Telkom not picking up on corruption claims
Telkom is taking an almost silent approach to accusations of dodgy tenders and claims that its sale of Vodacom is a huge and possibly tainted decision, with its CEO and chief financial officer remaining tight-lipped on the issues on Monday.
The company has issued a brief statement denying that a tender awarded to Ericsson was fiddled with, but it will not comment on claims by the Communication Workers Union (CWU) that Telkom staff have altered some documents to sway the results.
Now the CWU has become oddly silent too, despite promising last week to name names.
Telkom has always been a target for allegations of incompetence and anticompetitive practices, but now it is being accused of outright corruption and individual profiteering as it undergoes a complete overhaul.
The sale of 15% of Vodacom to British operator Vodafone for R22,5bn is drawing much of the fire. Equal criticism is being heaped on its plan to outsource the annual R4,8bn task of running its fixed-line operations, in a move that may see 19000 of its 26000 staff axed from its payroll and transferred to a third party.
The rumblings of discontent grew louder last week, with allegations that certain officials have interfered in the awarding of tenders.
The first protests by the CWU were mild, with claims that selling Vodacom to the British posed a threat to national sovereignty and would hamper efforts by the government to deliver services to its citizens. Last week, the union belatedly demanded that the deal be scrapped, and for the government to buy the shares in Vodacom to protect a South African asset.
CWU president Joe Chauke also says a suspicion that people were paid to support the sale of Vodacom to Vodafone cannot be ruled out.
Telkom’s plan to outsource its core activities has been slated by the CWU and the South African Communications Union, which say that restructuring to improve service quality or cut costs should not result in outsourcing. But this is not a straightforward objection, since they suspect that efforts to outsource the operations are somehow linked to the political upheaval, with some old guard executives aiming “to secure their futures” before a new cabinet imposes any changes to their ranks.
The heap of allegations engulfing Telkom rose when the South African Communist Party (SACP) claimed that proceeds from the sale of Vodacom may help to fund the new Congress of the People, which counts communications department director-general Lyndall Shope Mafole among its members.
Shope-Mafole says she would welcome an investigation to quash the unfounded insinuations that cash from the deal will find its way to the party.
None of the wide-ranging accusations has been proved, although Chauke claims to hold evidence that officials have altered documents to influence who wins Telkom tenders. Chauke was due to meet Telkom CEO Reuben September last week to raise the union’s concerns and to name the culprits behind allegedly corrupt tenders. On Monday, Chauke could not be reached for comment, and the CWU’s national treasurer, Richard Poulton, was unable to confirm whether the meeting took place.
However, a meeting is scheduled for Friday to discuss the contentious issues, Poulton says, including outsourcing, the sale of Vodacom and Telkom’s move to buy internet service provider MWeb Africa.
The latest accusations against Telkom were raised in Sunday’s Business Times, which alleged that a tender won by Ericsson and Telsaf Data was corrupt. The paper quoted the CWU as saying the tender was totally flawed, partly because Ericsson won despite initially failing some tests. It also said a failed local bidder would try to stop the deal as it was not given a reason why it lost out.
Telkom’s only response to the whole seething mass of allegations has been a statement saying it rejects claims that its procurement process is flawed and denies that documents were altered in favour of the successful bidder.Telkom’s tender processes were extremely stringent and involved cross functional teams to prevent unilateral decision-making, it said.
Maredi achieved unsatisfactory scores in certain categories and was therefore disqualified, the statement said.
Poulton says the allegations raised in the newspaper are “quite curious”, but the union does suspect that some Telkom staff are tainted. “There are certain elements at senior executive that have allegiances with certain service providers. There is a group aligned to Ericsson and a group aligned to Alcatel.”
Since Ericsson is in the running for the outsourcing deal that will affect 19000 jobs, there are serious implications if someone in the tendering process favours that company.
Pinpointing why so many accusations have surfaced and where the truth lies is tough. Hopefully it is simply a mixture of sour grapes, unions defending their turf, and political splits triggering the usual backbiting and pot-shots at the enemy.
Irnest Kaplan, MD of Kaplan Equity Analysts, says many of the allegations sound like nonsense. One crucial question is how Telkom will actually spend the R10bn it will retain from selling Vodacom, but that has been buried under all the bickering and sniping.
“In every single contract there are always people crying foul and saying it wasn’t done correctly. Someone’s always upset because they didn’t get the money,” Kaplan says. “Telkom has spent tens of billions of rands over the past five years with no major scandals. I don’t see any corruption here because its track record is pretty good, although you can’t rule it out.”
On the question of selling Vodacom, Kaplan says it makes sense as the fixed and mobile entities never worked well together. Telkom is getting a healthy fee for the shares and the deal frees both companies to follow their own strategies.
Outsourcing its networking facilities to a service provider that can operate them more efficiently is also laudable and in line with global best practices, despite union protests, Kaplan says.
The only thing that seems certain is that Telkom has a heap of problems, and ignoring them is doing it no favours.
Loading ...