Telkom and Eskom will go wireless

Telkom chief ‘negotiated against board’s wishes’

December 2 2010 at 05:59am
By Asha Speckman

Independent Newspapers
Jeffrey Hedberg, the acting Group CEO of Telkom, speaks during their interim results session at Summer Place in Johannesburg.
Telkom is in talks with Middle East telecoms operator Etisalat to sell the cellphone division of Multi-Links to Etisalat’s Nigerian business.

This came out in a whistle-blowing report on the alleged lack of corporate governance at Telkom that the Communications Workers Union (CWU) sent to Telkom last week.

The report, a four-page letter written by a Multi-Links executive to the public protector, claims acting Telkom chief executive Jeffrey Hedberg and his team presented the board with several options to “save” the loss-making Multi-Links, which Telkom bought for $410 million (R2.9 billion at yesterday’s exchange rate).

One of the options included selling 80 percent of the business’s network to Etisalat, a suggestion allegedly rejected by the board of Telkom.

However, the parties still pursued the arrangement.

“In the interim, it is common knowledge to the entire company that Multi-Links acting chief executive and acting CSMO (chief sales and marketing officer) are involved in discussions with Etisalaat (sic) regarding the merger/sale due to the absence of viability of the company. This absence of viability (was) totally created and (is) currently still being engineered by themselves,” the executive wrote.

Telkom spokesman Pynee Chetty refused to comment this week. “Telkom does not comment on speculation,” he said.

Etisalat in Nigeria was not available for comment nor was its headquarters in the United Arab Emirates, and the public protectorate could not confirm receipt of the letter by the time of going to press.

Thabang Mothelo, the CWU shop steward at Telkom, said yesterday the union had followed up with Telkom’s chief of corporate governance, Ouma Rasethaba, as Hedberg was currently in the US. “She said they (Telkom) would respond today.”

In the meantime, Telkom is facing a possible legal battle over its decision to terminate a 10-year contract between Multi-Links and Africa Prepaid Services Nigeria, a subsidiary of local prepaid services company Blue Label Telecoms.

Ashleigh Fenwick, a spokeswoman for Blue Label, said the parties were involved in “discussions in the background” and could not confirm legal action at this stage.

Fenwick declined to give the value of the contract or damages it wanted to sue for.

Ijeoma Abazie, the chief corporate affairs officer at Multi-Links, said the contract was terminated “based on a number of breaches”, but Multi-Links would not comment until an actual claim was instituted.

Blue Label was two years into the contract for which it had exclusive rights to sell, market and procure customers for Multi-Links CDMA services and products.

“Basically this termination is unlawful. We had a very successful delivery on the Multi-Links contract. The reality is there is life after Multi-Links,” said Fenwick.

Hedberg said earlier this year that several supplier contracts would be terminated to save Multi-Links.

Telkom impaired the Nigerian business by R5.6bn at the end of March and a further R201m at the end of September.

IOL News

Comments by Sonny

When Telkom, Eskom and City Power has lost their wiring to cable thieves, SA will go

wireless!!

All our birds will migrate North!