Telkom covers its back

By Paul Vecchiatto for Telkom

Cape Town, 16 Feb 2009

Telkom's board reaffirmed the mandate of the company's CEO, Reuben September, and its executive committee in a Stock Exchange News Service statement, issued late last week.

Last week Tuesday, the Telkom board met, ostensibly to discuss the sale and unbundling of shares in Vodacom and its subsidiaries.

The statement does not refer to that, but says it is in response to media reports. It says shareholders are notified that the board of directors is fully committed to good governance of the company.

“Any allegation against the company, or any employee or officer of the company is subject to the application of the company's policies and procedures governing such matters, with full commitment to the principles of accountability and good governance at all times,” the statement says.

Richard Hurst, an analyst at international research firm IDC, says it appears Telkom is covering itself against any eventuality.

“They are trying to cover themselves as far as corporate governance is concerned and that may emerge from any conduct of any of its officers,” he says.

Telkom's chief operating officer Motlatsi Nzeku was summarily dismissed almost two weeks ago. This was amid charges that he was divisive and opposed Telkom's restructuring plans, and that he had allegedly defamed the company.

Nzeku has indicated he will oppose his dismissal, either through the courts or Telkom's own internal procedures.

Speculation is rife that Nzeku has a dossier of alleged irregularities surrounding breaches of Tellkom's procurement policies and this, if revealed, could prove damaging to the company.

“There is a sense that we are in the calm before the storm,” says a senior Telkom staff member. “There is a great sense of uncertainty within the company and that it would affect our operations.”

In a separate statement, the Communications Workers Union has asked for direct Telkom board representation, as it is concerned about the effect of the restructuring process on job losses and it is opposed to outsourcing of jobs. It has also said it is concerned about the “looting” of Telkom.