Telkom chairman cleared of wrongdoing

Fixed-line operator Telkom has finally released the findings of an investigation led by audit and risk firm KPMG into allegations made by former Telkom CEO Reuben September against board chairman Jeff Molobela.

News of the report first surfaced in July, shortly after September announced his resignation. The telco only now revealed the findings of the investigation as it responded to a number of allegations levied against it in various whistle-blowing documents that have surfaced in recent weeks.

The investigation initially stemmed from complaints authored in a formal letter to the board by then CEO Reuben September. The complaints alleged that Molobela had been interfering with the operational management of the company.

At the time, it was believed that this interference was one of the key drivers to the talent exodus at Telkom.

According to Telkom, the KPMG report found that there was no evidence to substantiate the five allegations made against the chairman. It is not clear what the exact nature of the allegations were.

Instead, the company says, following the findings of the report, the Telkom board had resolved to act against the individuals involved. Again the company has not identified who those individuals are.

Earlier this year, Molobela lashed back at media reports suggesting that it was his interference, and by extension, the government interference, that was responsible for the talent exodus at Telkom.

strategy.

“The board could not stand aside when some of the pillars of our core strategy were falling apart,” he noted. The process followed and the decision not to renew September's contract was meticulous and based on a majority decision by the board, added Molobela.

This year, the fixed-line operator lost its CEO, September, its CFO, Peter Nelson, as well approximately 134 managers who opted for the company's voluntary retrenchment offer.

Among those who opted for the package are chief of strategy Naas Fourie, MD of Telkom International Thami Msimango, head of procurement Stafford Augustine, and group executive for network provisioning Marius Mostert.

Now a controversial whistle-blowing document has levied strong allegations of bad corporate governance against September, during his three-year tenure at the fixed-line operator.

The report zeroes in on September's role in Telkom's failed Nigerian operation, Multi-Links, accusing Telkom executives involved in the operation of reckless management of the company's resources and abuse of power.

It is important to note that the whistle-blowing report is not supported by any authoritative body, but drawn up by the Communications Workers Union (CWU). The union acknowledges that it's a CWU report, but it says it is not yet willing to stand by the allegations contained in it.

However, Telkom responded yesterday, saying it acknowledged the allegations levied against it by a controversial whistle-blowing report. However, the company argues that not only has it been aware of the allegations, but is already at various stages of investigations into the matter.

The Telkom board and, in particular, the ARC, have already taken decisive action on the findings of several investigations into matters at Telkom and Multi-Links over the past year.

Forensic auditors at Ernst & Young were tasked by the Telkom board to perform an investigation into many aspects of Multi-Links, and this culminated in criminal and disciplinary processes being launched.

The findings of the Ernst & Young investigations have been handed to the South African Police Services (SAPS) and the National Prosecuting Authority (NPA) for consideration. The SAPS and NPA have subsequently instituted criminal investigations into certain activities at Multi-Links.

Telkom has not identified which of its employees or former employees are implicated in the criminal investigation; however, the report makes continuous reference of mismanagement by September, who was both the CEO of Telkom, as well as the Multi-Links board chairman at the time.