10,612,700.97 Or a total of Ksh 839,069,853.73!

For those not in the know, Huawei Technologies Ltd. is the biggest trading partner of Safaricom because it is Huawei equipment that runs Safaricom. But why is the Company not doing any clean deal leading to fleecing of Kenyan Taxpayers and Safaricom Shareholders?

In the final Summary that took a look at the work done by Huawei, everything appeared inadequate. But the mother of all shocks is the fact that Safaricom did not state what corrective measures that were taken( Or are being taken ) to Compel the scandalous Huawei to do a complete Job that had already been paid for.

Again, what we refuse to buy is that this was not a scheme by our friends at Safaricom to defraud the Telco. You see, this was a single-sourced deal, inadequate work is done but there are no efforts to make Huawei refund the millions for no work done!

But the buck stops with Safaricom CEO Bob Collymore! Safaricom Shareholders deserve better and that includes the serious fraud office holding those who failed to perform their duty into account !


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