JSE unhinges govt's Telkom share plan
The Johannesburg Stock Exchange (JSE) stands firm on its decision that government's Class A shareholding status will expire on 5 March, as agreed when Telkom listed on the JSE in 2003.
“As I have said previously, the JSE remains firm on our position regarding Telkom's special rights. As a listed company, Telkom must comply with all the requirements set in the listings requirements and the special rights will fall away. At this point, the JSE cannot comment further on the discussion,” says JSE CEO Russell Loubser.
This is despite communications minister Roy Padayachie's statements last week that, although government had accepted that its golden share would expire on Saturday, discussions were under way with the JSE and the Telkom board to entrench certain of the special rights it currently enjoys.
Government currently holds a Class A shareholding status for its 39.8% shareholding in Telkom. Its Class A shareholding status gives it special privileges over other shareholders, plus the right to appoint five out of 12 directors to the board, including the chairman.
Padayachie would not divulge which of the special rights government is seeking to entrench.
Tiyani Rikhotso, spokesperson for the minister of communications, this morning would not comment on Loubser's statements. However, he noted that - in light of the expiration of its Class A shareholding - the DOC is engaging with all the relevant stakeholders regarding its future role in Telkom.
In view of the JSE's firm standpoint, government may move to install a permanent CEO in Telkom before Saturday as it will lose the right to veto candidates presented by the Telkom board thereafter.
However, Padayachie expressed confidence last week that post-expiration of its Class A shareholding, government would negotiate to entrench certain special rights in Telkom later this year.
“It is our understanding that, as of 4 March, the existing entrenched rights will fall away and the articles of association remain on board, less the rights of the golden share,” Padayachie explained.
Therefore, according to Padayachie, there is no crisis in terms of the legal statutes to have concluded its discussions with the JSE and the Telkom board before the expiration date.
Instead, Padayachie explained the Telkom board is likely to first assess the impact of the New Companies Act due to come into effect on 1 April, before defining new articles of association.