Safaricom, the most successful telecoms firm in Kenya, has disclosed that it was forced to let go of 33 members of its personnel during the fiscal year that ended in March 2023 because of charges of fraud and corruption committed by those employees.
The telecommunications industry giants have terminated the employment of many staff members in recent times for reasons that are very similar to one another. This most recent statistic reflects the highest level seen in any of the preceding four fiscal years, making it a troubling trend within the corporation.
In the preceding fiscal year, which ended in March 2022, Safaricom terminated the employment of 24 people as part of its ongoing efforts to combat corruption. Despite the fact that this number is lower than the previous year’s total of 28, which represents a decline, the most recent total of 33 represents a rise that is causing eyebrows to be raised.
In regard to these most recent dismissals, 14 cases were related to incidents of Sim Swap, which is a well-known problem in Kenya that frequently results in victims incurring financial losses and debt that they were not expecting. Another seventeen cases involved violations of corporate regulations and procedures, and two cases were tied to asset misappropriation, which is a sort of employee fraud in which company or client assets are misused for personal gain.
Read also: Safaricom and Google Partner on YouTube content production
How Safaricom has handled the fraud
The number of fraudulent incidents that were reviewed by Safaricom and then sent to law enforcement organizations for further action reached its highest point in the past four years when compared to similar numbers. This demonstrates the telecommunications company’s dedication to combating fraud and corruption not only within its own ranks but also by working cooperatively with authorities from other jurisdictions.
However, despite all of these changes, Safaricom has not reported a single instance of a data privacy breach in the preceding year. This is a significant improvement when compared to the previous year, in which they looked into 22 instances of a data privacy breach.
Even though it is troubling, Safaricom, which has just over 5,000 employees, concedes that the number of terminated employees, 33, represents a relatively tiny percentage of their total staff. They have been putting a lot of effort into providing their team with ethics training, and so far, 98% of the workforce has benefited from these programs.
“Training, both internally and externally, helps to promote our ethical culture. As indicated in the table, a total of 98% of our staff benefitted from ethics training, and the entire Board was trained on Anti-Money Laundering /Countering the Financing of Terrorism (AML/CFT),” says Safaricom in the latest report.
In addition, the report from the telecommunications company indicated that, over the course of the past four years, the company has provided ethical education to 72,063 of the total 270,360 M-Pesa agents.
At the beginning of this year, both the Directorate of Criminal Investigations (DCI) and Safaricom made public announcements that they would be collaborating extensively on the investigation of M-Pesa fraud cases. In the past month, officers from the DCI apprehended two fraudulent Sim Swap users who are suspected of having links to the Mulot gang.
In addition, Safaricom has implemented campaigns on social media, sent out text messages, and participated in activities such as “Jitambulishe” in order to educate its customers about the dangers of fraud. During the investor event that took place in May, it was mentioned that there would be an impending announcement that would hint at further security changes. One of these enhancements will involve hiding M-Pesa pins during entrance.
The impact of the fraud on Safaricom
It is essential to investigate the financial effects that the recent fraud cases have had on Safaricom’s state of affairs financially. Investors, stakeholders, and the general public will have an interest in knowing whether or not these incidents have had a significant impact on the bottom line of the organization.
To this day, Safaricom has not made any public statements regarding the particular monetary damages that were incurred as a result of these fraud cases. However, it is essential to keep in mind that fraud can result in a variety of further financial losses in addition to the ones that are suffered right away. These repercussions may include legal expenses involved with investigations and potential litigation, costs related to the implementation of additional security measures, and the potential erosion of customer trust, which might have a negative effect on revenue over the long run.
The degree to which Safaricom is able to handle these financial ramifications properly will be a major measure of the company’s resiliency and dedication to maintaining its financial stability in the face of problems posed by internal fraud.
Stakeholders will keep a close eye on any future financial disclosures made by Safaricom so that they may gain a better understanding of the scope of these consequences and the company’s plan for minimizing their impact.