Government must sell Telkom
Telkom must be fully privatised to prevent this national asset from being plunged into a terminal crisis.
The news today that Telkom CEO Nombulelo Moholi has resigned is tragic and 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.
I will this week call for a debate in the National Assembly on the future of Telkom.
The Department of Communications' incompetence has, for more than 20 years, crippled the economic growth of South Africa by hindering the rapid and affordable rollout of telecommunications infrastructure. Minister Pule's ham-fisted actions over Telkom this year have rapidly exacerbated the problems.
Government holds the majority shares in Telkom through its own 39.8% stake in the company and the 10.5% held by the Public Investment Corporation. Minister Pule is the Cabinet's point person in the management of Telkom.
Two weeks ago she disrupted Telkom's annual general meeting by demanding to change her votes for the Telkom board, previously submitted by proxy. As a result, competent members of the board were voted out and the company left without the requisite number of board members and no audit and risk committee in place. This has jeopardised the legality of operations of the listed company.
This follows five months after an inexplicable decision by Cabinet to abort the Telkom-KT Corporation deal that would have injected R3 billion into a risk-free expansion and skills enhancement programme.
No sound business reasons were given for this decision, and government clearly had no viable alternative in mind. Government has spent the past few months mulling options that have yet to see the light of day and has perpetuated uncertainty about Telkom's strategic direction.
Should government persist in its naive and dangerous management of Telkom we may well soon see the company come cap-in-hand to Parliament asking for a financial lifeline. Government has a dismal record in managing state-owned companies and Telkom must not be allowed to become another state-controlled failure.
As the representatives of the South African people who are Telkom's major shareholder, Parliament must debate the future of the company and the potential benefits of full privatisation.
Statement issued by Marian Shinn MP, DA Shadow Minister of Communications, November 5 2012
Click here to sign up to receive our free daily headline email newsletter
