Trade-union opposition is believed to have thrown a spanner in the works of an ambitious Public Investment Corporation (PIC) plan to transfer the remaining 3,3% of Telkom it was warehousing to 1,5-million government employees, Business Day reported on Friday.
The PIC bought 15,1% of Telkom from the overseas Thintana group in November last year, after an empowerment consortium led by former communications department director general Andile Ngcaba was unable to come up with the money.
The PIC restructured the deal in May, keeping 5% of the shares itself, selling another 6,7% to Ngcaba’s group and warehousing 3,3% for a “broad-based group” that would have been decided upon later, Business Day said.
At least two reliable sources confirm that the PIC put together a deal to sell the remaining 3,3% to a group of all current 1,2-million state employees plus 300 000 former public servants.
Each employee would personally get between 10 and 20 shares in Telkom for R100 apiece, which they would pay off within the next year. The shares would then have been kept in a trust for five years.
The PIC is believed to have been ready to announce this deal to the market, until its plans were torpedoed on Thursday when it presented the plan to the Government Employees Pension Fund, the body for which it invests government pension money.
According to at least two sources, the 16-member board of the Government Employees Pension Fund refused to sanction the proposal, saying it needed time to discuss this with its investment committee.
It was believed union representatives, particularly those of Congress of South African Trade Unions (Cosatu) affiliates, were the most outspoken, Business Day reported.
This represents a political volcano for Cosatu, which came out vehemently against the original deal in which the PIC bought the shares from Thintana.
Cosatu called for the deal to be unwound and said that Telkom “must be taken back into state ownership”.
For the Cosatu affiliates in the fund now to sanction an agreement that disposes of the remaining shares could prove to be embarrassing for them.
When the PIC first said it would buy the Telkom shares in November, Cosatu was not represented on the board. But in May, a new board was elected.
Cosatu pension fund coordinator Jan Mahlangu said he could not discuss the issue until he had been briefed by Cosatu members from the meeting.
PIC spokesperson Mukoni Ratshitanga said on Thursday night that “the 3,3% stake in Telkom is still under discussion within the PIC”.
Several members of the board refused to comment on Friday night, Business Day reported.
Employees’ pension-fund spokesperson Hilton Fisher said he was “unable to comment on anything at this point”. — I-Net Bridge