Share prices at state-owned telecommunications giant Telkom have taken a knock following its announcement that it suspended the man holding its most senior financial position.
Telkom's share price plummeted by over 3% in the 90 minutes after it released a statement on Thursday morning advising shareholders that it had suspended its chief financial officer, Jacques Schindehütte.
After opening at R28, the share price had dropped to R26.71 before recovering to R27.15 by 12:34pm in Johannesburg on Thursday.
"Shareholders are advised that Mr Jacques Schindehütte, the chief financial officer of Telkom has been suspended by the board of directors of Telkom effective October 24 2013, pending a disciplinary process," said the statement.
It appears that an investigation against Schindehütte has already been conducted following "certain allegations" made against the him. The suspension comes in the wake of findings made by that investigation.
"The board has a duty to investigate and to test the validity of allegations which are brought to its attention through an appropriate process, and will do this fairly, without favour or prejudice," said Telkom in the statement.
'Extraordinary move'
Bruce Whitfield, business show host for Talk Radio 702, observed on Twitter:
The board that suspended Schindehütte comprises several former Absa employees. This includes Leslie Maasdorp, former vice-chair of Absa Capital and a former non-executive director at Absa Group; Susan Botha, a former executive director at Absa Bank; and Louis von Zeuner, former deputy chief group executive of Absa Group.
Schindehütte occupied several senior roles at Transnet for over 10 years before joining banking consortium Absa Group as its chief financial officer in 1999. He was financial director of the Absa group from 2005 to 2010.
Telkom appointed Deon Fredericks to act in Schindehütte's place until the disciplinary process against him is concluded.
Fredericks is currently the deputy chief financial officer at Telkom, a role he has occupied since 2011.
Twitter has been alive with reaction over the suspension. Ellis Mnyandu, editor of the Business Report, tweeted:
CNBCA presenter Gugulethu Mfuphi wrote: