Telkom chief executve Nombulelo "Pinky" Moholi announced her resignation.
The shares recovered slightly by midday, showing a 3% loss on its opening price of R18.05, but reaction to Moholi's resignation has been one of concern for the future of Telkom, which has seen a number of board resignations, including that of Neo Phakama Dongwana.
Dongwana's resignation was announced alongside Moholi's on Monday, making her the fifth board member to resign since last month's annual general meeting, where four independent non-executive directors were allegedly ousted by government and the Public Investment Corporation. Chairperson Lazarus Zim stepped down after the meeting.
The SENS statement said Moholi had given a requisite six month notice to allow Telkom to find a replacement.
Moholi became the first black woman to head up a Johannesburg Stock Exchange-listed telecommunications company after she was appointed to the position in April last year. She replaced acting head Jeffrey Hedberg, who decided in 2011 not to renew his contract.
She had worked previously for Telkom as chief sales and marketing officer, leaving to work at Nedbank for a few years before returning toTelkom as managing director and finally being appointed chief executive.
Shares in Telkom are down nearly 40% so far this year, a clear indication of a lack of investor confidence. The situation is unlikely to improve in light of rumours of ongoing government meddling; Telkom's R449-million fine from the Competition Tribunal for bullying; a failed attempt to expand into Nigeria; and an unsuccessful bid for 20% of the parastatal by Korea Telecom. Added to this is the poor performance of the parastatal.
Reacting to Moholi's resignation, the Democratic Alliance called for Telkom to be fully privatised, saying government has "dismal record in managing state-owned entities".
Trade union Solidarity said it was important that a worthy replacement be found for Moholi, who could inspire confidence in the parastatal.