Johannesburg - Telkom, Africa’s largest fixed-line services provider which is in the throes of reorganising its business, has suspended its chief financial officer, Jacques Schindehutte, pending a disciplinary hearing, the company announced yesterday.
Although Telkom did not disclose what the suspension involved, it was reported by Bloomberg that a share trade was probably at the core.
According to a record of the transaction, Schindehutte bought 243 700 shares at R24.45 a share on September 30.
Telkom, whose chief executive Sipho Maseko and chairman Jabu Mabuza would have had to approve the deal, disclosed this information to the market on October 2.
Six days later Telkom shares gained 4.2 percent when the firm announced that it expected earnings for the first six months of its 2014 financial year to rise by more than 20 percent. Schindehutte, as chief finance officer, would have had oversight in the preparation of these statements.
Since Maseko took over he has made various announcements and changes in the hope of turning around the struggling telecoms provider.
Telkom’s market capitalisation has doubled from R7.7 billion in April since Maseko’s appointment. One of the sweeping changes he introduced was a write-down of the value of assets by R12bn to reflect the company’s lower share price and implied net asset value. The market would have rebased the share price.
Meanwhile, a trade in Telkom stock had been referred to the Financial Services Board’s (FSB) department of market abuse by the JSE, Solly Keetse, who heads the FSB department, told Bloomberg.
Keetse and the JSE declined to comment further.
Telkom also rejected further enquiries, saying: “All our stakeholders will be informed of the outcome of the disciplinary hearing once the matter is concluded. Until then, the company is not in a position to provide more information.”
Deon Fredericks, the deputy chief financial officer, will act in Schindehutte’s place.
Schindehutte declined to comment, but he told online publication TechCentral that he did not possess market sensitive information that was not already public when he made the trade and that his superiors had approved the trade.
“I think it’s a bit of a grey area. It’s probably something to do with governance processes,” Farai Mapfinya, a portfolio manager at Mvunonala Asset Manager, said, adding: “There are suspicions that there could be some penalties to [Telkom] but they haven’t made it clear.”
Schindehutte, 54, was chief financial officer of Absa between 1999 and 2010, and financial director from 2005 to February 2010. He has also occupied senior roles at Transnet. He serves on the JD Group board and audit committee.
His total package of R20.04 million for the 2013 financial year included a guaranteed package of R4.97m, R2.238m in short-term incentives, fringe and other benefits of R1.2m, which included a settling-in allowance of R1.18m. Last year his total package was R20.5m, according to Telkom’s latest annual report. - Business Report