/ 14 February 2010

Knott-Craig denies R1m per month retainer

Knott Craig Denies R1m Per Month Retainer

Former Vodacom chief executive Alan Knott-Craig on Sunday denied being paid R1-million a month by the network operator.

He said he did have an agreement with Vodacom, but denied that his retainer was R1-million.

“Whilst I cannot disclose my remuneration, my before-tax monthly remuneration is significantly less than half [a] R1-million,” Knott-Craig said in a statement.

“I have a two-year agreement to render services to the Vodacom Group CEO personally, which also restrains me from working in South Africa,” he said.

He was responding to allegations in the Sunday Times that Vodacom had paid him R1-million a month as a retainer from March last year.

The newspaper alleged that Vodacom never disclosed the payment to shareholders, which includes the South African government.

“This agreement prohibits me from working in any way for any company in the ICT industry in South Africa, and in effect totally prohibits me from seeking employment in my field of expertise,” said Knott-Craig, adding that he paid his own travel and office expenses.

‘Poor judgement’
The Mail & Guardian on January 22 reported that a failed bid to become Vodacom’s multibillion-rand black economic empowerment partner was behind “nepotism” storm that erupted over the head Knott-Craig.

The M&G obtained court documents showing that a contentious KPMG forensic report — the source of the allegations against Knott-Craig and his family — has been resurrected by axed Vodacom manager Mandla Mdluli in his Johannesburg Labour Court challenge to his dismissal.

Mdluli, at the time a financial manager at the company, was part of the Tiger Consortium that lost out on Vodacom’s R7,5-billion empowerment deal in May 2008. The cellphone giant eventually chose Thebe Investments and the Royal Bafokeng as its empowerment partners.

Two insiders who saw the KPMG report told the M&G that no findings of corruption or wrongdoing had been made against Knott-Craig, but questions of “poor judgement” had been raised, on the grounds that he had involved his family in the business.

Mdluli sent a memorandum detailing allegations against Knott-Craig to Vodacom’s shareholders — Reuben September at Telkom and Gavin Darby at Vodafone — on August 18 2008. This was six weeks before Knott-Craig stepped down as chief executive.

Based on Mdluli’s allegations and those of other whistleblowers in the company, the shareholders requested that KPMG conduct an investigation, which resulted in the report.

Mdluli was dismissed from Vodacom on June 27 2008, less than two months before he sent the memorandum to Vodacom’s shareholders.

Vodacom spokesperson Richard Boorman told the M&G that Mdluli was dismissed for “lying under oath and bringing the company into disrepute”. It is not yet clear how the KPMG report is relevant to Mdluli’s case.

Mdluli, who said he had been advised by his lawyers not to speak to the media, was one of the key members of the Tiger Consortium. He told the M&G his allegations against Knott-Craig had nothing to do with the BEE deal and denied being part of the consortium.

When the consortium was not selected as a BEE partner for the deal, it lodged an interdict application to prevent the deal from taking place.

Mdluli was key to this move, drafting the founding affidavit while still a senior manager at Vodacom.

In his Labour Court founding affidavit Mdluli alleges that he was dismissed for exercising his constitutional right to take legal action against Vodacom over the BEE deal dispute.

But Vodacom argues that the relationship between employer and employee had irretrievably broken down and alleges that Mdluli lied in the affidavit.

Knott-Craig, without naming Mdluli, has said that the allegations against him originated with disgruntled Vodacom employees. – Sapa and Mail & Guardian reporters