Terms of Telkom shareholding sale to Thintana put both 'above the law'

[risingtide]

My thoughts are that as Parliament is the supreme law making body, not even the government can exclude itself or others from existing laws.
The points in the shareholder's agreement which violate South African law are therefore null and void.

 

[bwana]

How can a shareholders agreement be greater than the laws of the land?

 

[DJ...]

Here is a link to the ebook on google:

http://books.google.co.za/books?id=...+africa&meta=&sa=X&oi=print&ct=title#PPA26,M1

 

[DJ...]

How can a shareholders agreement be greater than the laws of the land?

They can if the lawmakers are the major corporate stakeholders and they ensure that there are sufficient loopholes to allow them AND THEM ONLY, to benefit.

 

[BobbyMac]

One has to wonder how many other similar above the law agreements were signed by the SA government.

 

[dominic]

don't have to wonder long before you trip over the SAT3 shareholders agreement...

 

[Debbie]

sbc's role in drafting our telecoms act... this is actually commonly known... there's just never been 'proof'.

 

[Debbie]

abstract

Soon after the first democratic election in 1994, South Africa passed legislation to revamp the telecommunications sector—to roll out telephone service to the previously disadvantaged and establish an independent regulator to oversee the reform. The Government sold a 30 percent stake in the state-owned incumbent network operator, Telkom, to expand telephone service to under-serviced areas and populations. Ten years on, the reform has largely failed. Telkom, granted a 5-year period of exclusivity to expand the network, has used its monopoly power to thwart competition. It has raised prices so high as to be damaging to the economy. The Regulator has been largely sabotaged by the Government, in part due to the consequences of the haste to privatize, in part because the ANC leadership has been loath to trust democratic structures outside of its immediate control. The situation has opened up opportunities for rent-seeking under the ideological aegis of Black Economic Empowerment. The paper examines the relative failure of reform in South Africa in the context of internal South African politics and against a backdrop of sectoral reform in similarly situated countries.

Keywords: South Africa; Telecommunications; Privatization; Liberalization; Regulation; African National Congress; Black Economic Empowerment

I have full access to the article. Let me know.

 

[Debbie]

Myers contends that the South African Government at that time was inexperienced at drafting legislation of this type and relied on the expert advice SBC was only too happy to provide. Indeed, the lack of experience of the new Department of Communications (reorganized and renamed from the old Department of Posts and Telecommunications in the wake of the passage of the Telecommunications Act) was so great that SBC and Telkom lawyers and advisers—pointedly not Government officials—wrote Telkom's 25-year Public Switched Telephone Service (PSTS) license, modeling it after the license that the British government had signed with BT (Gabriele Celli, Telkom executive of regulatory and public policy, interview by author. Johannesburg, September 16, 2006).

Telkom and their big confession.

 

[DragonLogos]

I would say that is pretty much how things went - and really just the tip - right from the early IBA days, The truth will out

 

[Debbie]

Have emailed you the article Dragon.

 

[Sneeky]

Is Myers quoting Celli there, the same Dr Celli from the ADSL hearings that vigorously defended the 3 gig cap, line rental and pricing model.

 

[Debbie]

Same guy.

Strategic services agreement? http://www.telkom.co.za/pls/portal/...#search="telkom strategic services agreement"

 

[Debbie]

In rendering their decision, the arbitrators shall be bound by the Agreement
and shall interpret the Agreement under the laws of South Africa. In
addition to the foregoing, the arbitrators are empowered to act ex acquo et
bono in the event that the laws or regulations of the Republic of South
Africa would cause an unfair result.

On the date hereof, each of the SEP and Telkom represents and warrants to
the other that:
(d) neither the execution of this Agreement nor the performance by that
Party of any of its obligations or the exercise of any of its rights
hereunder will conflict with or result in a breach of any treaty, law,
regulation, judgment, court order, authorisation or agreement or
obligation applicable to that party or cause any limitation placed on
that Party or on the powers of that Party's directors to be exceeded;

(e) all authorisations legally required from any governmental or other
authority or from the shareholders or creditors of that Party for or
in accordance with the execution, validity and performance of this
Agreement, other than Permits related to the provision of Personnel,
have been obtained and are in full force and effect;

(f) that Party is not in default under any treaty, law, regulation,
judgment, court order, authorisation, or agreement or obligation
applicable to it or its assets or revenues, the consequences of which
default could materially and adversely affect its ability to perform
its obligations under this Agreement;

(h) that Party is generally subject to civil and commercial law and to
legal proceedings and neither that Party nor any of that Party's
assets or revenues is entitled to any immunity or privilege
(sovereign or otherwise) from any set-off, judgment, execution,
attachment or other legal process.

(2) The SEP represents, warrants and undertakes that:
(b) the carrying out of its obligations pursuant to this Agreement will
not conflict with or constitute a breach of, or default under, any
contract or agreement or arrangement to which it is a party or by
which it may be bound, nor will any such action result in any
violation of any treaty, law, judgment or court order save where
absence of such title or conflict with, breach of or default under any
contract, agreement or arrangement or violation of any treaty, law,
judgment or court order would not in any such case materially or
adversely affect the ability of the SEP to perform its obligations
under this Agreement;

(3) Each Party undertakes that such Party shall use its reasonable endeavours
to comply with and cause its Affiliates to comply with all applicable laws
of South Africa, and Telkom and its Affiliates shall not at any time conduct
any business or take any act which would cause the SEP, its owners, any
Personnel Providers or any of their Affiliates to be in violation of such
laws.

9 Indemnification
(1) None of the SEP, the Personnel or any Personnel Provider, any of their
Affiliates, officers, directors, and each of their respective assignees,
subcontractors, directors, officers, shareholders, employees or agents shall
be liable to Telkom or any of its Affiliates for any claim, loss, damage or
expense whatsoever sustained or incurred by Telkom or its Affiliates as a
result of the actions or the failure to act of the SEP, the Personnel or such
Personnel Provider; provided, that the SEP fully shall indemnify and hold Telkom or any of its Affiliates, officers, directors and each of their
respective assignees, subcontractors, directors, officers, shareholders,
employees or agents harmless from and against any claims, damages or
liabilities actual or alleged, costs and expenses, including attorneys' fees
and expenses (including investigative costs) arising directly from the wilful
misconduct of the Personnel in connection with the provision of the
Strategic Services to Telkom in accordance with the terms of this
Agreement. Notwithstanding anything contained herein to the contrary,
none of the SEP, the personnel or any personnel Provider or any Affiliate
thereof or any other person shall have any liability to Telkom or its
Affiliates whatsoever for any indirect losses, consequential or incidental
damages, including, without limitation, loss of profits or goodwill,
sustained or claimed by any person, firm, company or organisation
whatsoever and howsoever arising, including, without limitation, as a result
of the performance or non-performance hereunder by the SEP, the
Personnel or any Personnel Provider.

(2) Telkom shall fully indemnify and hold the SEP, the Personnel, any
Personnel Provider and their Affiliates and each of their respective
assignees, subcontractors, directors, officers, shareholders, employees and
agents, harmless from and against any claims, damages or liabilities, actual
or alleged, costs and expenses, including attorneys' fees and expenses
(including investigative costs) arising directly from Telkom's acts related to
this Agreement, except to the extent caused by the wilful misconduct of the
SEP, the Personnel or the Personnel Provider, as the case may be.
(3) Telkom shall fully indemnify and hold the Personnel harmless from and
against any claims, damages or liabilities, actual or alleged, costs and
expenses, including attorneys' fees and expenses (including investigative
costs) arising from acts of the Personnel to the same extent that Telkom
would ordinarily indemnify its officers, directors, representatives and/or
employees, as the case may be.

(3) This Agreement shall terminate, at the option of the SEP, upon the
occurrence of any of the following:
(d) the Shareholders' Agreement terminates for any reason or the
Minister (as therein defined) breaches any of the terms thereof; or
(e) the consent rights, board and committee representation rights or any
other rights granted to the SEP under the Shareholders' Agreement
or Telkom's Memorandum and Articles of Association are deemed
or become unenforceable for any reason;

.

 

[Debbie]

11 Confidentiality
(1) The Parties recognize that any and all information, know-how and
management material and expertise (collectively, "Confidential
Information") disclosed by any Party or any Personnel Provider or any of
their respective employees, agents or other representatives under this
Agreement or in connection with the provision of Strategic Services
(whether directly or indirectly) is the exclusive property of such Party or
Personnel Provider, as applicable. Subject to Clause 4, each of the Parties
(the "recipient") agrees in relation to the Confidential Information of any
party (the "owner"):

(a) to use the Confidential Information of any owner solely for the
purposes contemplated by this Agreement and as necessary in
connection with the business and affairs of Telkom;

(b) to keep such information confidential and to disclose it only to their
or their Affiliates' officers, directors, employees, representatives,
consultants and professional advisers or such other persons who
have a need to know such information in connection with the
business or affairs of Telkom or the recipient or their respective
Affiliates, who are aware of the recipient's obligations of
confidentiality hereunder with respect to such information and have
agreed to comply with such obligations (it being understood that any
recipient which discloses any Confidential Information to any other
person shall be responsible for any further use or disclosure of such
information in breach of the restrictions contained herein).

(c) at any time requested by an owner in writing, and upon termination
of this Agreement, promptly deliver (or caused to be delivered) to
the owner or, if requested by the owner, destroy (or cause to be
destroyed), in either case without retaining any copies thereof, all of
the owner's Confidential Information in the possession or control of
the recipient or its Affiliates or their respective officers, directors,
employees, representatives, consultants and professional advisors.
This Clause (c) is applicable to all documentation and other
materials (including magnetic and optical storage media) and all
copies thereof containing or embodying Confidential Information,
including documentation and materials such as specifications,
manuals, training material, written instructions, schedules and plans.

(2) The foregoing notwithstanding, no recipient shall be obligated to treat
information as Confidential Information of an owner under this Agreement
if:
(a) such information enters the public domain other than in breach of
this Clause 11 or any other obligation of confidentiality owed to the
owner thereof;
(b) such information was lawfully received by the recipient from a third
party who, to the knowledge of such recipient at the time of
disclosure, was not subject to any duty of confidentiality, directly or
indirectly, to the owner thereof;
(c) such information was expressly in the files of, or known to, the
recipient (or its officers, directors, employees, representatives,
consultants or professional advisors), provided, that knowledge
thereof was not obtained, to the knowledge of such recipient, as a
result of a disclosure by a third party in violation of any duty of
confidentiality, directly or indirectly, to the owner thereof; or
(d) such information is independently developed by the recipient (or its
officers, directors, employees, representatives, consultants or
professional advisors) or on their behalf without the use of
Confidential Information of the owner thereof.

(3) No Party hereto shall be restricted in disclosing any Confidential
Information of any owner if and then only to the extent that such disclosure
is required by law or enforceable legal process, or by the rules of any
securities exchange or regulatory authority having jurisdiction over such
party, provided the party required to make such disclosure (a) provides the
owner of such Confidential Information notice of such requirement as soon
as practicable after the party obligated to make such disclosure learns of
such requirement, and thereafter consults with the owner thereof before
making any disclosure of such information and (b) takes all reasonable
steps (including steps reasonably requested by the owner thereof and any
Party which is an Affiliate of such owner) to oppose or prevent the disclosure, to limit, to the maximum extent reasonably possible, the scope
of such disclosure and to obtain confidential treatment by the recipient of
such disclosure.

(4) The provisions of this Clause 11 shall survive termination of this
Agreement for a period of two (2) years from the date of such termination.

14 Entire Agreement
This Agreement, including its Schedules, contains the entire agreement and
understanding of the Parties in relation to its subject matter and supersedes
all prior oral or written negotiations, agreements, representations,
understandings or arrangements (if any) between or among the Parties with
respect to its subject matter, including expressly the MTSA and the
Original SSA, but expressly not including the Share Transfer Agreement
and the Shareholders' Agreement.

20 Severability
Whenever possible, each provision of this Agreement shall be interpreted in
such manner as to be effective and valid under applicable law but if any
provision of this Agreement shall be unenforceable and invalid under
applicable law such provision shall be ineffective only to the extent of such
unenforceability or invalidity and the remaining provisions of this
Agreement shall continue to be binding and in full force and effect.

.

 

[DragonLogos]

Well that explains a lot. heads need to roll - thanks for the email, also a interesting read - I will be looking for some old tapes

 

[Nod]

And Slashdot have it too: http://slashdot.org/articles/07/08/26/1642210.shtml

 

[kifoth]

And Slashdot have it too: http://slashdot.org/articles/07/08/26/1642210.shtml

I did that

 

[Debbie]

Nice kifoth.

Also, American SBC managers received salaries that that were way higher than the South African managers they supposedly reported to.

 

[MrSmith]

How SBC (AT&T) Pillaged South Africa's Economy - Slashdot

http://slashdot.org/articles/07/08/26/1642210.shtml

Kifoth writes "For 8 years, SBC and Telekom Malaysia controlled South Africa's only telecommunications company, Telkom. Telkom had a government granted monopoly in order for it to connect the large parts of South Africa that had been neglected under apartheid. Instead of helping, SBC abused their position and raised Telkom's prices to be among the highest in the world. The billions they made here ultimately went to fund their AT&T merger. From the article: 'SBC, described as "congenitally litigious", is said to have played a major role in the failure of South Africa's telecoms policy to develop a competitive telephone service. Under SBC's control Telkom not only failed to meet its roll-out obligations but behaved "as a tax on industry and a drag on economic growth."