Telkom board lobbies for removal of member

IN A rare show of force, Telkom’s board yesterday asked shareholders not to reelect Jeff Molobela, a government representative since 2009. The government, with a 39% stake in the company, is Telkom’s largest shareholder.

The board’s official statement was diplomatic. Mr Molobela, it said, needed to go to make space for “fresh skills appropriate to the growth trajectory that the company will be pursuing”.

It said it was important that the board demonstrated “a collective commitment” to achieving success in respect of the turnaround objectives and the “need for a collegial environment which allows for robust debate” and deliberation. It added that the board insisted on “adherence to good governance practices and where board members show a clear focus on acting in the best interests of the company”.

Mr Molobela’s time at Telkom has been controversial. In 2010 he was accused of being behind the shock departure of former CEO Reuben September and former chief financial officer Peter Nelson.

Mr Molobela was accused of interfering in the daily running of the business and creating a paralysed “suboptimal” board. He was cleared of all wrongdoing by a KPMG probe.

Sources close to Telkom said yesterday that while calling for a fellow board member to be axed was highly unusual, the board had acted correctly in calling for him not to be re-elected.

Mr Molobela responded to the board’s call yesterday by writing a letter

to shareholders in which he announced he was making himself unavailable for re-election, thereby possibly saving himself the embarrassment of losing the battle to retain his position.

Mr Molobela said the lengths to which the board had gone to get rid of him “violates due process”. He added that he was not presented with “cogent verifiable reasons” for the decision not to support his re-election.

He speculated that the only reason for this unusual step could have been “my strong objection to a couple of decisions that were not in the interest of Telkom, nor the shareholders”.

Telkom said the proposal to have Mr Molobela’s ousted was considered with his full knowledge and he was present at all meetings where the matter was discussed. He had been given an opportunity to respond.

Length to which the board has gone to get rid of me violates due process

Mr Molobela said he was informed by Telkom chairman Jabu Mabuza that the move had the support of the government. This “makes my position untenable”, he said. “In taking the unusual step of stating that they do not support my re-election, they have created an element of innuendo and this demonstrates that they have not been comprehensive in considering the implications of their decision.”

The Department of Communications, which represents the government’s shareholding, did not respond to questions. Telkom referred queries to the written statement.