At the tail-end of last year the Mail & Guardian wrote an article asking the question: is former Vodacom chief executive Alan Knott-Craig a hypocrite?
Knott-Craig had been pretty vocal at the time on solutions for the interconnection debacle, how to fix the regulator and why broadband costs are so high in South Africa.
This angered many in the information, communication and technology sector, who felt that Knott-Craig’s pronouncements were hypocritical, and they accused him of masquerading as a consumer champion.
At the time Knott-Craig dismissed these criticisms, put to him by the M&G, claiming that either his critics were “mischievous” or that they didn’t “properly understand telecommunications”.
Knott-Craig said that now that he no longer worked for Vodacom, he could express his opinions more freely.
To quote Knott-Craig: “In the event that you may have forgotten, when I ran Vodacom, my duty was to my shareholders, and part of that duty was to maximise shareholder value in a responsible manner which they had to approve as shareholders and directors, and I make no apology for that.
“Now that I do not work for them, I may express my opinion more freely from time to time.”
However, it has since emerged that, in fact, he was on a retainer with Vodacom the whole time — a clandestine deal that was hidden from Vodacom’s board members and shareholders.
So while Knott-Craig was making pronouncements about various regulatory aspects of the telecoms sector, which people assumed were his personal views, he was in fact taking home a packet from Vodacom.
Initial reports suggested that Knott-Craig’s consultancy contract with Vodacom was as much as R1-million a month. Vodacom has since clarified this, saying Knott-Craig takes home R10-million over two years.
Regardless of the amount, the fact remains that Knott-Craig was passing himself off as an independent commentator when he still had a business relationship with Vodacom.
When the M&G contacted Knott-Craig this week to get clarity on his earlier response to the newspaper — that Vodacom no longer employed him — he continued to defend his position. Angered by the M&G asking if he had deliberately lied about his current business relationship with Vodacom to make it appear that he was an independent commentator, he said: “I am not an employee of Vodacom in any manner.”
He went on: “I am free to express my opinion as I wish without any censure from Vodacom on any subject, such as interconnect and the regulator as an example, and I do. As such, I am independent and so are my views.”
It is quite clear from Knott-Craig’s defence that he has failed to grasp the fundamentals of the term “conflict of interest”.
With recent media reports raising concerns over nepotism during Knott-Craig’s tenure as Vodacom chief executive, it is even more clear that he struggles to identify what those conflicts are.
Although the Vodacom board cleared Knott-Craig of all wrongdoing regarding the allegations of nepotism, insiders who had seen the now infamous KPMG report said that Knott-Craig had exercised “poor judgment” on the grounds that he had involved his family in the business. These insiders said the level of involvement of Knott-Craig’s family in the business of Vodacom was a cause for concern, even if the former Vodacom chief executive had done nothing illegal.
One insider said the Knott-Craig family’s involvement was “problematic” and the KPMG report did not make “palatable reading”.
“Alan declared these things but people say that, even with a declaration, it is still poor judgment to have your family involved to this extent,” said the insider.
It is clear that Knott-Craig’s relationship with Vodacom is not nearly as independent as he would still have us believe.
The former chief executive has exercised questionable judgment of late on more than one front and, on the face of it, he has answered the M&G‘s question from last year: Alan Knott-Craig is a hypocrite.