Kenya's largest telco Safaricom is suing 13 of its former agents who have allegedly conned the company out of goods to the value of $1 million.

The telco accuses the agents of executing a plan to defraud the company and is taking them to court, though the dealers deny the charges.

The company says that between October 2010 and May 2011 the dealers presented bank deposit slips to the telco to receive goods, yet these subsequently turned out to be fraudulent, as no payments had been made into the specified account.

A forensic audit conducted by consultants Deloitte showed that the deposit slips could not be traced to the company’s account and resulted in Safaricom sacking the dealers.

“Safaricom reasonably believed that funds had been deposited in its accounts and subsequently credited the dealers’ accounts to access the products,” the firm said in a statement released through its lawyers.

“On realising that there was a problem with the payments, Safaricom says it conducted a review of its accounts for purposes of reconciling the dealers’ bank statements and receipts arising from the deposit slips presented between October 1, 2010 and May 10 last year.”

The 13 dealer companies are Alfa Gates Communications, Amal Communications, Angel Beauty Spot Limited, Cimu Mobitel, Gaturi Mobile Experts, Inter Middle, Kaso Communications, Olkitira Enterprise, Plust International, Pioneer Enterprises, Silver and Gold Investment, Taqwa Communications and Well Communications.

They all deny the charges and many have made counter claims that it was up to Safaricom - the most profitable company in Kenya – to properly verify the payments before clearing the goods for release.

It is not the first time that allegations of fraud have been levelled against the telco’s agents.

In March of last year Safaricom totally severed links with three of its dealers who were accused of fraud, and told other dealers that they would have to wait longer for any commissions, owing to resulting revisions to its payment method.

At the time, the company had discovered a scheme where dealers were pre-activating lines and loading airtime, claiming commission for a sale to a new subscriber that in fact had not taken place.

“We will not work with thieves,” said Safaricom chief executive Bob Collymore.

“I'd rather have fewer dealers than work with people who are stealing from us.”