Telkom chairman quits early

By Nicola Mawson for Telkom
Johannesburg, 27 Oct 2006

Telkom yesterday told shareholders that its chairman has resigned from the board, with effect from the end of this month.

The fixed-line operator`s 2006 annual report states Nomazizi Mtshotshisa`s term of office is due to expire in 2008. She was appointed on 1 August 2002.

Shirley Lue Arnold will replace Mtshotshisa, who has resigned as both chairman and non-executive director.

Her resignation came as a surprise to market commentators. An analyst - who spoke on condition of anonymity - suggested she could move into a black economic empowerment role.

Market speculators comment that Mtshotshisa may seek to join forces with an empowerment group seeking a stake in Vodacom. Telkom`s announcement comes a few days after Vodacom said it had shareholder approval to expand further into Africa.

BMI-TechKnowledge telecoms analyst Richard Hurst says the sudden move could cause concern among international investors. Locally, Telkom saw 1.2 million shares change hands yesterday, with the share closing at R137.21, up on the previous day`s close of R135.70. Its 12-month high is R165.82 and its 12-month low is R117.38.

Hurst believes the full impact of the decision is yet to be seen. He adds it will be interesting to see how the change unfolds, especially as Arnold is not reported to have any experience in the industry.

Background

Arnold has served as a non-executive director and chairman of the Empowerment Committee of Peermont Global since July 2004 and a non-executive director of NAI Finlay since 2003. She is a member of the Chairpersons Forum, Gordon Institute of Business, the Independent Directors Initiative and the Institute of Directors in Southern Africa.

Arnold is a trustee of the Thutuka Bursary Fund and the Math`s Centre, and is also a patron of the Student Sponsorship Programme.

She was non-executive director of Ernst & Young Southern Africa from 2002 to 2004 and acting chairman from 2004 to 2006. She was also a member of the accounting firm`s Nominations Committee from November 2004 to April 2006.

Mtshotshisa previously served as a director on the boards of the Industrial Development Corporation and Mossgass & Soekor.

She replaced Eric Molobi, who resigned as chairman of the Telkom board, effective 31 July 2002, to focus on Kagiso Trust Investment`s group of companies.

Mtshotshisa was unavailable for comment.