Fin24

Union welcomes sinking of Telkom deal

2012-06-18 16:05

Pretoria - The Communication Workers' Union (CWU) has saluted the Cabinet's decision against a possible transaction between Telkom and South Korean company KT Corporation.

The "financial mess" at the parastatal would not be resolved by a cash injection from the Asians, CWU spokesman Matankana Mothapo said on Monday.

"South Africans have more than enough talent to manage their assets. In addition, we do not have to mortgage our country in return for management expertise," he said.

"The scale of the financial mess that management has plunged Telkom in will not be resolved by getting money injected by Koreans," he said.

The government decided not to back Telkom's proposed partnership with the South Korean firm in May.

The deal would have given KT Corp a strategic equity shareholding of 20% in the post-issue ordinary share capital of Telkom.

The union called on Communications Minister Dina Pule to "review" the management of Telkom.

Meanwhile, Telkom said it accepted Cabinet's decision.

"Telkom will work with government to look at alternative solutions for the company," Telkom Group spokesman Pynee Chetty said in a statement.

"Telkom has communicated as such to all its shareholders."

Mothapo said Telkom management had "agitated" for the Koreans to buy a stake in the struggling parastatal, hoping the deal would turn around Telkom's fortunes.

"They were of the view that the Koreans will turn Telkom around by coming in with management expertise and would bring money to facilitate Telkom's investment programmes."

When the deal was announced in October, the CWU and Congress of SA Trade Unions said it could lead to job losses and worse service for the poor.

Telkom listed on the Johannesburg Stock Exchange in 2003.

The government is Telkom's majority shareholder with 39.8% of the shares, while the Public Investment Corporation holds a 10.9% stake, according to Telkom's website.

Comments
  • johan.verheem.9 - 2012-06-18 19:10

    Viva ANC-minus !!!!! Another cash cow milked to death.

      ryan.a.smith.3958 - 2012-06-18 19:44

      no. more like an example of government direct involvement in industry. share price (excluding vodacom disposal) from R 75 to R 20 in about two years.

      ryan.a.smith.3958 - 2012-06-18 19:47

      oh, and quite funnily, as soon as the government refused to sell the stake to KT at R 24 per share the share plummeted to R 20. leaving the government with mud on its face. the way to fix Telkom is to get rid of its biggest and dopiest shareholder .. the ANC government

  • pages:
  • 1