Turning a blind eye

Reuben September, Telkom’s embattled chief executive, isn’t just under pressure over dismal financial results and a growing slate of legal disputes, he is said to have turned a blind eye to dodgy practices surrounding key security contracts.

Court papers show that September ignored a tip-off more than two years ago from a Telkom employee about irregularities in its contracts with copper security contractors.

The Mail & Guardian has copies of emails between a Telkom copper cable investigator, Schalk Brits, and September’s office. The emails were included in papers filed in the Cape Town labour court by Brits, who is challenging his dismissal by Telkom.

A Telkom insider who asked to remain anonymous said that he, too, raised irregularities in Telkom’s procurement department with September, who disregarded his warning.

But Telkom has denied that September ignored the request for a meeting with Brits and said it would not comment on unsubstantiated claims by the Telkom insider.

Last month the M&G reported that an internal Telkom investigation fingered three senior staffers for colluding with security companies hired to protect and monitor Telkom’s copper network. And in 2001 the M&G reported allegations that two of these companies, Royal Security and Radio Surveillance Security Services, had allegedly been involved in corrupt transactions involving a senior Telkom employee.

Royal Security is owned and run by Roy Moodley, a friend of President Jacob Zuma. He was arrested last year for allegedly bribing a state official to give him a better seat at Zuma’s inauguration.

All Telkom’s security contractors have denied any wrongdoing.

The internal Telkom report was handed to Pinky Moholi, Telkom South Africa managing director, and Anton Klopper, group executive of legal services, on December 9 last year. It urges that criminal charges be laid against the three staff members.

Telkom sources said that Telkom has sat on the report since December, but the company denied this. It claimed that it appointed an independent forensic company to investigate it in March and that the investigation was still under way.

Telkom has been swamped by allegations of rigged tender procedures lately and many, in the form of lawsuits totalling billions of rands, are coming back to bite Telkom.

Bihati Solutions has already filed a R1,7-billion legal challenge against Telkom regarding a network services tender that it says it won but Telkom did not follow through. Telkom could also face legal challenges from the other five bidders.

The awarding of a microwave point-to-point tender has also been disputed and could result in legal action.

Brits, employed in the Western Cape, wrote to September on March 13 2008 requesting a meeting about copper cable security contractors in the region. He alleged that one contractor, Sidas Security, owed Telkom R230 000 for services that it had failed to render and that Telkom’s procurement department would not assist in recovering the money from Sidas. Brits also referred to other “irregularities” that cost Telkom millions of rands a month.

He requested a one-on-one meeting with September and, when the Telkom boss indicated that costs were an obstacle, Brits offered, via email, to pay for his journey from Cape Town to Pretoria. September’s office then allegedly requested a phone conversation. In his last email, on April 2 2008, Brits said he was frustrated and would take up the issues with his union.

Telkom responded that September had tried to fit a face-to-face meeting into his pressured schedule. When it became apparent that this was not possible, he requested a phone conversation to determine who should be involved in further discussions and what the process should be.

“It was, in fact, Mr Brits who refused the opportunity to talk telephonically with the GCEO [group chief executive officer] and chose to pursue another route via SACU [South African Communications Union],” said Telkom.

It said September referred the matter for investigation, and the conclusion was that “the relevant line-reporting structures should address the concerns raised by Brits as these were largely operational”.

Telkom also said September had a record of ensuring that such allegations were thoroughly investigated. It said Brits was dismissed for interfering with the investigation and he had referred the matter to the Commission for Conciliation, Mediation and Arbitration but the dismissal was upheld.

The M&G also has a report from cable investigators that accuses Sidas Security of rendering an “unacceptable” armed response service, resulting in major losses from cable theft. The report alleges that Sidas was operating with shortages of firearms, night-vision equipment and no vehicle tracking and first aid equipment, even though these items were included in its initial costing.

The report was sent to Telkom’s procurement department, but no action seems to have been taken.

Sidas Security failed to respond to questions.