By Inhlase Reporter
Financially distressed Eswatini Posts and Telecommunications Corporation (EPTC) has quietly written off E13.5 million, 30 per cent of a E45 million debt owed by Eswatini Mobile, a private telecommunications company owned by the billion-emalangeni Inyatsi Group Holdings.
The controversial debt discount was approved despite a standing board resolution explicitly capping any settlement discount at 20 per cent, raising serious governance concerns and prompting demands for accountability.
In a “Deed of Settlement and Agreement to Pay” signed in January 2025 and seen by Inhlase, EPTC Managing Director Themba Khumalo and Eswatini Mobile Chairman Michelo Shakantu formalised a repayment agreement of E31.5 million, written down from an initial E45 million.
Eswatini Mobile was to pay the balance in eight equal monthly instalments, beginning January 2025 and ending August 2025. The terms appear routine until internal documents obtained by Inhlase are compared.
A board resolution dated 9 August 2024, signed by EPTC Chairperson Mtiti Fakudze, authorised a discount “between 15 and 20 per cent” on Eswatini Mobile’s debt. The 30 per cent discount signed off by Khumalo in January exceeds this mandate by 10 per cent.
Why did Khumalo authorise the excessive write-off? Was the board consulted or bypassed? Who benefits from the deviation? Inhlase posed these questions to the Board Chairperson, who said: “These matters were internal and discussed at the boardroom, and I can’t discuss them with the media as they are private to the company.”
The agreement further states that if Eswatini Mobile defaults in payment, the Corporation shall give fourteen (14) days to remedy the default. Section 6 of the clause further states that the Deed does not absolve Eswatini Mobile from obligations and does not prevent the Corporation from proceeding against Eswatini Mobile to recover any balance due. It further states that the Corporation reserves the right to call up the outstanding debt at any time and demand full settlement.
However, a deeper dive into EPTC’s internal documents unearths a crucial discrepancy that suggests a troubling disregard for established corporate governance and possibly, a deliberate subversion of board directives. A board resolution, bearing the signature of EPTC Board Chairperson dated August 9, 2024, explicitly authorised a settlement discount of “between 15 per cent and not more than 20 per cent” on Eswatini Mobile’s outstanding balance, which stood at E47 077 931.09 at that time. The 30 per cent discount subsequently granted by EPTC’s managing director in the final agreement with Eswatini Mobile far exceeds this board-approved range, leaving a chilling trail of unanswered questions about who authorised this deviation and why.
The Select Committee report revealed startlingly that the EPTC MD and Board do not report to the Minister of Information, Communications and Technology (ICT), Savannah Maziya. According to the report, the MD reports to the much higher authority, which left the minister ignorant about the EPTC’s performance. The report further accused the MD and board of directors of flouting good governance principles as provided under Part III of the King IV Report on good governance by failing to disclose the benefits and sponsorship they received from the current supplier.
A History of Mounting Debt
The colossal debt owed by Eswatini Mobile is not a recent phenomenon. It dates back to the mobile communications company’s inception, when it relied heavily on EPTC’s crucial infrastructure, including lines and towers, to transmit its burgeoning network. Years of accumulating unpaid receivables have been consistently flagged in EPTC’s audit reports, painting a clear picture of a public entity struggling to collect on services rendered to a private enterprise.
According to the 2021 audit report presented by the Auditor General (AG) office, the debt due from Eswatini Mobile had already surged from E21.6 million in 2019 to a substantial E43 million by 2020. Muzi Dlamini, EPTC’s then General Finance Manager, further exacerbated concerns when he appeared before the Public Accounts Committee (PAC). Dlamini, under questioning from the committee then chaired by Matsanjeni North Member of Parliament (MP) Phila Buthelezi (now the Minister of Labour and Social Security), revealed that the debt had escalated to a staggering E100 million and that negotiations were underway for its instalment payment. Despite these assurances, when EPTC faced the PAC again last year, the outstanding amount remained stubbornly high, hovering around E45 million – the figure that has now been partially written off.
Eswatini Mobile: Thriving While EPTC Suffers
The most damning aspect of this controversy is the stark contrast between Eswatini Mobile’s financial fortunes and the dire situation of its public sector creditor, EPTC. While EPTC battles for survival, seeking government bailouts and contemplating mass layoffs, Eswatini Mobile, under the umbrella of the Inyatsi Group, is not just surviving but thriving.
In March of this year, Eswatini Mobile proudly announced the official launch of its high-speed 5G network, a significant leap in the country’s digital infrastructure. This was made possible by an investment exceeding E30 million in Matsapha and Manzini alone. This followed a substantial E150 million investment in 2023, aimed at intensifying its growth across the Kingdom.
Shakunt, the Chairman of Eswatini Mobile, who signed the debt write-off agreement, has been a vocal proponent of the company’s aggressive expansion. He proudly stated that Eswatini Mobile, a homegrown telecommunications giant born in 2016, had “changed the entire industry by bringing innovations, affordability, and cheap data usage.” He further emphasised the necessity of investing more resources to “remain ahead of their competitors by providing a First World network.” Shakunt even claimed the 5G rollout alone had cost them about E100 million. These investments, alongside the Inyatsi Group’s declared nearly USD 1 billion turnover, paint a picture of a flourishing enterprise, seemingly well-equipped to meet its financial obligations without requiring such a significant discount from a struggling public entity.
EPTC’s Desperate Plea: On the Brink of Collapse
In stark contrast to Eswatini Mobile’s triumphant narrative, EPTC’s story is one of desperation and impending collapse. The parastatal has been making headlines for its crippling financial woes, culminating in a parliamentary intervention. Mbabane East MP Welcome Dlamini, seconded by Mtfongwaneni MP Nathi Hlophe, successfully moved a motion in the House of Assembly for the formation of a seven-member committee to investigate reports of downsizing and potential mass layoffs at EPTC.
The findings of this parliamentary select committee were chilling. During their investigations, EPTC MD Themba Khumalo, who authorised the 30 per cent debt discount, confessed that the parastatal was facing imminent collapse and was desperately seeking a half-a-billion Emalangeni bailout from international funders. The committee’s report explicitly stated, “EPTC is currently seeking funding of about E0.5 billion from outside and is awaiting the Cabinet’s approval.”
The depth of EPTC’s financial quagmire was laid bare during the MD and Chief Financial Officer’s appearance before the committee. MPs learned that the entity could no longer rely on dwindling dividends, particularly those from MTN Eswatini. Khumalo admitted that “if it was not for the EPTC dividends from MTN Eswatini, EPTC could have long collapsed.” This admission underscores the fragility of EPTC’s financial model and its heavy reliance on external sources, making the write-off of a significant receivable even more perplexing.
Further revelations from the parliamentary report highlight other critical issues plaguing EPTC. A staggering 70 per cent of the entity’s funds are consumed by salaries, pointing to an unsustainable wage bill that is bleeding the corporation dry. The MD informed the committee that the government had requested EPTC to write off its debt if the Eswatini Revenue Service (ERS) would reciprocate by writing off EPTC’s E290 million tax liability. This desperate plea for a tax write-off further emphasises the financial pressure EPTC is under; deciding to write off a private entity’s debt unilaterally is even more unfathomable.
The committee also heard that the Commonwealth Telecommunication Corporate Strategy 2015 had grimly recommended that workers “must be terminated or close and sell the entity,” a course of action that would undoubtedly have “seriously compromised the country’s security.” EPTC’s resistance to unbundling, citing the small size of Eswatini and the presence of two other competing entities (MTN and Eswatini Mobile), further illustrates the corporation’s difficult choices.
The report concluded with a stark warning: “Whatever the entity receives currently goes to cover debt, and the World Bank had suggested that EPTC should downsize. EPTC had hired too many people, yet the money was insufficient.” The committee acknowledged the brutal truth about EPTC’s overstaffing, noting the presence of both permanent and a high number of contract staff (211). While retrenchments were deemed inevitable, they were to follow “proper analysis, including the Board of Directors and unions.”
The EPTC also has E600 million in pension debts for its employees, which might affect their retirement.
The sequence of events and the glaring discrepancies between EPTC’s board resolution and the executed debt settlement agreement demand immediate and thorough investigation. Who authorised the deviation from the board’s approved discount range? Was due process followed in granting a 30 per cent write-off to a demonstrably financially robust company? What influence, if any, did Eswatini Mobile or the powerful Inyatsi Group exert on EPTC’s decision-making?
The decision to write off over E13 million in debt, particularly from a private entity investing millions in its expansion and generating substantial revenue, directly impacts EPTC’s ability to recover and serve the public. It raises concerns about whether those entrusted with managing critical national assets adequately protect the public’s interests.
ESPTC, established through an Act of Parliament in 1983, is a Category A State-Owned Entity that provides telecommunication and courier services to businesses and individuals.
Inhlase
