/ 13 December 2010

Govt urges Telkom to act on graft claims

Govt Urges Telkom To Act On Graft Claims

The government on Monday told Telkom to “move swiftly” in dealing with allegations of widespread corruption within the company.

“I urge them to move swiftly in attending to these allegations to restore investor and public confidence in this crucial asset,” Communications Minister Roy Padayachie said in a statement.

He was confident Telkom’s board would deal with the issue and believed it had a fiduciary responsibility to ensure Telkom observed good governance.

“I’m encouraged to note that the board and its senior management view the allegations in a serious light and that they have committed to institute a thorough investigation into these issues.”

The Communication Workers’ Union (CWU) condemned the suspension of its shop stewards at Telkom following the disclosure of the corruption dossier, spokesperson Matankana Mothapo said in a statement on Monday.

The union demanded the reinstatement of its “unduly suspended” shop stewards. It was “greatly disturbed” by the dossier, which raised allegations of mismanagement, nepotism, bribery and fraud. The CWU was studying the document and would comment later.

‘Wide range of unsubstantiated statements’
Reacting to the issue on its website, Telkom said it was aware of a number of memoranda containing a “wide range of unsubstantiated statements relating to the alleged lack of corporate governance in Telkom”.

A number of matters contained in the memoranda were already known to Telkom and were in various stages of investigation.

The Telkom board and its audit and risk committee (ARC) had already acted on the findings of several investigations into matters at Telkom and its Nigerian subsidiary, Multi-Links, over the last year.

The ARC’s actions had led to official criminal investigations and internal disciplinary processes.

Forensic auditors at Ernst & Young were tasked by the Telkom board to perform an investigation into Multi-Links, which culminated in criminal and disciplinary action. The findings of the investigations were handed to the South African Police Service and the National Prosecuting Authority for consideration. They subsequently instituted criminal investigations into certain activities at Multi-Links.

“Telkom is not in a position to provide further details of the criminal investigations.”

According to ARC chairperson Sibusiso Luthuli, apart from issues already examined by Ernst & Young and other investigations, many of the statements in the recent dossiers were “frivolous personal attacks on certain senior Telkom executives”.

“The documents that have been placed in the public domain recently are deliberately malicious and are intended to undermine and damage Telkom’s reputation.” — Sapa