Johannesburg - The Telkom share price shrugged off the latest incident to threaten management’s focus on its turnaround plans.
Yesterday the share price closed 0.46 percent up, at R33, following weekend reports from Bloomberg news service about an eight-page letter, from an unidentified number of employees working in six different departments, which raises questions about the way the company has appointed senior staff, and says that funds have been misused.
However, although the share price held on to the significant gains it has made over the past 12 months, analysts urged the board to act swiftly to clarify issues and assert its authority.
Meanwhile, trade union Solidarity pressed the Telkom board and management to “decide upon and lock into a strategy” for the telecommunications giant and to avoid spreading uncertainty and stress among the workers.
Marius Croucamp, the head of the communications, chemical and professional industries at the union, also raised concerns about the lack of engagement with the unions about proposed retrenchments.
He told Business Report yesterday that there had been no mention of figures relating to possible retrenchments during discussions at any of the labour relations forums at the firm. He said the union heard from weekend media reports about plans to retrench 1 000 managers and to cut the 21 000-strong workforce by almost a third within five years.
“During discussions with management we were told that there was a need to cut costs and there were too many managers, but there was no mention about numbers. In fact, they said the last thing they wanted was to retrench people.”
He added that the inevitable knee-jerk reaction to pressure to cut costs was always to reduce employee numbers. How many jobs could be cut, he said, would depend on where the board believed its future was.
“It has an extensive infrastructure to maintain, which requires manpower.” He added that it would be easy to cut costs and enhance profits in the short term but this could have devastating effects on its longer-term potential.
“They’re talking about 7 000 employees with five dependants each, being sacrificed to generate short-term profit growth.”
Croucamp said the union only learnt about the involvement of consultancy group Bain Capital in the planned turnaround programme from the weekend papers.
“Bain was contracted by the CEO [Sipho Maseko] immediately after his appointment,” he said, adding that wherever Bain went retrenchments followed.
Responding to reports about the letter from staff, who are believed to be at management level, Telkom advised those who were making anonymous allegations to use official company channels to record their allegations so that they could be properly dealt with.
“Telkom will not comment in the media on allegations received anonymously, as these allegations would not have been subjected to due process. In the absence of such processes, it is impossible to ascertain the veracity, or otherwise, of allegations made, and to comment meaningfully.”
Last week, the disciplinary hearing into chief financial officer Jacques Schindehütte commenced amid growing speculation about the precise reasons for his dramatic suspension in November last year.
Management has denied that it has anything to do with a R6 million interest-free loan from the firm that he used last year to buy Telkom shares. - Business Report