SIU dives back into Telkom

 ·15 Aug 2023

The Special Investigating Unit (SIU) has filed papers to apply for leave to appeal the decision of the High Court of South Africa, Gauteng Division Pretoria, relating to the Unit’s investigation into the affairs of Telkom.

Last month, the High Court ruled that Proclamation R49 of 2022 authorising the SIU to investigate allegations of serious maladministration, malpractice, and possible corruption in the affairs of Telkom was declared unconstitutional, invalid, and of no force or effect.

The High Court found that Telkom is not a state institution and, therefore, the SIU could not investigate allegations of serious maladministration, malpractice, and possible corruption in the affairs of Telkom.

“After consulting with our legal team, the SIU is of the opinion that there is reason for an appeal,” the group said.

“The court needs to give a fuller picture of what constitutes a State institution as this can set a legal precedent on which institutions the SIU can exercise its powers.”

The SIU said it is important that the “state institution” issue be decided and settled.

“If this is not clarified, it may create an unwelcome precedent that some public institutions may inadvertently be shielded from investigation by the SIU,” it said.

The investigation

As reported by MyBroadband, in January 2022, President Cyril Ramaphosa gazetted a proclamation, which allowed the SIU to investigate questionable deals at the partly state-owned entity.

Ramaphosa referred the SIU to investigate Telkom’s 2011 sale of its failed Nigerian operation Multilinks and the sale of iWayAfrica and Africa Online Mauritius in 2013.

Late communications minister Roy Padayachiesaid in July 2011, said that Telkom made a R7 billion loss after acquiring Multi-Links in March 2007.

In July last year, Telkom took the matter to Pretoria High Court, asking for the investigation to be declared unconstitutional and invalid – the case that it won in July.

Telkom argued that the President acted outside his powers as Telkom is not a state institution under the SIU Act, despite its official title, Telkom SA SOC Limited, containing “SOC,” – an acronym for state-owned company.

A breakdown of Telkom’s shareholding by Daily Investor shows that, while Telkom is technically a private company, it is still effectively controlled by the state.

The government owns a direct 40.51% share in the company and the Government Employee Pension Fund owns 15.13%. 

While the GEPF’s investment is separate, it is managed by the Public Investment Corp, which has very close ties to the government and is essentially seen as an investment arm of the state.

In most cases, the PIC votes with the government, giving the government complete control of Telkom, hence its full name being Telkom SA SOC.

Read: SIU vs Telkom battle not over yet

Show comments
Subscribe to our daily newsletter