Airtel Kenya lost $6.7 million in employee mobile money fraud

Friday June 28 2019

Airtel Kenya

An Airtel shop in Nairobi. Airtel Kenya lost $6.7 million through its mobile money transfer platform in 2018. PHOTO | FILE | NATION MEDIA GROUP 

ALLAN OLINGO
By ALLAN OLINGO
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In one of the biggest inside job corporate thefts in recent history, Airtel Kenya lost $6.7 million through its mobile money transfer platform last year.

This has been revealed in a prospectus of the telecom's parent firm Airtel Africa, which shows that only Ksh86 million ($860,000) of the amount lost was recovered through insurance.

“In 2018, incidents of cash control frauds were identified in the Airtel Money operations in Kenya, which involved circumvention of the its controls by Airtel Money employees and resulted in loss of $6.7 million,” Airtel Africa says.

The firm says that while it has introduced stringent controls to check on fraud, risks posed by employees cannot be completely eliminated.

Some of the measures in place, the telecom says, include daily reconciliations, separation of duties, and technical restrictions on funds transfer to non-Airtel bank accounts.

It adds that administrative or technical errors could result in losses for customers for which it may be liable for fraud and problems related to inadequately securing its payment systems.

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The revelation comes barely a fortnight after two Safaricom staff in Kenya were charged in court with attempted fraud of more than Ksh300 million ($3 million).

Mr Simon Billy Kinuthia and Mr Brian Njoroge Wamatu, however, denied illegally copying and transferring privileged information on a subscriber from the company’s database and sharing it with an unauthorised person.

Appearing before Chief Magistrate Francis Andayi, the duo denied the charges of computer fraud and demanding money by threats.

It is alleged that with others not before court and with intent to defraud, the suspects unlawfully copied and transferred subscriber's data information from Safaricom’s company database to one Mr Charles Njuguna Kimani. They allegedly committed the offence between May 1 and June 7, 2019.

It is also alleged that the suspects demanded Ksh300 million ($3 million) from Safaricom with intent to steal. They denied the charges and were ordered to deposit Ksh1 million ($10,000) cash bail each to secure their release.

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