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Privatise Telkom, urges DA

Nov 05 2012 15:42 Sapa
New Telkom chief executive Pinky Moholi. She is th

Pinky Moholi.

Company Data

TELKOM SA SOC LIMITED [JSE:TKG]

Last traded 37.40
Change -0.85
% Change -0.02
Cumulative volume 1615906
Market cap 19.48bn

Last Updated: 24/04/2014 at 04:07. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - Telkom[JSE:TKG] must be fully privatised to prevent the parastatal being plunged into a crisis, the Democratic Alliance said on Monday.

"Should government persist in its naive and dangerous management of Telkom we may well soon see the company come cap-in-hand to Parliament asking for a financial lifeline," DA spokesperson Marian Shinn said in a statement.

"Government has a dismal record in managing state-owned companies and Telkom must not be allowed to become another state-controlled failure."

The DA's comments follow the announcement that Telkom chief executive Nombulelo "Pinky" Moholi has resigned.

"The news... is tragic and further proof that seasoned professionals find Communications Minister Dina Pule's amateurish and reckless meddling in the affairs of a listed company intolerable," Shinn said.

"This [meddling] has jeopardised the legality of operations of the listed company."

Telkom's board director Neo Phakama Dongwana also resigned.

Telkom said once the "current vacancies" on the board were filled, it would start looking for a new chief executive.

Trade union Solidarity said Telkom needed to find a "worthy successor" to Moholi.

"Moholi is one of several Telkom CEOs who have resigned over the past year and her resignation will contribute to further instability in the company," spokesperson Marius Croucamp said in a statement.

The company had been plagued by recent problems, such as a R449m Competition Tribunal fine for "bullying" potential competitors, a failed bid by Korea Telecoms to buy a 20% stake in the parastatal, and weak financial prospects.

The Information Communication Technology Union said it accepted Moholi's resignation "without reservation".

"Her stewardship at the helm of Telkom can best be described as a disappointing spell," the union's general secretary Tshepo Mmulutsi said in a statement.

"The sad truth is she had over-stayed the position even if she has been there for a year as CEO."

The Congress of the People (Cope) said Moholi's resignation was a sign that government was not willing to release its "political stranglehold" on Telkom.

"This creates the distinct impression that it is part of the ANC's political strategy to nationalise Telkom," Cope MP Juli Kilian said.

"Telkom's infrastructure and national footprint is a national asset which should be managed by professional experts for the benefit of all South Africans..."

Website BDlive reported that at Telkom's annual general meeting (AGM) in October, Pule managed to vote off four board members.

The AGM was last chaired by Lazarus Zim who announced his resignation as Telkom chairperson in September. Moholi previously rejected speculation that she intended resigning after Zim left.

Moholi was appointed chief executive in April last year after acting head Jeffrey Hedberg decided earlier in 2011 not to renew his contract.

She became the first black woman to head up a Johannesburg Stock Exchange listed telecommunications company in South Africa.

She was previously Telkom's chief sales and marketing officer from 2002 to 2005, before moving on to Nedbank for three years. In 2009 she returned to Telkom as a managing director.

telkom  |  privatisation
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