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Chaos at Telkom

Dec 10 2010 10:15
Simon Dingle

Company Data


Last traded 63
Change 1
% Change 2
Cumulative volume 961920
Market cap 0

Last Updated: 01-12-2015 at 04:00. Prices are delayed by 15 minutes. Source: McGregor BFA


Last traded 208
Change -3
% Change -1
Cumulative volume 817258
Market cap 0

Last Updated: 01-12-2015 at 03:59. Prices are delayed by 15 minutes. Source: McGregor BFA

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Why Telkom failed in Nigeria

Johannesburg - A lengthy dossier prepared by the Communications Workers Union (CWU) has plunged Telkom [JSE:TKG] into a state of crisis.

The dossier accuses senior Telkom executives of corruption and nepotism. The documents in the dossier consist of internal emails, accounts of whistleblowers and other documents.

Acting group CEO Jeffrey Hedberg and head of Telkom South Africa Nombulelo Moholi are two of the executives under attack in the dossier.

It accuses Hedberg of running Multi-Links, Telkom's Nigerian subsidiary, into the ground and hiring former Cell C executives at high cost. Hedberg was CEO of Cell C before joining Telkom.

Allegations relating to Moholi target her husband's relation to Hezeki Contracting, which does work for Telkom.

Moholi retaliated on Friday morning with a personal statement defending her position. In it, Moholi says that Hezeki Contracting was appointed by Telkom before she returned to the company.

"It is alleged that I may not have declared my spouse's interest in the company, Hezeki, which was awarded a contract by the board in November 2008," she said.

"It is important to note that I was not in the employ of Telkom from December 1 2005 to April 30 2009, the period in question."

"Nevertheless, on joining the company all employees are requested to fill in and continuously update a conflict of interest form. This was duly done and can be confirmed by the online Telkom compliance form.

"Mr Moholi had indeed purchased (and was not given) shares in Hezeki in 2007, and was forced to sell back those shares to the company in April 2009, in light of his spouse's impending employment at Telkom SA," she said.

Moholi is also accused of being involved in the hiring of a former colleague from Nedbank Group [JSE:NED], Manelisa Mavuso, without due process.

Moholi responded by saying: "The invitation to apply for the SME: consumer position was placed internally in Telkom and simultaneously briefed to a recruitment agency, Spencer Stuart, which sourced Mr Mavuso, a retail marketing veteran from Standard Bank Retail.

"The shortlist included internal and external candidates. The interviews followed a structured process and were supervised by the group's human resources division. Mr Mavuso was recommended by a panel of three Exco members for appointment. Mr Mavuso is not related to me, nor is he a personal friend, and allegations of wrongdoing or nepotism are devoid of any truth."

Moholi suggested that Thabang Mothelo, a Telkom employee and member of the CWU, is behind the accusation relating to Mavuso.

"This ... is simply a pre-emptive allegation by Mr Thabang Mothelo to avoid the ongoing disciplinary action against him on charges of racism, by throwing aspersions on the chairperson of the procedure, Mr Mavuso," she said.

Moholi called all allegations relating to her "unfounded" and "unsubstantiated".

The board of Telkom issued a statement on Thursday in which it also rubbished the dossier's accuracy.

"The board believes that the release of the memoranda is designed to distract them from its ongoing investigations. Some of the allegations in the documents which have been brought into the public domain have tarnished the reputation of Telkom," it said.
"A number of the matters contained in the memoranda are already known to Telkom and are in various stages of investigation. Following a meeting of the audit and risk committee of Telkom's board of Directors, Telkom has decided to state its position on these matters publicly.

"The Telkom board and in particular the audit and risk committee has already taken decisive action on the findings of several investigations into matters at Telkom and its Nigerian subsidiary, Multi-Links, over the last year."

It added that investigations are under way and that independent auditors have been appointed in this regard.

It seems clear that individual vendettas against Telkom are behind the release of the dossier.

However, some allegations, especially those relating to RSSS security that Telkom has appointed to combat cable theft, are highly suspect.

The truth, as usual, probably lies somewhere between the dossier's extreme claims and the suggestions by Telkom that it is under fire from employees who face disciplinary action.


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