Kenya’s Safaricom fires 33 staff members over corruption and fraud allegations

Safaricom, Kenya’s leading telecommunications company, has revealed that it had to part ways with 33 members of its staff due to allegations of corruption and fraud during the financial year that ended in March 2023.

The telco giants have let several staff members go for similar reasons in recent times and this latest figure represents the highest in the past four financial years, making it a concerning trend in the company.

In the previous fiscal year, ending March 2022, Safaricom dismissed 24 employees as part of its anti-corruption efforts. While this was a decrease from the preceding year when 28 employees were let go, the recent increase to 33 dismissals is raising eyebrows.

Regarding these latest dismissals, 14 cases were related to Sim Swap incidents—a notorious issue in Kenya that often results in financial losses and debt for unsuspecting victims. Another 17 cases involved breaches of company policies and procedures, while 2 cases were linked to asset misappropriation, a type of employee fraud where company or client assets are misused for personal gain.

Safaricom forwarded 9 of the investigated fraud cases to law enforcement agencies for further action, marking the highest number of such cases in the past four years. This highlights the telco’s commitment to addressing corruption and fraud not just internally but also by cooperating with external authorities.

However, amidst these moves, Safaricom reported zero cases related to data privacy breaches in the past year, which is an improvement compared to two years ago when they investigated 22 cases of data privacy breaches.

Safaricom, which employs just over 5,000 people, acknowledges that 33 dismissals while concerning, represent a relatively small proportion of their workforce. They have been actively working on ethics training for their employees, with 98% of staff benefiting from such 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.

The telecom’s report further explained that in the last four years, the telecom has given ethical training to 72,063 of the 270,360 M-Pesa agents.

Earlier in the year, the Directorate of Criminal Investigations (DCI)  and Safaricom announced they would be working closely together to investigate M-Pesa fraud cases. Last month DCI detectives arrested two Sim Swap fraudsters allegedly linked to the Mulot gang.

Additionally, Safaricom has taken measures such as social media campaigns, text messages, and initiatives like “Jitambulishe” to raise awareness about fraud among its users. There is also an upcoming announcement hinting at further security enhancements, including obscuring M-Pesa pins during entry, which was mentioned during an investor briefing in May.

Read More: Safaricom launches M-Pesa mobile money service in Ethiopia

The financial implication of these fraud cases on Safaricom’s bottom line

Examining the financial implications of the recent fraud cases on Safaricom’s financial health is crucial. Investors, stakeholders, and the public will want to understand whether these incidents have had a substantial impact on the company’s bottom line.

To date, Safaricom has not publicly disclosed specific monetary losses linked to these fraud cases. However, it is important to note that fraud can have multifaceted financial repercussions beyond the immediate losses incurred. These implications may include legal expenses associated with investigations and potential lawsuits, costs related to implementing enhanced security measures, and the potential erosion of customer trust, which could affect revenue in the long term.

Safaricom’s ability to manage these financial implications effectively will be a key indicator of the company’s resilience and commitment to safeguarding its financial stability amid challenges posed by internal fraud.

Stakeholders will closely monitor any future financial disclosures from Safaricom to better understand the extent of these implications and the company’s strategy for mitigating them.

Read More: Safaricom closes shop in Ethiopia’s Amhara region following state of emergency