Johannesburg - South African fixed-line operator Telkom SA said on Thursday it had suspended its chief financial officer due to an investigation into unspecified allegations against him.
Shares of Telkom fell more than 3 percent as investors worried the suspension of Jacques Schindehutte could be a setback to Chief Executive Sipho Maseko's plans to turn around the ailing company.
“The suspension follows the findings of an investigation commissioned by the board after certain allegations were made against Mr. Schindehutte,” Telkom said in a statement.
“The board has a duty to investigate and to test the validity of allegations which are brought to its attention through an appropriate process, and will do this fairly, without favour or prejudice.”
Schindehutte had been suspended as of Thursday, the company said, adding Deon Fredericks will serve as acting CFO until a disciplinary process is finished.
It did not give any details about the allegations or the investigation.
Telkom's profits have been falling for years owing to stiff competition from mobile operators MTN Group and Vodacom, which it previously owned.
It has also been hurt by the failure of an expensive attempt to expand into Nigeria, and by a rapid turnover of chief executives.
However Maseko, the sixth chief executive since 2005, appears to be convincing investors Telkom is getting back on track: its shares have more than doubled over the last six months and it expects a 20 percent increase in first-half earnings.
The CFO of MTN, Africa's largest mobile operator, resigned in July due to an investigation into allegations against him.
MTN has said the allegations against Nazir Patel have to do with governance and would not impact its financial results.
Shares of Telkom were down 3.4 percent at 27.05 rand at 11:39 SA time. - Reuters