Shares in Telkom declined 56 cents or 3.08% to R17.64 on the JSE, with Telkom’s share price down as much as 40% for the year, compounded by a cabinet block of a merger with Korea firm KT Corp, and rumours of nationalisation.
“The PIC has noted the resignation of Telkom’s CEO Nombulelo Pinky Moholi with regret as we would have liked to see some stability at the executive level,” the group said in a statement to BusinessTech.
“We acknowledge that Mrs Moholi had been around for a relatively short period of time and was faced with various inherited challenges, some of which will only be resolved once an appropriate strategy and correct structures are in place.”
Government holds a 39.8% shareholding in Telkom, with the PIC owning another 10.9%.
The investment group said it was yet to establish the reasons for Moholi’s resignation.
“However, it is critical that we establish stability at the executive and board levels, as the entity has been losing value over an extended period of time. It is further important to turn the entity around as soon as possible, and we believe the starting point is sorting out governance issues,” PIC said.
Telkom’s fate is still in the hands of cabinet after the Department of Communications handed over its proposed options for the group.
Having blocked a deal between Telkom and Korea-based KT Corp in June, Cabinet asked communications minister, Dina Pule to report back to it about all the options that were available for Telkom, in three months.
That deadline passed at the end of August, before the DoC said it had finally presented its list of options to cabinet in mid-September.
Pule issued out a statement following the conclusion of Telkom’s AGM late last month.
“In the wake of the outcomes of the AGM, we are now focused on enhancing and protecting Telkom’s share value whilst balancing that with the objectives of providing affordable connectivity to all South Africans. This will be done through appropriate shareholder management input.”
The minister added that the DoC also expected Cabinet to “pronounce” on the options that are available to find a lasting and sustainable solution for Telkom’s turnaround.
“That solution must be underpinned by the creation of a balance between contributing to delivering the socioeconomic development objectives of this country whilst simultaneously facilitating a fruitful and commercially viable existence of Telkom.
“The rest of that strategy, which pertains to broadband rollout and possible partners for fixed line and mobile telephony will be spoken to by March 2013,” the minister said.