September 28, 2018 / 3:14 PM / a year ago

Vodacom Tanzania says incoming CEO denied work permit

DAR ES SALAAM, Sept 28 (Reuters) - Vodacom Tanzania said on Friday the government had denied its incoming chief executive officer, a Kenyan, a work permit, and it would have to restart the recruitment process.

In April, Vodacom Tanzania named Sylvia Mulinge, at the time head of business at Kenya’s biggest telecoms operator Safaricom to the post. She was meant to take up her position on June 1.

“Vodacom Tanzania can confirm that it has received notice from the Labour Commissioner declining a work permit application for Sylvia Mulinge as CEO of Vodacom Tanzania,” it said in a statement.

Ali Mufuruki, Vodacom Tanzania’s Chairman, told Reuters the company had been given reasons by the government, but it cannot disclosed them. Mufuruki said it was up to the Tanzanian government to give the reasons.

The government has been accused by investors of delaying or rejecting work permits for foreign workers, complicating their operations.

Tanzania’s privately-owned Citizen newspaper reported on Friday that Kenya and Tanzania are embroiled in a trade dispute, with each side imposing tariffs on each other’s goods including sugar, flour and ice cream.

They are both members of regional trade bloc East African Community, which is aimed at promoting free movement of goods and services among its members, who also include Burundi, Uganda, Rwanda and South Sudan.

Vodacom, which did not give reasons for why the permit was denied, said it had appointed Hisham Hendi as its acting chief executive officer in the meantime.

“Vodacom Tanzania will now recommence the search for a suitable replacement and remains fully committed to identifying a candidate that will not only inspire confidence in investors but also have the requisite governance capability as CEO of a listed company.”

Mulinge, who had been at Safaricom since 2006, was to replace Ian Ferrao who joined Vodacom Tanzania three years ago and decided not to renew his contract with the company.

Ferrao led the company through a $213 million initial public offering last August, Tanzania’s largest ever, which attracted more than 40,000 local investors, most of whom were first-time participants in the country’s stock market.

Foreigners, initially banned from participating, bought 40 per cent of the shares.

The move was part of a government directive for mobile companies to list a minimum 25 percent stake at the local Dar es Salaam Stock Exchange.

Vodacom Tanzania, a unit of South Africa’s Vodacom, is the only telecom company so far in Tanzania to list at the DSE, where it closed on Friday at 800 shillings.

Vodacom controls 32 percent market share of the country’s 40 million mobile subscribers. Other major players include Tigo Tanzania, a subsidiary of Sweden’s Millicom and a local unit of India’s Bharti Airtel. (Reporting by Nuzulack Dausen; Writing by George Obulutsa; Editing by Alexander Smith)

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