Telkom recently ratified a R6 million loan to its suspended CFO Jacques Schindeh"utte, after initially failing to follow proper procedure in granting it.
CEO Sipho Maseko says, although shareholders had given the go-ahead for financial assistance so that executives can buy stock in the company, the R6 million loan should have been approved by the board.
However, the loan had not received this approval when it was issued, he says.
Schindeh"utte used that loan to buy 243 700 shares, just eight days before the company issued a trading statement indicating earnings would be at least 20% higher when it reported interim results.
Those results, published this morning, say the R5.998 million loan may not have been in compliance with the provisions of the Companies Act.
The interest-free loan was provided to aid Schindehutte to buy Telkom stock, which is held as security. Once the suspended CFO's contract is terminated - due to retirement, resignation, dismissal, abscondment or medical disability - it attracts interest at prime plus 2%, Telkom explains.
Telkom has noted Schindeh"utte's suspension relates to allegations of personal misconduct, which came to its attention via a whistleblower. A disciplinary process is under way, and Schindeh"utte is working with that process, says Maseko.
Maseko says he will not prejudice the matter by commenting on it, but will rather trust the process. Deon Fredericks has been acting as CFO from 24 October, which is when Schindeh"utte was suspended.
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