Angry Telkom boss hits at commission sanction
Suspended finance chief ‘not entirely blameless’ in loan saga
TELKOM CEO Sipho Maseko is furious about the savaging he got from the Companies and Intellectual Property Commission this week.
“It was [probably] some small-time bureaucrat trying to shake his weight around,” he railed this week, after a JSE announcement was issued, taking him to task over a R6-million loan granted to Telkom chief financial officer Jacques Schindehütte in September.
Schindehütte was suspended on October 23 on a charge apparently unrelated to the loan or the share trade — though Telkom won’t say why.
Schindehütte’s suspension wiped R573-million off Telkom’s market value.
“It’s a very bad compliance notice,” Maseko said this week. “It was badly arrived at. It’s procedurally unsound.”
In a stinging attack on his status as head of a listed company, the commission ordered him to attend a course on corporate governance and direc- tors’ duties within 90 days. In the light of the embarrassing assault on his credibility, Maseko’s outraged reaction was understandable.
His counter-attack is likely to raise new issues about the competency of the companies office to ensure the rules are followed, particularly as it flagged the problem only months after the transaction and after the media spotlight on the deal.
The Telkom boss claimed the commission didn’t interview a single person at Telkom, but relied only on media reports.
The commission has been undergoing wholesale restructuring since large holes were identified a few years ago, which allowed directors to be appointed at companies without any verification process being followed.
Maseko said lawyers would be consulted and a statement issued.
However, the JSE shrugged off the slur on the fixed-line operator’s leader, with the share price marginally lower at R30.51 at the close on Friday from last Friday’s R30.88 close.
The commission also ordered Telkom to recover the loan from Schindehütte, an irrelevant demand as he had already repaid it in January.
Exactly why the respected second-in-command at Telkom was unceremoniously can- noned out of South Africa’s fixed-line telecoms provider has been the subject of conjecture.
Schindehütte received the loan on September 30 to buy 243 700 Telkom shares at R24.45 each. However, the trade took place a day before Telkom went into a closed period, during which anyone with market-sensitive knowledge of the company would have been prevented from trading the shares until November when the results were published.
Maseko and Telkom chairman Jabu Mabuza approved it. What raised eyebrows was that a week after Schindehütte’s deal, Telkom put out a trading statement, saying headline earnings for the six months to September were expected to be at least 20% higher than in the previous corresponding period.
Unsurprisingly, its share price soared, racing to a 52week high of R28.65.
In the results, a line item stating the loan to Schindehütte raised questions about the timing and the issuance.
That evening, Maseko said in a radio interview that the board had ratified the decision. He admitted the loan “might not have been in compliance with the provisions of the Companies Act”, but said this was merely a “process issue”.
This week, Maseko said Schindehütte was also not blameless. “When someone sends you an e-mail saying I want to do [something], and I say I support [the notion], I’m then assuming he will comply with the process,” he said. “I think it’s a responsibility that you do that. He failed in that.”
According to a reliable source, Schindehütte’s charge sheet contained no reference to the share trades, but related to how he allegedly hired a consultant whom he knew before.
However, he is understood to have obtained former CEO Pinky Moholi’s consent for the appointment.