Johannesburg - Telkom agreed to stop giving financial help to directors to buy shares in the South African phone company three years after a loan to former Chief Financial Officer Jacques Schindehutte was found to have breached the terms of the Companies Act.
The move came after meetings with investors ahead of the company’s annual shareholder meeting in Pretoria on Wednesday, Telkom said in a statement.
The effect will be that the operator “will not have the authority to provide financial assistance to directors and prescribed officers to enable them to meet the company’s share ownership requirements for top management”, Telkom said.
Schindehutte was told in 2014 to repay a zero-interest, R6-million loan from the company that was used to buy shares after it was found to have breached corporate rules. He left the company later that year following an internal investigation into unspecified allegations made against him.
Chief Executive Officer Sipho Maseko was ordered by regulators to attend a director-duties course as a punishment for allowing the loan to be awarded.
Shares in Telkom, almost 40 percent owned by the South African government, gained 1.4 percent to R63.87 as of 2.07pm in Johannesburg on Monday, valuing the landline operator at R34 billion.
BLOOMBERG