Telkom’s shady deals — “We already investigated and went after the culprits”

Telkom has responded to President Cyril Ramaphosa proclamation instructing South Africa’s anti-corruption watchdog, the Special Investigating Unit (SIU), to investigate dodgy deals at Telkom dating back to 2016.

The Presidency’s surprise announcement was published in the government gazette on Tuesday after he had signed it on 14 January 2022.

Among the issues Ramaphosa referred to the SIU is Telkom’s 2011 sale of its botched Nigerian operation, Multi-Links, and the sale of iWayAfrica and Africa Online Mauritius in 2013.

Late communications minister Roy Padayachie revealed in July 2011 that Telkom had made a R7 billion loss on Multi-Links after acquiring it in March 2007.

“Telkom notes [the Government Gazette] giving the SIU authority to investigate possible maladministration in the sale or disposal of iWayAfrica, Africa Online Mauritius and Multi-Links Telecommunications Limited,” the company stated.

“Telkom follows robust corporate governance principles. All matters relating to these transactions are on the public record.”

The partially state-owned telecommunications giant said that its own investigation flagged possible cases of wrongdoing by two employees in one of these transactions.

It was declared in terms of the Prevention and Combatting of Corrupt Activities Act, Telkom said.

“Telkom issued civil summons against an employee with an eye to recovering losses amounting to $5 million relating to activities incidental to the transaction,” it added.

“As the matter is the subject of a criminal and civil nature, Telkom will deal with the case on its merits in the appropriate forum, in the appropriate manner, at the appropriate time.”

Telkom did not comment on the first part of Ramaphosa’s directive instructing the SIU to investigate allegations of unauthorised, irregular, or fruitless and wasteful expenditure incurred by Telkom or the state with several Telkom contracts.

These contracts relate to telegraph services — telex and telegrams — and advisory services in respect of the broadband and mobile strategy of Telkom.

The advisory services mentioned in the proclamation may refer to the billions Telkom reportedly spent on consultants over the years, including a R200 million contract with Bain & Company, and a separate contract with consulting firm A.T. Kearney.

When questioned about these contracts at the time, Telkom defended them, saying it received value for the money spent.

Now read: Telkom drops interdict against network capacity auction — for now

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Telkom’s shady deals — “We already investigated and went after the culprits”