Johannesburg - In the wake of the failure by telecoms firm
Telkom [JSE:TKG] to sell a 20% stake to Korean group KT, the powerful
Communication Workers Union (CWU) is baying for the heads of Telkom chief
executive Nombulelo “Pinky” Moholi and her senior executives.
The union, which vehemently opposed the R3.3bn transaction,
wanted Communications Minister Dina Pule to sack Moholi and her team for
failing to turn around the fixed-line and mobile phone operator, which saw its
yearly headline earnings drop 33% to R1.65bn and after-tax profit plummet 93%
The deal was blocked by government, the majority
shareholder, which balked at the price the Koreans were prepared to pay.
CWU spokesperson Matankana Mothapo said: “The current
management is dismally failing to turn around Telkom and instead focuses on
retrenching workers to create artificial profitability. This strategy has
gutted Telkom to the bone.
“The union calls for the minister and Cabinet to review
Telkom’s management with a view to getting a new, competent team that puts the
perspective of building a democratic, anti-imperialist, developmental state at
The union is in favour of the state taking full ownership of
Telkom, which it owned before it partially listed on the JSE in 2003 and sold a
further 7.2% to BEE grouping Elephant Consortium in 2005.
Government currently holds nearly 40% of Telkom.
Mothapo said: “The crisis in Telkom is a perfect opportunity
for government to take back this asset and use it to drive a developmental
agenda such as rolling out broadband to schools, households, and government
The company is in serious need of a massive capital
injection after it burnt a lot of cash following a failed investment in Nigeria
and rolled out its cellphone subsidiary 8ta, which is struggling to compete
against entrenched rivals Vodacom Group [JSE:VOD], MTN Group [JSE:MTN] and Cell
To add salt to the wound, Telkom is facing a R4.5bn fine
from the Competition Commission for anti-competitive behaviour.
The potential fine was in relation to a contravention that
happened between 1999 and 2004.
Telkom also lost more than R10bn in four years because of
the failed acquisition of Nigerian telecoms firm Multi-Links, which was
eventually sold off for $10m (about R83m).
The Nigerian safari and the anti-competitive behaviour
happened years before Moholi took over the reins at Telkom two years ago.
Sikhumbuzo Kholwane, chairperson of the Parliamentary
portfolio committee on communications, said he could not understand why the
union blamed the current Telkom management for the Multi-Links deal and Competition
Commission’s potential fine.
He said government should clarify the role of Telkom and
give the organisation a clear vision because it was unclear whether the company
should play a developmental role.
“I am not saying Telkom management has not done anything
wrong. I need to talk to the union to find out what their point of departure
is,” said Kholwane.
Pule's spokesperson Siyabulela Qoza said the government
would continue working with Telkom’s board in a quest to turn around the