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Govt seeks to nullify controversial M500 million GVG tender

Herbert Moyo

COMMUNICATIONS, Science and Technology minister, Samuel Rapapa, has teamed up with the Lesotho Communications Authority (LCA) to file a High Court application to nullify the controversial M500 million tender to Global Voice Group (GVG) South Africa for the supply of a Compliance Monitoring and Revenue Assurance system.

The system would enable the LCA to actively spy on citizens’ private communications on their mobile phones. It would also enable the LCA to monitor citizens’ financial transactions conducted through their mobile phones.

In essence, the applicants argue the GVG system would enable the LCA to venture into a realm of spying and surveillance “which would be more appropriate to the security and intelligence agencies”.

With the GVG system in place, the LCA would thus be enabled to trash citizens’ rights to privacy, access to information, freedoms of communication and association, Minister Rapapa and the LCA argue.

Former LCA chief executive officer (CEO), ‘Mamarame Matela, who was at the helm of the authority when the tender was awarded in 2020, has previously argued that Lesotho needs the compliance system to combat what she described as costly illegal transactions that are being done by unscrupulous people using their mobile phones.

However, the LCA now argues that the tender was unprocedurally awarded and if implemented, the GVG system would allow the LCA to conduct illegal snooping operations on citizens.

The case is expected to be heard on 18 October 2022. The Lesotho Times has seen Mr Rapapa and the LCA’s court papers wherein they argue that the tender was improperly and corruptly awarded to GVG at the instigation of Ms Matela.

They argue that in her spirited bid to ensure that the tender would be awarded to GVG, Ms Matela contravened several legal and corporate governance procedures. Among other things, Ms Matela is accused of forcing her way into the LCA’s tender evaluation committee. This is described as a highly irregular move as the same committee would have had to make its recommendations to her about which bidder to award the tender to. She is also accused of jumping the gun and writing to GVG to inform them of their “successful bid” even before the matter had been taken to the LCA board for approval.

In perhaps the most damning of the allegations made against her, the LCA and the minister accuse her of pushing for the implementation of the tender to give the LCA untrammelled powers to spy and monitor virtually every aspect of ordinary citizens’ communications on their mobile networks; Vodacom Lesotho and Econet Telecom Lesotho.

They say the GVG system would enable the LCA to listen in to subscribers’ phone conversations in real time, record such conversations and messages despite that there are no laws permitting the Authority to do so.

In addition, the GVG system would enable the LCA to have full access to the public’s information, including their mobile money transactions on the MPESA and ECOCASH platforms offered by Vodacom and Econet respectively. Again, there are no laws in place to allow the LCA to monitor people’s financial transactions, the applicants argue.

Not only would this be illegal but it would also allow the LCA to encroach onto the mandate of the Central Bank of Lesotho (CBL), which has the sole legal authority to monitor and regulate all financial services in the country.

The LCA, Mr Rapapa and Attorney General Rapelang Motsieloa are the first to third applicants respectively while GVG is the only respondent in the application.

The application, and in particular the explosive allegations against Ms Matela, reflect a new twist to the whole GVG saga.

All along, the former LCA CEO has been the most vocal on the issue.

In previous interviews with this publication, both Ms Matela and GVG CEO, James Claude, denied allegations of impropriety, arguing that the tender was awarded after an open and transparent bidding process.

They have both insisted that the installation of the Compliance Monitoring and Revenue Assurance system is in Lesotho’s best interests.

They have argued that Lesotho needs the compliance system to combat costly illegal transactions that are being done by unscrupulous people using their mobile phones.

Mr Claude said experiences from other countries such as Tanzania had shown that African countries lost out on potential revenue earnings from fraudsters who were able to pass off international calls as though there were local calls thus depriving service providers of revenue they should generate from such international services.

“If you’re in Lesotho and you receive an international call which registers on your phone as a local call, that is proof that someone has bypassed the system and is committing fraud by pretending to be a local caller. This illegal practice is called simboxing. This simboxing fraud is a reality everywhere and I think Lesotho, like other markets in Africa, is a victim of this kind of fraud. This can be solved through a joint effort where the LCA, as the regulatory body works alongside the mobile network providers using our compliance system.

“This system can help generate additional revenue for governments,” Mr Claude had said in an interview in June 2021.

However, LCA acting CEO, Nizam Goolam’s, affidavit tells a different story.

He pleads with the court to nullify the tender award because failing to do so would have negative “far-reaching implications on the country as a whole”.

He lists several alleged anomalies with the tender award including the fact that there are currently no laws permitting the LCA to monitor mobile communications and mobile money transactions.

He alleges that GVG was also allowed by Ms Matela to submit its bid electronically in violation of LCA procedures which require that such bids be submitted physically.

Even when they held virtual meetings with GVG officials, Mr Goolam alleges that the meetings were done from Ms Matela’s laptop. He says they were forced to crowd around her laptop to participate in the meetings and no minutes were ever taken at the meetings.

In fact, the first anomaly, Mr Goolam says, was that the GVG monitoring system was not requested by the technology department which he heads. He argues that as the department which would have used the monitoring system, they should have been the ones who should have requested it, not Ms Matela who does not have the relevant technology expertise.

“The need to purchase the system was not at the instance of the user department-my department to be specific. It was an initiative of the erstwhile CEO-Ms Matela,” Mr Goolam states in his affidavit.

“Ms Matela sat as a member of the evaluation committee. It was not procedural for her to evaluate and recommend a bidder to herself. This was a gross irregularity which was and is fatal to the legitimacy of regularity of the tender.

“The act of… Ms Matela of informing the respondent that they were the preferred bidders prior to the (LCA) board’s approval was yet another gross irregularity that compromised the legitimacy of the transaction,” Mr Goolam states.

He further alleges that Ms Matela “arbitrarily” gave a higher score to GVG in the evaluation process and refused to have it discussed by the tender evaluation committee.

Apart from the flawed process leading up to the tender award, Mr Goolam argues that it must be nullified because there is no legal basis for the LCA to have the monitoring system. If anything, the system would enable the LCA to snoop on citizens in contravention of their rights.

“Real time monitoring means extracting data from networks, like Vodacom and Econet, as it passes through the network. She (Matela) further told the meeting that she wanted a system that would monitor all traffic, generate records of traffic and monitor simboxing.

“GVG would also analyse financial transactions such as money remittances and mobile money to extract in-depth details of such transactions which is outside the mandate of the authority (LCA) and regulated by financial regulators. The monitoring of remittances and mobile money are financial services regulated by the Central Bank of Lesotho and not an LCA mandate or function.

“As a result, the initiative was a clear and utter overreach which bordered on illegality. Perhaps more significantly, there are no laws in place authorising the LCA to intercept and monitor the activities of citizens on the communication networks. There are currently no legal provisions to support unrestricted access to personal information. This function was and is outside the mandate of the LCA.

“This type of activity would be more appropriate to the security and intelligence agencies and as such, it is and was misplaced and not aligned to the LCA mandate,” Mr Goolam states.

On his part, Mr Rapapa says he agreed to be part of the lawsuit “to protect the interests of the Kingdom of Lesotho in respect of a transaction that was compromised and fatally flawed to the core”.

“I specifically depose this affidavit in order to weigh in on the issues raised and to significantly indicate that the nullification and revocation of the contract is supported by the Government of Lesotho. I confidently say this because of the public interest nature of the issues raised in this litigation and also because of the implications of this contract on the whole beyond the telecommunications sector,” Mr Rapapa states.

He said as a trained accountant, he was taken aback by the fact that GVG was paid an untaxed amount of M7 242 021, 15 as a “commencement fee” for the project.

“This payment was payable net of taxes and in the event of any imposition of any kind of taxes on this commencement fee, the tax was to be assumed by the LCA. I found this not only to be odd but also grossly unconscionable and clearly not in the best interests of the Kingdom of Lesotho. I am advised by my attorney and believe the same to be true that a commercial transaction between a parastatal and a commercial entity cannot be crafted in a manner that such entity is insulated from tax obligations in spite of trading within the Kingdom of Lesotho. This was a fatal flaw which does not serve a legitimate government purpose.

“She (Matela) violated protocol and the dynamics of corporate governance by overreaching the board by penning correspondence dated 19 May 2021 demanding promulgation of regulations which were supposed to be a vehicle for the transaction to thrive,” Mr Rapapa says.

He also accuses Ms Matela of acting outside her powers by writing to former Communications Minister, Keketso Sello, demanding that he promulgates enabling regulations to give legal effect to the monitoring of citizens’ communications via the GVG system.

“The promulgation of subordinate legislation is firstly an issue that must be debated and accepted at the policy level before being turned into law. It is not for the chief executive of a parastatal to direct a minister to promulgate subordinate legislation. The very act of an employee penning a letter to a member of the executive demanding promulgation of regulations was grossly irregular and if anything, illegal.

“I noted aspects where she (Matela) dealt with allegations of corruption and alleged extortion by my predecessor (Sello) but such allegations were a separate issue that ought to have been dealt with by the appropriate law enforcement authorities. The conflation of issues leading to the erstwhile CEO threatening a member of the executive with legal action if he fails to promulgate regulations was not only erroneous in law but speaks to the extent to which the said official was professionally uncouth and unsuited for the position,” Mr Rapapa states.

Ms Matela has vehemently denied corruption allegations in the award of the tender.

Instead, she has accused Mr Sello of refusing to promulgate the regulations until he was given a M3 million bribe by GVG. She said the minister also demanded to have his company subcontracted by GVG before he could approve the tender.

She also accused Mr Sello of demanding sexual favours from her as a condition for keeping her job. She even reported the sexual harassment claims to Prime Minister Moeketsi Majoro who has to date remained tight-lipped over the issue. She subsequently reported the matter to the police who said they completed their investigations last year and submitted the docket to the Director of Public Prosecutions (DPP), Hlalefang Motinyane.

Ms Matela had subsequently been sent on forced leave pending the expiry of her contract on 31 March 2022. It was not renewed when it expired. Ms Matela has since joined politics as deputy leader of the Teboho Mojapela-led Socialist Revolutionaries (SR).

Herbert Moyo is a journalist researching digital surveillance with support from
the Media Policy & Democracy Project (MPDP) jointly run by the University of Johannesburg and Unisa.