Asha Speckman and Bloomberg
THE GOVERNMENT chose not to comment on the resignation of Telkom chief executive Nombulelo Moholi yesterday even while speculation mounted that it was the underlying cause of her departure.
Siya Qoza, the spokesman for Minister of Communications Dina Pule, said: “We are not commenting at this point in time.”
Moholi’s exit comes less than a month after Telkom’s annual general meeting (AGM) on October 24 where chairman Lazarus Zim stepped down, at least a year before his contract was due to expire.
Neo Phakama Dongwana, a board director, also resigned last Friday after holding the position for nine months, Telkom said in its statement.
Neither Moholi nor Dongwana had provided reasons for their resignations.
Moholi could not be reached by cellphone.
Two months ago she poured cold water on rumours that she was planning to leave. “There’s nothing like that… All I can give you is I’m denying the rumour,” she had said.
The DA’s Marian Shinn called Moholi’s resignation “tragic”, adding that it was “further proof that seasoned professionals find Communications Minister Dina Pule’s amateurish and reckless meddling in the affairs of a listed company intolerable, setting them up for possible prosecution under the Companies Act, and setting the company on a path to bankruptcy”.
Standard Bank head of stockbroking Rudi van der Merwe said: “The government’s shareholding and influence creates a lot of uncertainty at Telkom.”
Trade union Solidarity said Moholi’s resignation would add to the instability.
Shares dropped as much as 3.8 percent to their the lowest intra-day level in three weeks. Shares recovered slightly in the afternoon to close just 3.1 percent down at R17.64.
Moholi, an engineer with 24 years’ experience in the telecoms industry, will become the fifth chief executive to depart from Telkom in the past eight years.
“She has given the company six months’ notice of her intention to quit before her contract expires,” Telkom said.
Her resignation drew mixed responses and analysts believed interference from the government, which holds more than 40 percent of Telkom via a 39.8 percent direct stake and a 10.5 percent stake through the Public Investment Corporation (PIC) may have been the last straw.
The PIC said it had “noted the resignation of Telkom’s Nombulelo Pinky Moholi with regret as we would have liked to see some stability at the executive level”.
International Data Corporation programme manager for telecoms in Africa Spiwe Chireka said: “She had the authority without the power.”
Earlier this year the state blocked a fairly advanced transaction to sell 20 percent of Telkom to Korea’s KT Corporation because it regarded Telkom as a strategic asset.
The deal would have injected much-needed skills and capital as the firm looked to expand into broadband and cellphone markets.
At the AGM, Pule changed the government’s earlier vote via proxy. The restart of the voting ended with the purging of four independent directors which left Telkom without a lead independent director and votes against two share incentive schemes.
Telkom said it had at least eight directors, as required by its memorandum of incorporation, and a process was under way to appoint additional directors, after which it would recruit a new chief executive.
“The company would like to emphasise that Ms Moholi’s intended departure does not impact on its operational capabilities, and on its ability to provide customers with the best possible service,” it said.
Moholi appeared to be sidelined over the past few months as Pule increasingly began to articulate Telkom’s strategy, which she submitted to the cabinet. Telkom asked the government to allow it to sell a stake and was waiting for a response.
David Couldridge, a senior investment analyst at minority shareholder Element Investment Managers, said yesterday the best option would be for the government to sell its shares to an organisation “with the necessary skills, track record and access to capital. The majority shareholder’s track record is linked to the destruction of value for all stakeholders.
“Government should instead focus on creating enabling policy to ensure the sector builds networks, competes fairly and delivers sound service.” Business Watch, page 14