STOCK TAKE | Telkom gets jilted and Markus 2.0

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Telkom gets jilted, but is Rain the better prospect?

Talking away can be hard to do

In the 1991 hit animated film, Beauty and the Beast, which is based on a fairy tale, the protagonist, Belle (a data lover), is offered two choices. Gaston, the most popular man in the village, seems a rather straightforward bet - at least to most of the village. The other, a potential Prince Charming, but notably a potential one, has a somewhat more magical offering, though not completely unreal.

Africa’s most mobile operator, MTN, has decided to rather stop courting Telkom completely, rather than put up with a rival suitor, Rain - seemingly pulling the plug on a coupling that could have potentially given it the status of SA’s most mobile operator too.

MTN (35 million SA subscribers, worth some R230 billion) is seemingly most interested in Telkom’s fibre assets (Telkom has 16.9 million active mobile subscribers, almost 11 million mobile broadband subscribers, over 170 000km of fibre and is worth less than R18 billion).

Rain, which is worth R18 billion, according to its owners, has fewer than 2 million subscribers, and has made clear it's interested in being a "5G powerhouse" indicating it’s not that interested in the fibre. It's basically giving a pitch for Telkom to absorb it, even though it's now worth more … but ultimately, it maintains a tie-up would be transformational.

MTN, which hasn’t said which parts of Telkom it's eyeing, moved first, and it also asked authority figures for permission first as well, unlike Rain, which basically took to social media to say it thinks Telkom could do better. Rain, of course, then did things by the book as well, something very necessary if it ultimately wants to win over Telkom.

But, just like that, MTN this week walked away from talks, after Telkom couldn’t give assurances around exclusivity, but there are also hints that things weren’t moving quickly enough.

MTN wanted these assurances as it had "a pre-agreed process of engaging on the regulatory and public interest matters", and, fair enough, this is likely to be incredibly complex, so why waste time and resources on planning a formal ceremony when there's a good chance Telkom will just elope? Also, Telkom has lots of baggage, both in the form of debt pile, but also its parent is the government. (Telkom's parent has a lot of baggage as well, and seems distracted by winning first place at the upcoming county fair.)

Of course, MTN is not Gaston, it doesn't seem that interested in eggs, nor has it shot anyone with an arrow, and, more importantly, it is not storming the castle irate that Telkom won't just accept it's the best (in Gaston's defence, witchcraft was very clearly involved, but SA's telecommunications sector doesn't have this issue).

Instead, MTN is doing what Gaston probably should have done, if he could. Walk away, play it cool, wait for the music to stop playing and let reality set in, and then make its next move. When that happens, there's a chance that Telkom's only remaining suitor is data only.

Markus 2.0

A curious deal involving his Hermanus mansion has Jooste's fingerprints all over it

Samuel L. Jackson’s character in Pulp Fiction leads a life of hardcore wrongdoing until he chooses redemption. After surviving a freak incident involving an armed teenager with a dicey aim, he decides to renounce his activities, declaring to his partner, played by John Travolta, that he would just "walk the Earth" from now on.

Markus Jooste ain’t no Samuel L. Jackson. The near-collapse of Steinhoff and the near-miracle that he escaped prosecution for almost five years have not been teachable moments, it seems.

Evidence that he may still be involved in deal-making dark arts emerged this week, with confirmation that a trust in the name of Tekkie Town founder Braam van Huyssteen granted Jooste a R75-million bond for his Hermanus home. It’s not clear why that happened. Is Van Huyssteen trying to get first in line if Jooste's estate is liquidated? Or is this some kind of manoeuvre to protect the Hermanus property from the authorities?

What is clear: the move has "Markus Jooste" written all over it.

It is almost impossible to understand how Jooste – who is at the centre of an alleged R100-billion accounting fraud, causing pension fund members and other investors immense financial pain – is still allowed to, apparently, cook up more schemes.

He’s not the only one, of course.

Diamond dealer Louis Liebenberg – back in the news for bankrolling Jacob Zuma’s latest legal crusade - is another example. His Wealth4U venture, which promised investors eye-popping returns from marine diamonds mined off the West Coast, collapsed in liquidation more than a decade ago. This didn’t deter him, he just created a new scheme that recruited new investors. The company’s bank accounts, containing R100 million, have now been provisionally frozen following allegations of money laundering and of him running a Ponzi scheme.

"The path of the righteous man is beset on all sides by the inequities of the selfish and the tyranny of evil men," as Jackson’s character quotes from the Bible in a pivotal scene. It’s a great shame that a distinct lack of "great vengeance and furious anger" from authorities is allowing suspect actors to continue doing their thing – long after the first evidence of inequities.

As Jooste’s day of reckoning seems to get closer, it is probably too much to hope for that he will seek redemption by working with the authorities to speed up the process of justice, which will save taxpayer money on lengthy court cases and give the victims of the Steinhoff fraud faster closure. For now, he continues to walk the Earth - but perhaps on borrowed time.

Quote of the day

"My information from Markus personally is that his advisors have advised him not to speak to the press, but to receive each of the allegations and to answer them at the appropriate time in the appropriate forum. I think he’s as frustrated as we all are."
Rian du Plessis, Markus Jooste's friend and family trust trustee, on The Money Show

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5.8 million

Number of chickens killed by authorities in the Netherlands due to an outbreak of contagious bird flu. All poultry must now be kept indoors to curb the virus. (AFP)

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