We are not on the verge of collapsing: Econet
THE management of telecommunications company Econet has refuted allegations that it is experiencing serious financial challenges that may lead to its collapse.
The management said this in a statement on Thursday. They said the statement was in response to circulating media messages that suggested that the company is facing challenges that may lead to its closure. The management labelled the claims as “fabricated rumours”.
The statement from Econet also comes after the Finance Minister, Moeketsi Majoro, recently told the Public Accounts Committee (PAC) that Econet owes the government M450 million.
Dr Majoro said this before the Public Accounts Committee (PAC) on Wednesday.
Dr Majoro cited Econet along with Lesotho Flour Mills and Avani hotels for failing to consistently pay dividends to government as its shareholder.
“We are concerned about these companies namely Sun International (Avani Hotels), Econet Telecom Lesotho and Lesotho Flour Mills.
“However, Avani has since declared dividends for 2017 and 2018…, what we are doing now is to review their management agreement and the shareholders agreements as we want to do away with management agreement. We are going into a new agreement with them and a draft agreement is already in place awaiting to be approved by the cabinet.
“As for Econet, they are still a bit behind. Last year they declared a M80 million loss, and this year they declared another loss of M63 million.
“So, here we have a serious problem and clearly paying dividends is a long way off for them,” Dr Majoro told the PAC.
Dr Majoro said it was worrying that the company appeared unstable with a market share of just 20 percent as compared to their competitor Vodacom’s 80 percent.
“What is worrying about the company is that it looks unstable with a market share of just 20 percent while Vodacom Lesotho holds the remaining 80 percent?
“It (Econet) has to work very hard to reclaim its former glory, especially considering the fact that it was initially Lesotho Telecommunications Corporation (LTC) and the first company to enter the market but now it holds only 20 percent of the total market share.
“We are going to meet with them in June or July to discuss the future of the company.
“The most worrying thing is that Econet owes government M450 million, and while they are paying it gradually, we are worried that the company might collapse before fully settling the debt.
“I do not wish to give the impression that the company is on the verge of collapsing, I am merely saying it should at least be able to compete with Vodacom because it has the potential to do so,” Dr Majoro said.
While Econet’s statement did not mention the minister’s sentiments, the management assured their clients that the company is not on the verge of closing.
“It has come to the attention of Econet Telecom Lesotho that there are fabricated rumours trending in the media about the financial standing of the company which will supposedly lead to the company’s collapse. This is not true.
“The company has a long term facility with the government which it continues to service as per agreed terms.
“New management has now been appointed to take over management of the company. New changes include launch of a new 5G ready network to provide best service to the customers,” Econet said in its statement.
Econet also said the rumours are meant to cause confusion and stimulate lack of trust among Econet’s clients.
“Econet assures the public all their EcoCash funds remain secured in the trust fund managed by reputable banks within the country.
“The rumours are meant to cause confusion and stimulate lack of trust among Econet Telecom Lesotho’s internal and external customers.
“The management of Econet Telecom Lesotho warns those who are responsible for circulating these unsubstantiated rumours to stop immediately as the company will take legal action against them,” Econet said.