Telkom an organ of state?

This may be a hard question to answer, but I want to know :

Has any court or tribunal ever made a ruling about Telkom's ownership? Just how much control must the government be able to assert before something becomes an organ of state?

Teklom was marked for privatisation, listed and the shares sold to BEE.

BUT - because teklom has no competition, the governmint figured it to be safer to keep a huge stake in the company, as a safety net to stop this dinosaur from running amok and ruining the country's economy.

Until competition actually really exists, that is going to be the excuse that governmint will use every time they are questioned about the amount of shares that governmint is holding in teklom.

Governmint opened the market a little bit to allow overseas companies to bid for the opportunity to be teklom's competition. A mix of TATA from India and some local companies won the deal in a half handed way, and a new company was formed without any real structure or form, and governmint happily took their time changing policy to only allow this new player into the market.

Suddenly governmint realised how much money it was paying teklom, and started talking to some of the members of the company created above, AND started using their infrastructure, when teklom moaned about this, governmint opened up another Teklom to run the governmint networks, and are in the process of handing that company over to select individuals.

Well, that's what my viewpoint looks like, and it's a wrather large pile of spaghetti and mush with select individuals always being handed money, overseas investors being tricked, and zero freedom for the local market, and at the same time, governmint holds onto its stake in teklom, and reaps the rewards proffered, and of course, ensures that the other specifically selected shareholders reap their rewards at the same time.

Thanks to the D.O.C.

Yeah, but that doesn't really answer whether or not Telkom is an organ of state. The reason I ask this in the first place is that the designation adds a few obligations to anything deemed to be such an organ.

For example, the Constitution states that everyone has the right to access any information held by an organ of state.

I know the technical history, but that doesn't really say much about Telkom's current status in the eyes of the law.

Well, it is a listed company, so the public has access to certain info within teklom.
But, no, it's not an organ of the state, clever of them hey?

Xarog said:

Yeah, but that doesn't really answer whether or not Telkom is an organ of state. The reason I ask this in the first place is that the designation adds a few obligations to anything deemed to be such an organ.

For example, the Constitution states that everyone has the right to access any information held by an organ of state.

I know the technical history, but that doesn't really say much about Telkom's current status in the eyes of the law.

Click to expand...

Xarog has a point.

RSA Government 38.90%
The Public Investment Commissioner 15.30%
Elephant Consortium 5.70%

Adding the RSA Government's Share to The PIC gives a total of 54.20%.
The two %'s together makes for controlling interest in TKG. 50%+ in other words.

The whole Shareholding Debacle in Telkom is really a conflict of interest on behalf of The SA Government vs The Citizens of The RSA.
Whether one can throw in the PIC's share into the equation is open for debate as essentially The PIC manages The Government's Employee's Pension Fund. One would hardly expect The PIC to allow Government to jeopardize its shareholder value as would The Elephant Consortium.

Government could sell it's share to The Chinese for all it's worth. The Chinese will make just as much money while offering a better service in my opinion. One would think that after all these years the Incumbent Monopoly has improved it's service since Listing, but unfortunately only small gains in that Dept. have been made, mostly attributable to a handful of employees.

Telkom sells it's Vodacom Asset and makes it's shareholders a once off payment.
Government sells it's stake in Telkom to the Chinese.
In the interim Chinese have obtained controlling interest in MTN.
Telkom shareholders still rich. SA Citizens have competition in the market place. Tea and Cookies for all.

Okay .. so the real question is ... what makes a company an organ of the state?
Oh look .. google. Please hold.

The constitution states :

Definitions
239.In the Constitution,unless the context indicates otherwise -
..
"organ of state" means -
#(a)any department of state or administration in the national, provincial or local sphere of government; or
#(b)any other functionary or institution -
# (i)exercising a power or performing a function in terms of the Constitution or a provincial constitution; or
# (ii)exercising a public power or performing a public function in terms of any legislation,but does not include a court or a judicial officer;

Click to expand...

Now, why do I care about this? Because if Telkom was still legally regarded as an organ of state, they'd be wholly bound by the Constitution like every other sphere of government.

The constitution also says :

#32.(1)Everyone has the right of access to -
# (a)any information held by the state; and
# (b)any information that is held by another person and that is required for the exercise or protection of any rights.

Click to expand...

If Telkom is designated as an organ of state it will be obliged to act in accordance with this provision. The argument can then quite easily be made that the prohibitive costs that Telkom forces on all of us is essentially violating our right to the access of information (held by the state, which ALL servers that Telkom owns or provides access to will technically qualify for). Since the majority of the country cannot afford these prices, and since Telkom has been shown to make ridiculous profits, it can reasonably be said that Telkom can lower its price to make this access more accessable, and thus any potential argument that Telkom cannot afford to lower prices would hopefully be defused before it got very far.

We also have the right to reasonable access to an education. The price gouging that Telkom performs makes excercising this right through the internet unviable for most, something which imo is intolerable for an organ of state to do.

Unfortunately the definition I've quoted is not terribly helpful. However, I think it would be worth a shot to argue before the CC that the intent of the provision was to ensure that the government could not avoid its responsibilities towards the people of South Africa, and that government should not be allowed to act in an unconstitutional manner merely because it can hold a majority stake in so-called 'private' companies.

Good Post Xarog!

However after several years of petitioning Government, Government adds Point (b)(iii) to the Constitution excluding Listed Companies like Telkom from these sorts of provisions.

It is like catching your own tail with Government, as Government can write amendments into The Law and our Constitution, protecting our/their investment in the incumbent.

hi Xarog

an interesting and not easy to answer question which is very relevant at the moment due to the Electronic Communications Amendment Bill currently before Parliament. Under this Bill the Minister spit wants the power to able to create a separate licensing process for state owned enterprises (such as Infraco or the Square Kilometre Array). The Minister spit argues that this is necessary to lower the costs of communicating and create better access etc etc blah

in parliament yesterday there were hearings on the bill with everyone opposed to it and a lot of people saying: currently there are 5 state owned enterprises (or majority owned enterprises) involved in the industry...all of which have some form of market dominance. WTF has this done for the lowering of telecomms costs etc etc?

one of the interesting bits is what is a "public entity" and for this you need to look at the Public Finance Management Act (PFMA) etc etc

i have sent some of the documentation to rpm and i am sure he will put some stuff up on this shortly (maybe bug him a little) - the submission made by Neotel is very interesting with regard to the point you raise


///& then of course there are many who would say that telkom is simply an organ.....

The Promotion of Access to Information Act also wrests with this problem.