Legal View

Parliament wants Telkom to report to it

Cape Town, 21 Oct 2009
Read time 2min 30sec

Parliament wants Telkom to resume reporting to it and justifying its plans, says Ismail Vadi, chairman of the Parliamentary Portfolio Committee on Communications.

Speaking yesterday to a Department of Communications (DOC) delegation, which included director-general Mamodupi Mohlala, Vadi asked: “Why, if Telkom is not listed on the New York Stock Exchange and government owns 39% of it, does it not report to this committee?”

He also asked the DOC if Telkom was still listed on the Johannesburg Stock Exchange and if this meant it was a totally privately-owned company.

“I want to know who owns it, and why it does not report to us,” he said.

The DOC delegation replied that Telkom had delisted from the New York Stock Exchange in August, but that it was still listed on the JSE. They said government owned the largest block of Telkom shares and had the right to appoint five out of the 12 board members.

They also pointed out that Telkom had applied for permission, in terms of the Public Finance Management Act, for exemption from reporting to Parliament and this was granted by former finance minister Trevor Manuel.

“We think this exemption was for three years,” DOC officials told Vadi.

The last time Telkom presented to Parliament on its annual financial results was in November 2003, when former CEO Sizwe Nxasana headed the company. Since then it has only presented on specific issues, such as last week's public hearings on mobile termination rates.

Vadi later told ITWeb that Telkom was using public monies for its own business purposes and should report to Parliament.

“There is some confusion about whom Telkom should report to. I was told that they fall under public enterprises, but they do not. They have made a lot of money without answering to anyone and if the interconnection rate falls, then they stand to make a lot more,” he said.

Telkom SA MD Pinky Moholi last week told Parliament that Telkom paid out R5.4 billion in interconnection rates to the cellular network operators in the past year, while receiving only about R985 000 in return. If the interconnection rate halves, then Telkom will halve that payout.

“We want to know why Telkom has been unable to increase fixed-line penetration and why its charges are so high,” Vadi also said.

During yesterday's hearing, Vadi gave the DOC a list of homework to do and then to report back to Parliament at a later stage. This included a report on the future of the Presidential National Commission on Information Society and Development, and whether it should be located elsewhere in government; the resolution of the ICASA councillor performance management system; that DOC officials complete their declaration of conflicts of interests and interests in outside companies; as well as timelines on policy formulation.

Login with