In a major top-level purge, three senior Telkom executives quit this week amid allegations of tender irregularities leading to billions of rands in lawsuits, and following the poor performance of Telkom’s Nigerian business, Multi-Links.
Sources said the telecoms giant was in turmoil, with an emergency top-management meeting being called on Wednesday this week.
The sources said that Telkom’s head of procurement, Stafford Augustine; its head of network infrastructure provisioning, Marius Mostert; and Telkom International managing director Thami Msimango were all asked to step down this week.
But Telkom insists that they resigned voluntarily.
Asked about the emergency meeting, Telkom said it would not discuss internal matters.
“Telkom has offered voluntary severance and voluntary early retirement packages to its management personnel as part of its endeavour to improve competitiveness, reduce the cost base and improve the sustainability of the company,” it said.
“The company is grateful for the contribution of the aforementioned personnel and reiterates that they have served Telkom with unwavering integrity.”
Mostert was fingered in a May 2008 internal audit report for allegedly tampering with a microwave point-to-point tender.
Former chief operating officer Motlatsi Nzeku claims that Telkom dismissed him in February last year when he tried to discipline Mostert. In a dossier he sent to the board after his dismissal, he accused Telkom chief executive Reuben September of protecting Mostert.
Mostert was suspended in March last year pending an investigation into the microwave tender, but was reinstated three months later after an independent forensic investigation cleared him of wrongdoing.
Telkom this week denied that the allegations that he faced had anything to do with his resignation.
Poor performance
Internal sources said this week that Msimango, who heads Telkom’s international business interests, had been asked to resign after the poor performance of Multi-Links.
Telkom initially purchased 75% of Multi-Links for $280-million and in January last year bought the remaining 25% for $125-million.
The sources said that Multi-Links was expected to declare a loss of R2,4-billion and that Msimango was carrying the can for this, and particularly a decision to purchase the remaining 25% of the company when it was doing badly.
In his dossier prepared for the board, Nzeku said that the “losses, write-off and asset impairment” in Multi-Links, Africa Online and Telkom Media had all occurred under Msimango’s management.
“What happened in Multi-Links should not have been allowed to happen by September, who chairs the Multi-Links board,” he said.
Nzeku said it was “highly doubtful” that this minority equity acquisition had enhanced Telkom’s value and that it had been made at a premium.
Telkom refused to comment on the Multi-Links loss, saying that it was in a closed period in the build-up to the announcement of its results in a few weeks.
Sources said that procurement head Augustine had been asked to step down over the tender irregularities that have resulted in many lawsuits against Telkom.
In his dossier, Nzeku alleged there was evidence of incompetence by Augustine.
Telkom denied this, saying that “during his tenure — he [Augustine] has demonstrated unwavering integrity and the company is grateful for his contribution”.