Sections 44 and 45 to blame again

SECTIONS of the Companies Act that have bedevilled the JSE are also at the heart of a dispute between Telkom and the Companies and Intellectual Properties Commission, which oversees the enforcement of the act.

The dispute relates to a possible contravention in the provision of an interest-free loan to its chief financial officer, Jacques Schindehutte.

On Monday September 30 last year, Schindehutte bought R5.9 million of Telkom shares using an interest-free loan from Telkom in terms of Section 44 of the Companies Act.

The preceding Thursday, Telkom shareholders had received a memorandum of proposed amendments to resolutions in terms of Sections 44 and 45 that were to be considered at the AGM on Friday September 27.

The document indicates that board approval was needed for Schindehutte’s Section 44 loan. It is unclear if Schindehutte got the approval in the hours between the AGM and the share purchase.

In October, Schindehutte was suspended pending an inquiry into unspecified allegations.

In November, Telkom said that the R5.9-million loan “may not have been in compliance with the provisions of the Companies Act”, apparently because board approval was not secured.

In February, the commission ordered Telkom CEO Sipho Maseko to attend a course on directors’ duties because, it believed, Telkom had contravened Sections 44 and 45 of the act. The payment to Schindehutte “was authorised prematurely” and prior to board approval.

Maseko could be referred to the national prosecutor or face a fine if he fails to attend the course. —