Telkom’s suspended CFO: I chose not to resign

Telkom chief financial officer Jacques Schindehütte was offered the opportunity to resign before being suspended on Thursday, but doing so would not have been "congruent" with his "value system".

In an interview with TechCentral shortly after Telkom announced on Thursday that he had been suspended, Schindehütte read a statement in which he said he respected the decision of Telkom's board to institute disciplinary measures against him.

The company has not said what Schindehütte is accused of.

"I am happy to be granted the opportunity to give account of my conduct and take full accountability for all my actions," he said. "I have had the opportunity to resign to avoid a disciplinary process, but this is not congruent with my value system.

"The coming days will be challenging, but I believe I always acted competently and in good faith to enhance the interests of my employer and all its stakeholders."

It's far from clear whether the events are linked, but Schindehütte's suspension comes just weeks after he bought R6-million worth of Telkom shares on the open market.

The move came on top of a R1-million purchase of shares in July.

Access to sensitive information
Telkom notified shareholders on October 2 that Schindehütte had days earlier successfully bought 243 700 of its shares for R24.45/share for a purchase price of R5 959 025.51. The share trade took place on September 30, one day before Telkom entered a closed period during which he would have been prohibited from trading until publication of the company's annual results in November.

Schindehütte's R6-million share purchase came 10 days before Telkom published a trading statement that sent its share price rallying higher. The share touched a fresh 52-week high of R28.65 on October 18 and has more than doubled in the past six months.

Schindehütte declined to comment on the share trade beyond saying that he would not have traded if he believed he had access to sensitive information about Telkom that had not already been shared with the market.

"My trade on the 30th [September], as is company policy, [was] approved by the chief executive and the chairperson," he told TechCentral. "They have to apply their minds as to whether they or I have market-sensitive information."

Meanwhile, Telkom's share price fell sharply on Thursday after it suspended Schindehütte. It traded as low as R26.71, or more than 5% lower than Thursday's opening price, at one stage.

Telkom said on Thursday that its board was "recently made aware of certain allegations" against its chief financial officer and "appointed an independent law firm to investigate them".

"The results of the investigation were presented to the board, and the board took professional advice about the correct way to deal with the report," it said. "The board was advised to suspend Mr Schindehütte, pending a disciplinary hearing."

'Uphold all governance requirements'
On Thursday, Telkom group chief executive Sipho Maseko said: "The board of directors is determined to act responsibly and to uphold all governance requirements. We have a duty to investigate and to test the validity of allegations, which are brought to our attention through an appropriate process. We will do this fairly, without favour or prejudice.

"The board and the company will ensure that the correct procedures will be implemented to manage this matter in a fair manner," said Maseko. "All our stakeholders will be informed of the outcome of the disciplinary hearing once the matter is concluded. Until then, the company is not in a position to provide more information."

Tekom's deputy chief financial officer Deon Fredericks has been appointed as acting chief financial officer "to ensure there is continuity in the financial management function". – 2013 NewsCentral Media

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