Suspended Telkom CFO ordered to pay back loan

Can he trade those shares immediately? I'm sure he's made a nice profit seeing the upward movement of Telkom's share.
 
and considering that the rally is all on sentiment not a bad time to sell
 
OokMobile said:
Just what was that money for?
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he lent money from the company - execs do so to buy houses to relocate and what not
used the money to buy shares in the company

there is a bar on doing this in the Companies Act - I suspect it has to do with the idea of the company buying shares without collective shareholder agreement

The company wants the loan to be paid back
If he sells the shares now he makes more than pocket change
 
Added that he applied for the 6 Million Telkom loan to himself, approved it himself and then proceeded to pay it out himself.....to himself....:D Telkom is a lekker place to work ey...
 
Paul Hjul said:
he lent money from the company - execs do so to buy houses to relocate and what not
used the money to buy shares in the company

there is a bar on doing this in the Companies Act - I suspect it has to do with the idea of the company buying shares without collective shareholder agreement

The company wants the loan to be paid back
If he sells the shares now he makes more than pocket change
Click to expand...

It's more about protecting a company from being impoverished by a third party using the company's funds to acquire shares in it. In other words, the shareholder exiting won't care that the company is the worse off in the transaction because he's exiting, whereas the new shareholder acquires ownership by using the company's own funds.

I have no idea how you can be a CFO and not be aware of, at the very least, the financial assistance restrictions in the Companies Act. To become a CA, you have to study the Companies Act too. Together with the JSE Listings Requirements, how could he have not known?
 
In my mind s226 of the 1977 Act is clear as rain (even if a little oddly set out) whilst the Companies Act of 2008 is clear as mud on all points and I actually don't know that s226 is duplicated in the "new" Act s44 and s45 as the new legislation creates a lot more wiggle room.

The fact that Telkom is now an SOC is also a muddier of all things.

But ja as I see it the conduct is a major indictment on corporate governance at Telkom but that should lead to questions about top management responsible for corporate governance as much as the CFO, after all she is an advocate and ought to know the legislation.
 
and given he did all of this a few days before a trading update that was quite positive for the telkom shares.
 
milomak said:
and given he did all of this a few days before a trading update that was quite positive for the telkom shares.
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As far as I understand it sensitive information was not in issue and it looked like a bet on the company that was started quite a bit earlier than the issue of the loan

what I am a lot more worried about is whether the loan idea was commenced by the board when launching an investigation on an unrelated matter that lead to his suspension as it is a fairly problematic way to deal with something quietly: http://www.bloomberg.com/news/2014-...eal-with-cfo-alleged-misconduct-quietly-.html
 
Paul Hjul said:
In my mind s226 of the 1977 Act is clear as rain (even if a little oddly set out) whilst the Companies Act of 2008 is clear as mud on all points and I actually don't know that s226 is duplicated in the "new" Act s44 and s45 as the new legislation creates a lot more wiggle room.

The fact that Telkom is now an SOC is also a muddier of all things.

But ja as I see it the conduct is a major indictment on corporate governance at Telkom but that should lead to questions about top management responsible for corporate governance as much as the CFO, after all she is an advocate and ought to know the legislation.
Click to expand...

You mean the Companies Act, 1973 ;)

Section 226 is now loosely incorporated into section 45, but section 44 is the key section here because the proceeds of the financial assistance were used to acquire shares. Didn't know she was an advocate too - seems corporate governance is lacking.

Though, I would be surprised if Telkom didn't have a general standing authority in place to provide financial assistance. I can't really comment further, my chairman attended their last meeting on behalf of Government.
 
ja 73 - thanks, brain fart; happens when I post early in the morning :D

When I read of the transaction I thought it offended s44 but I do have a general disdain (if you couldn't tell yet) for the "new" Act. I mean really if something coming out of the 70s is better you know you have a problem :). I'd assumed that an authority was given at the shoes AGM for facilities to be made available

Yep: http://investing.businessweek.com/research/stocks/people/person.asp?personId=35745725&ticker=TKG:SJ
Ms. G J Ouma Rasethaba serves as the Chief of Regulatory and Corporate Affairs of Telkom SA Ltd. Ms. Rasethaba had been the Chief of Corporate Governance of Telkom SA Ltd. since November 2007. Ms. Rasethaba served as an Acting Chief Corporate Affairs Officer of Telkom SA Ltd since May 1, 2007. Ms. Rasethaba served with Telkom in February 2006 as Group Executive of Regulatory and Public Policy. She practiced as an advocate of the High Court of South Africa. She also served as Special Director of Public Prosecutions at the National Prosecuting Authority from February 2000 to January 2006. She serves as a Non-executive Director of TDS Directory Operations (Pty) Limited. Ms. Rasethaba holds a Bachelor's degree in law (B.Proc.) from the University of the North, an Honours degree in law (LLB) from the University of the Witwatersrand, a Masters degree in law (LLM) from the University of Pretoria as well as a Higher Diploma in Company Law from the University of the Witwatersrand.

Looking at the Telcordia judgment of the SCA, the attitude towards LLU and the Telkom Foundation debacle (where really a person has no idea what happened) it is clear that there is an absolute crisis of corporate governance that continues to pervade Telkom
 
Crazy. At the very least I hope proper SENS announcements were made...
 
A SENS announcement of the share purchase was made:
https://secure1.telkom.co.za/ir/news/sens/sensarticle-390.html

Not seeing anything about the loan being authorized specifically but I assume it falls under special resolution 4:
https://secure1.telkom.co.za/ir/news/sens/sensarticle-389.

Of course of some remote interest - especially if we look at the bigger picture of the last few weeks - the 52k shares held by the CEO are worth a pretty penny today
https://secure1.telkom.co.za/ir/news/sens/sensarticle-381.html
 
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