DoC’s Billion Rand cash cow
The Department of Communications’ controversial 38% shareholding in Telkom has often come under the spotlight as being a hindering factor to telecoms liberalisation, but until now the DoC has refused to part with their shares.
There may be many reasons as to why the DoC is clinging on to these shares, but significant dividends from Telkom are most likely one of the main motives.
According to the DoC’s annual report, Telkom started paying dividends to the department in 2003/04. In 2003/04 Telkom paid the DoC a respectable R 228.8 Million.
This payment is however dwarfed by the 2004/05 payment of R 1.8 Billion. According to the DoC this increase was mainly a result of once-off special dividends from special transactions and activities.
With Telkom announcing another special dividend this year one can expect the next round of payments to the DoC to also far exceed the Billion Rand mark.
The Department of Communications was contacted for feedback, but nobody could be reached for comment on this issue.
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