CALLING THE SHOTS
Hidden in the deluge of shocking leaked Gupta e-mails and economic data that hit the market this week was a gem of a statistic from a former telecommunications pariah. The performance of Telkom — a company almost run into the ground by senseless interference and apparent corruption while under the stewardship of former communications minister Dina Pule — was the sole piece of good news to come out of Pretoria this week.
On the first Monday of July, Telkom will deposit a cheque of R481.69m into national treasury’s account. It is quite unusual for government to receive dividends from the many “investments” it holds on behalf of taxpayers. In fact, for the past decade it is government that has been throwing money into the deep, dark holes that state-owned companies have become.
Yet the Telkom dividend is the second tranche that treasury will bank in the financial year ended March. Last year, for the first time in recent memory, Telkom paid an interim dividend of 131.23c/share. That translated to R271.78m on government’s direct 39.3% stake in the company. That’s a total net dividend of
R753.47m going into the nation’s coffers in one year. The dividend was 56% higher this year, due to the company’s great performance over the past four years. It also paid income tax of R691m in the period.
A further 12% of the Telkom stock is under the control of the Public Investment Corp, on behalf of state employees’ pension funds.
If this kind of statistic does not teach our esteemed leaders who is more competent and better suited to control “the means of production” and the “commanding heights of the economy”, then nothing will.
Under the professional management of businessmen — chairman Jabu Mabuza and CEO Sipho Maseko — Telkom has undergone “radical economic transfor- mation” from the cash drain it was while subject to the nonsensical whims of Pule.
It took the near-total destruction of the company in 2012 and Pule’s dismissal in 2013 for Telkom to have a fighting chance at survival.
Ringing the changes
Telkom employed about 25,000 people who stood to lose their jobs while Pule’s friends and relatives seemingly sucked the last few drops of what was left of their livelihoods. And, minus leadership of any significant stature, it was vulnerable, with all the political consequences that would arise from the demise of Africa’s largest fixed-line phone company.
Corporate vultures, mainly foreign investors, were already circling, offering to buy the company at a significant discount. Had the bid by Korea’s KT Corp to buy one-fifth of the company succeeded, Telkom employees would have been assured of a rude awakening, with the new investors attempting to wring value out of the bloated structure.
Enter Mabuza and Maseko.
Chairman Mabuza publicly warned government that he would only accept the responsibility of nursing the company back to health if government stayed away. It resembled a message to then president PW Botha from John Maree, Eskom’s first nonexecutive chairman, when he was invited to rescue the struggling utility: “If you ever come to my office or home without my invitation, please accept that as my resignation.”
That worked; it kept Botha at bay. And so it has for Mabuza and Maseko. For the benefit of all.
Now, if you compare that to the costly bungling by politicians at Petrosa, the SABC, the Central Energy Fund, Denel and Eskom, you quickly realise that the state is not competent to run anything resembling a business.
Under the professional management of businessmen, Telkom has undergone ‘radical economic transformation’