Jacques Schindeh"utte - suspended as CFO of Telkom three months ago over personal misconduct charges, yet to be disclosed - will have to pay back the R6 million he borrowed from the company to buy stock last year.
Telkom said in a statement yesterday that the interest-free loan was granted "in a manner that was inconsistent with the provisions of the Companies Act" - essentially negating the transaction.
Telkom says the board "cannot and did not" approve the loan, but that Schindeh"utte personally oversaw the advancement of the payment of the loan amount to himself. "By virtue of his position as CFO of Telkom, Mr Schindeh"utte has oversight responsibility for compliance and corporate governance, including for the regulatory and/or administrative processes relating to the provision of loans to directors at Telkom."
The suspended director now has a "fiduciary duty" to repay the amount to Telkom, says the company.
Schindeh"utte interview
The statement comes in response to an article by international news agency Bloomberg, which Telkom says was published before the company had an opportunity to respond.
Bloomberg cites Schindeh"utte as saying the loan had nothing to do with his October suspension, "as I followed the correct procedure to seek approval for the loan".
The publication reports Schindeh"utte told a journalist in an interview yesterday that he would repay the loan immediately.
Shock suspension
The industry was taken aback last year when Telkom's top dog Schindeh"utte - who has served as CFO of the company since August 2011 - was suspended on the back of unidentified allegations.
At the time, Telkom would not be drawn on what charges Schindeh"utte faced, saying only the board was advised to suspend him, pending a disciplinary process.
"The board was recently made aware of certain allegations and appointed an independent law firm to investigate them. The results of the investigation were presented to the board, and the board took professional advice about the correct way to deal with the report."
Telkom appointed deputy CFO Deon Fredericks to act as CFO in the meantime.
Just short of a month after Schindeh"utte's suspension, CEO Sipho Maseko said 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.
This came to light at the company's interim results, which revealed then already that the loan may not have been in line with the Companies Act.
Previous purchases
The latest shares purchase by Schindeh"utte was concluded at the end of September last year.
He bought 243 700 in stock, at a price of R24.45 a share - a purchase that took place eight days before Telkom announced that both basic and headline earnings per share would be at least 20% higher in the first half of the year.
Two months prior, in July, Schindeh"utte had bought 55 000 shares - at an average price of R18.07 a share - an investment of R994 430 in the stock.
Schindeh"utte's July purchase followed an earlier one by Maseko, who acquired 52 520 Telkom shares (worth R1 million); and chairman Jabu Mabuza's investment of almost R500 000 in company stock.
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