Will Reuben September last until November?
A telecoms analyst who spoke to the Mail & Guardian this week on condition of anonymity insisted that “Telkom has a tough task ahead of it for the next 24 months”.
Wherever Telkom is heading, one person who will not be going along for the ride is chief executive Reuben September. The question is: Will he last until November?
The market has never really liked September as the head of Telkom, and one can hardly blame it. “The market has always thought September was an experienced person and that he had value for Telkom,” said the analyst. “But not as CEO.”
Having not shown any great vision to turn around Telkom, September is in conflict with the current Telkom board, headed by Jeff Molobela, and has recently been informed that his contract will not be renewed in November this year.
Telkom claims that September decided not to renew his contract.
The government is Telkom’s biggest shareholder, with a 39.8% shareholding — or 55,4% if you include the shares held by the Public Investment Corporation and its subsidiary, Black Ginger 33. As such, the government has a “golden share” that allows it to appoint the chairperson and chief executive and to veto any decision worth more than 5% of Telkom’s revenue.
This “golden share” falls away in March 2011 and there has been speculation that the government would like a chief executive in place by then who is more understanding of its plan for Telkom.
Whether this is the reason for the decision to let September go in November — or if he is simply being made to pay the price for poor performance — is not clear.
September has alleged that Molobela broke corporate governance rules in creating a “suboptimal board” and “undermined” him. Other Telkom insiders accuse Molobela of acting like a chief executive rather than a non-executive chairman. Telkom has asked KPMG to investigate the allegations.
However, some feel that September should be made to carry the can for his many failings, the biggest and most obvious of which is the poor performance of the Multilinks business in Nigeria.
It could be argued that the buck should stop with September, as both Telkom chief executive and chairperson of the Multilinks board.
His international managing director, Thami Msimango, has already been pushed, although Telkom is claiming he resigned voluntarily.Msimango’s exit was part of a top-level purge that saw three senior Telkom executives quit last month.
The other two Telkom staffers to leave were the head of procurement, Stafford Augustine, and the head of network infrastructure provisioning, Marius Mostert. The two left amid allegations of tender irregularities leading to billions of rands in lawsuits. Again, Telkom claims they resigned voluntarily.
September’s time at the helm of Telkom is almost up and analysts are wondering: Can he see out his term until November or has his conflict with Molobela rendered him a lame-duck chief executive?
Telkom insists that the exit process is a matter between the Telkom board and September and that it will be managed so as to minimise impact on the company.
Molobela had not responded to questions from the M&G at the time of going to print.
Reuben September and Telkom << what direction should they take?
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