Telkom executive exodus

2010-06-05 15:06

The Telkom ship is experiencing a leadership crisis following the announcement that the group’s captain had had enough – with a number of his lieutenants having already quit.


On Friday Telkom confirmed that chief executive Reuben September would retire when his contract expired in November.


The company also confirmed that head of strategy Naas Fourie, managing director for global operations ­Thami Msimango, group executive for network infrastructure provisioning Marius Mostert, and head of procurement Stafford Augustine had all left at the end of May.


They had taken voluntary retrenchment packages.


In addition, it appears there has been a breach of faith between September and Jeff Molobela, chairperson of the
Telkom board. Molobela was appointed in November by the government, Telkom’s biggest shareholder with a stake of just under 40%.


September apparently resigned ­after the board had ignored his request for an extension of his contract.


In a letter to the board September had apparently accused Molobela of interference and planning to get rid of him.


Telkom said it was unable to comment on speculation over a letter.


The company said the renewal date on September’s contract had ­always been June 1 this year. Neither ­September nor Telkom had chosen to renew the contract and it would therefore expire on November 1 this year.


Attempts to speak to September proved fruitless. But Sake24 did ascertain that it was no secret that he didn’t have a good relationship with either the Telkom board or the Department of Communications.


An individual close to the parties confirmed that there was tension ­between September and Molobela. Dissatisfaction had apparently ­surfaced because Molobela became too involved at the operational level.


Tiyani Rikhotso, spokesperson for the department, also declined to comment on the matter.


Telkom said it would make an announcement when September’s successor was ­appointed. It said there was established leadership in the group which would ensure a smooth transition.


In its statement Telkom praised September for his role in the group since his appointment as chief executive in November 2007.


According to consultancy group Frost & Sullivan, the past two years have been among the most challenging in Telkom’s history.


Telkom went from bad to worse, said Spiwe Chireka, an analyst at Frost & Sullivan. But she also highlighted September’s good decisions, such as getting rid of Telkom’s stake in Vodacom.


Mark Ansley, an analyst with Cadiz Asset Management, said that as chief executive September took significant decisions on group strategy.


He had been part of the unbundling of Vodacom, the acquisition of ­Multi-Links and the plan for cellphone services in South Africa involving an investment of R6?billion.


In Ansley’s view Telkom should now appoint a chief executive with a good business brain rather than make a ­political appointment.


He believes the search for a new chief executive should be spread very wide because there are many candidates who could add significant value to the group.


According to André Wills, an analyst and managing director of Africa Analysis, Telkom is not entirely devoid of leadership and the group has various layers of executives who can keep the company on course.


He said Nombulelo Moholi, managing director of Telkom’s local operations, could be a good candidate to succeed September.


In Telkom’s latest trading statement the group indicated that its business in Nigeria, Multi-Links, would this year suffer losses exceeding those of the previous financial year. Apart from this controversial investment Telkom had launched a media subsidiary, Telkom Media, with great fanfare.


Regarding the latter, the group went as far as acquiring a pay TV licence but then sold it last year.

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