Resignation comes after the completion of first of two forensic reports on allegations of corruption and fraud involving security companies
The resignation of Telkom’s chief finance officer, Peter Nelson, may have grabbed the headlines and rocked the company’s share price this week, but it wasn’t the only resignation at the fixed-line operator.
A Telkom staffer fingered in the investigation into alleged fraud and corruption by the firm’s copper-cable security contractors has resigned shortly after a forensic investigation was completed.
The company announced this week that Nelson had resigned following the departure of chief executive Reuben September, who left four months before his term was up.
September, who has been replaced by Jeffrey Hedberg in an acting capacity, was in conflict with Telkom’s board, particularly chairperson Jeff Molobela, whom he accused of acting as an executive chairperson.
The exit of September and Nelson has intensified Telkom’s leadership woes. Four other senior executives resigned in the past few months.
The Mail & Guardian reported in May that an internal Telkom report had fingered three senior staffers for alleged corruption and fraud. They were accused of colluding with security contractors to defraud Telkom and the report recommended that criminal charges be laid against them. The staffer who resigned was one of them.
Telkom confirmed this week that one of two investigations into the fraud and corruption allegations had been completed by Fundudzi Forensic Services and had been handed to Telkom. It said it was considering the report’s recommendations and would take the necessary action.
Telkom said that the staffer, whose name is know to the M&G, had resigned for personal reasons and that, as far as Telkom was aware, his resignation was not linked to the investigation.
“Should any of the reports recommend criminal actions against any employee based on evidence, the company will take the necessary action irrespective of whether the individuals are still in its employ or have resigned from the company,” a Telkom spokesperson said.
Telkom said the completed investigation was in regard to allegations made against FBI Security Services. The investigation into allegations against Radio Surveillance Security Services (RSSS) was likely to be completed by mid-August.
“At this stage Telkom has no intention of making the report public until such time as the necessary processes based on the recommendations have been exhausted and the rights of individuals not compromised,” said the spokesperson.
The internal Telkom investigation, which the M&G reported on in May, queried why payments to security companies monitoring Telkom’s cable network rose by between 42% and 125% between the 2008 and 2009 financial years. Telkom now spends R18-million a month on these companies.
The report also queried the R6,6-million that Telkom pays RSSS for copper-cable alarm systems designed to detect attempted theft. It claimed that Telkom had no supporting documentation for 593 alarms for which RSSS has charged it and another 877 alarms were mostly redundant and not installed in the right places.
The M&G has also established that Telkom pays RSSS the R6,6-million a month to monitor the copper-cable alarm system, when it bought the system outright three years ago for R180-million and should be monitoring it itself.
Telkom sources allege that FBI Security Services CC, later FBI Security Services (Pty) Ltd, was paid more than R22-million between August 2009 and March this year for doing nothing.
Telkom’s security contractors have denied wrongdoing and RSSS has said all its alarms are in place and all its invoices accounted for.