Ramaphosa wins round after Telkom sues over shady deals investigation

The Registrar of the Pretoria High Court has issued an order granting the Special Investigating Unit (SIU) and President Cyril Ramaphosa leave to appeal an earlier blocking an investigation into old shady Telkom deals.

This follows a ruling from Justice Tlhapi delivered on 11 December granting the appeal.

Telkom had successfully launched a multi-part application asking the Pretoria High Court to declare Ramaphosa’s proclamation that the SIU investigate suspicious deals at the company unconstitutional and invalid.

Ramaphosa issued the directive on 25 January 2022, ordering the SIU to investigate allegations of maladministration and misconduct at Telkom.

The President referred several dodgy deals to the anti-corruption watchdog, including Telkom’s sale of its Nigerian Multi-Links operation in 2011 and the disposal of iWayAfrica and Africa Online Mauritius in 2013.

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

Ramaphosa also directed the SIU to investigate allegations of unauthorised, irregular, or fruitless and wasteful expenditure relating to telex and telegram services dating back 15 years.

Telkom has said that this 2009 complaint was the real reason the SIU motivated for a proclamation to investigate it, even though it lacks merit.

It said the complaint came from Phutuma Networks executive chair and founder Dr Edward Scott, who was in a dispute with Telkom about a 2009 tender.

Telkom said it had conducted its own investigation, which flagged possible cases of wrongdoing by two employees in one of these transactions.

According to Telkom, the matter was declared in terms of the Prevention and Combatting of Corrupt Activities Act.

“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.”

Following Ramaphosa’s 2022 proclamation for an investigation into Telkom, it launched legal action and successfully argued that the SIU had violated procedure by conducting a preliminary investigation.

It also successfully argued that it was not a state-owned entity.

This was despite Telkom’s full company name being Telkom SA SOC Limited, where SOC is an acronym for a state-owned company.

According to Telkom’s latest annual report, the South African government holds a direct 40.5% stake in the company and a 13.6% indirect stake through the Public Investment Corporation for a combined 54.1% shareholding.

Pretoria High Court

Justice Tlhapi acknowledged that there are reasonable grounds for a higher court to review whether Telkom is a state institution as defined in the SIU Act, particularly regarding the President’s power to institute an investigation.

But Tlhapi held firm in her view that the SIU began its investigation before Ramaphosa had properly issued the proclamation.

“I remain resolute in the finding that the SIU commenced with an investigation before the Proclamation was issued by the President and I would venture to say even before it approached the Minister with its motivation,” she stated.

“The updated motivation gives background of an earlier attempt to seek to issue of a Proclamation which was rejected by the former President in 2015.”

The SIU then received reams of documents from Scott, which were accompanied by a letter in which he listed what he sought to be investigated, resulting in the SIU motivating for an investigation a second time.

However, Tlhapi said there are reasonable grounds for the Supreme Court to consider whether the powers of the President under section 2 of the SIU Act should be given a wider or narrow interpretation in determining whether an investigation should be authorised.

This should also consider the impact on a person’s basic rights.

Tlhapi also acknowledged that legal technicalities aside, Scott’s allegations were serious.

“In my view the complaints by Mr Scott not only alludes to malfeasance and maladministration they also relate to issues of procurement and the President states that according to Mr Scott there had been other investigations on the complaints which had not been satisfactorily dealt with,” Tlhapi stated.

Scott welcomed Tlhapi’s ruling and reiterated that it was high time for a proper investigation into Telkom’s maladministration and misconduct for the incidents in question.

MyBroadband contacted Telkom for comment, which said it noted the order granting Ramaphosa and the SIU leave to appeal.

“We remain confident in the merits of our original arguments, in particular that Telkom is not a state institution,” it said.

“While Telkom opposed the initial probe, we respect and support the mandate of the SIU to combat maladministration in the public sector,” the company added.

“Telkom reiterates that it remains committed to the highest standards of governance and ethical conduct.”

Latest news

Partner Content

Show comments


Share this article
Ramaphosa wins round after Telkom sues over shady deals investigation