While high-profile CEOs are expected to attract regular media attention, Telkom CEO Sipho Maseko seems to be doing it for all the wrong reasons.
In the latest round of bad publicity for the man who has been leading Telkom since April last year, Bloomberg alleges the operator awarded a R91.1 million advisory contract to Bain & Co last year, "without following an open bidding process".
The publication further states Maseko personally "hired Bain to advise on Telkom's broadband and mobile strategy", as the company aimed to stem revenue losses resulting from a contracting landline market. The article alleges Telkom thus did not comply with the Public Finance Management Act, which dictates how companies, in which government is a shareholder, should procure goods and services.
Telkom declined to comment on these latest allegations, but industry observers are concerned about the amount of negative press Maseko is getting.
Last week, Maseko found himself embroiled in a number plate cloning controversy, in which it was alleged he has racked up thousands in traffic fines while driving with another individual's number plates. Maseko has reportedly presented himself to the authorities and the matter is being investigated.
Earlier in the week, Maseko came under fire from labour unions for public statements in relation to looming retrenchments at the company, saying the company would consider race a criteria for cutting jobs. Labour unions accused Maseko of making the statements in bad faith, as the parties are currently involved in a facilitation process, as part of Telkom's restructuring.
Need stable leadership
Ovum analyst Richard Hurst has expressed concern about Maseko's frequent media appearances, at a time when the company needs stable and focused leadership. "We thought he was a good guy, and we expected something different. A CEO is supposed to lead by example and Telkom does not need this right now. At a time when Telkom is trying to transform itself, this just tends to distract from what it should be doing.
"Telkom has a vital role to play in the local market, and we want to see a strong and stable Telkom competing alongside the other operators."
BMI-TechKnowledge director Denis Smit calls Maseko's frequent, but controversial, media appearances "unfortunate". "Telkom is currently engaged in sensitive labour issues and any governance problems would not be useful.
"He is a highly-placed CEO and should be in the press, but not for these reasons."
Smit admits Maseko is doing an "excellent" job in leading Telkom, but says no board of directors likes this type of publicity.
Accentuate the positive
In February, Maseko was ordered to attend a corporate governance and directors' duties course, after granting suspended CFO Jacques Schindeh"utte an interest-free loan. The Companies and Intellectual Property Commission issued the directive, earning Maseko the distinction of becoming the first CEO in SA to ever receive such a sanction.
In March, Telkom confirmed Maseko completed the course, avoiding criminal prosecution and a potential fine of up to R1 million.
Independent telecoms analyst Spiwe Chireka says Maseko should rather be judged by what he achieves at Telkom, adding that some improvement can already be seen under his leadership.
"You must remember, he inherited a company that was a complete mess. In the past, Telkom was also battered severely by the media. But things have improved [for the company]."
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