Cape Town - The spotlight is once again on the relationship between Telkom [JSE:TKG]
and government after acting chief executive Jeffrey Hedberg
indicated that he would be leaving the company after less than a year.
This leaves the company, in which government has a significant stake, without a chief executive and without a financial director following Peter Nelson’s resignation in July last year.
Telkom spokesperson Pynee Chetty confirmed that Hedberg had decided not to renew his contract, which lapses at the end of March. No reason was given for his decision.
The decision has clearly upset investors – on Friday Telkom’s share price fell 1.73% to R36.36, after having been more than 3% down at one stage.
Hedberg is the company’s fourth chief executive in eight years.
Irnest Kaplan, who heads Kaplan Equity Analysts, has cautioned that investors should not forget that Hedberg has only been acting chief executive.
The announcement at least provides clarity, he said, but in a sense aggravated the uncertainty and stressed the fact that Telkom had huge challenges in terms of its management.
According to Kaplan it also pointed to the challenges faced by companies owned by both government and private investors – parties who did not always have the same agenda.
This was also very difficult time for investors, said Kaplan. Who would invest in a company without an executive or financial head, he asked.
According to unnamed sources who spoke to the industry website TechCentral, Hedberg felt that he had not received the necessary support from government to straighten out Telkom's operations – which would have involved, inter alia, retrenchment of employees.
The state, including the Public Investment Corporation’s stake, owns just under 40% of Telkom.
Government has special rights thanks to its shareholding – like the right to appoint five directors to Telkom’s board, including its chairperson.
But these rights expire in March. JSE chief executive Russell Loubser
has indicated that the exchange will disallow any extending of these rights.
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