Dar es Salaam. TTCL Pesa Limited incurred a total loss of Sh360.3 million even as its equity only stands at Sh139.6 million, the latest report by the Controller and Auditor General (CAG) reveals.
Prof Mussa Assad, the CAG, said in the report that the company made losses as well as having excess liabilities over assets.
The firm was established as a subsidiary company of Tanzania Telecommunication Corporation (TTCL) whose objective is to undertake the Mobile Commerce-Electronic Money Issuance business. “I therefore recommend that the government review the mode of operation of [the entity] and inject resources to revamp its operations,” advises the CAG.
In other findings, Prof Assad also found the company’s Trustees did not hold any meetings for the period from July 1, 2017 to June 30, 2018. This indicates that Trustees’ approvals and attentions to the running of the business were not exercised as evidenced by the trust bank accounts which were opened without the approval of the trustees. The CAG review of TTCL Pesa Limited also established that the company does not have pricing policies with price variables. “In absence of the pricing policy, variables to be used to arrive at prices are not known and the basis for future review of tariffs becomes difficult,” said Prof Assad.
The CAG also found the company did not prepare its own budget which could serve as the base for resources allocation and financial control tool.
In absence of a budget, said the CAG, there will be no clear basis for allocating and controlling the firm’s financial resources. “I thus recommend the company quantify its annual operational activities into monetary expression.”
The CAG also noted the absence of lease agreement for mobile money platform used by TCCL Pesa Limited and its parent company, TTCL. TTCL Corporation as a payment system provider owns a mobile money platform which is used by TTCL Pesa Limited to issue electronic money.
Since the two are separate business entities, the CAG notes that the absence of lease agreement may lead to misunderstanding between them, especially when special circumstances are involved, such as payment on the usage of platform, tenure of leasing the platform, renew of the lease period and support services pertaining to mobile money platform, or other areas of concern.