Mbeki blocks Telkom CEO
Instead, Business Times has learnt, Mbeki has ordered the Department of Communications to compile a report on, among other things, the circumstances surrounding former chief executive Papi Molotsane’s resignation and September’s alleged role in the saga.
Molotsane, the former Transnet group executive, resigned in April after only 18 months in the job. Reports had surfaced in January about problems between him and senior Telkom staffers, and investors. He is also said to have got on the wrong side of senior officials in the Department of Communications.
However, Harry Mathabathe, the department’s acting director- general, pleaded ignorance on Mbeki’s decision, saying: “Go back to your sources. Maybe they can give you the correct information.”
The long-serving September has been with Telkom since 1977, where he has occupied various engineering and commercial positions. In September 2005 he was appointed chief operating officer, having previously served as chief technical officer. However, even after Molotsane’s controversial departure September was not seen as a serious contender for the job.
Asked about Mbeki’s decision surrounding September, Telkom spokesman Lulu Letlape said on Friday the company was not in a position to comment “on what amounts purely to speculation”. Letlape denied that September had been “under pressure” from government or investors.
The company releases its results tomorrow and is expected to report a drastic drop in earnings. Last Monday Telkom issued a trading statement, saying it expected basic earnings per share for the six months ending September 30 to be between 14% and 20% lower than in the same period in 2006.
Telkom said its aggressive marketing — whereby bundled services were offered at discounts — and an increase in investments in materials and maintenance were the main reasons for this.
In October Business Times also revealed that the Financial Services Board was investigating possible insider trading of Telkom shares. This followed media reports about Telkom selling its 50% stake in Vodacom, reportedly valued at R75- billion.
The lucrative stake is apparently one of the thornier issues within the Telkom board. UK- based mobile telecommunications company Vodafone has first preference and wants the stake, while several politically connected businessmen are also scrambling for a piece of the pie.
Portfolio manager for Alphen Asset Management, Philipp Wörz, said the fact that the chief executive’s post has been vacant since April was worrying.
“The company is not able to get clarity on management and has no idea who will be in charge. This is worrying in terms of continuity.”
He said it was a “crucial time for Telkom”, adding that “clarity is needed sooner rather than later as to what’s going on”.
“Many people have money in Telkom and hopefully more light will be shed on Monday morning.”
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