Telkom battles state-owned status

Telkom is currently listed as a state-owned company (SOC) on its revamped website, but the group says it is in discussion with the Department of Finance and Treasury to change its status, given the fact that it is listed as a public company on the JSE.

Government is Telkom’s largest shareholder with a 39.8% stake, while state-owned financial services firm, Public Investment Corporation owns 10.9% in the telecommunications group.

However, despite a majority of state ownership, Telkom listed on the JSE in 2003.

On Telkom’s website, which according to a Telkom spokesperson is in transition, the company is listed as ‘Telkom SA SOC Limited’.

By way of explanation of its title status, the group sent through the following statement:

The new Companies Act (The Act) came into operation on 1 May 2011. This Act requires all State-Owned Companies to include the expression “SOC Ltd”.

The Companies Act defines a State-Owned Company as:

An enterprise that is registered as a company.
An enterprise that is listed as a public entity in either schedule 2 or 3 of the Public Finance Management Act (PFMA).

“Telkom is listed as a ‘major public entity’ in schedule 2 of the PFMA and is, in terms of the Companies Act, therefore regarded as a State-Owned Company.”

“Telkom has entered into discussion with the Department of Finance: Treasury in an effort to remove its name from schedule 2 of the PFMA since Telkom is listed as a public company on the JSE,” the spokesperson said.

“However, in the interim the expression ‘SOC Ltd’ applies to Telkom.”

Analysts have expressed concern over government’s increasing role in the running of Telkom in recent months.

Earlier this year, government, through Cabinet blocked a deal between Telkom, and Korea telecoms firm, KT Corp.

Earlier this month, Telkom chief executive officer, Nombulelo Moholi announced her decision to step down from the company, amid rumours of a rift between her and government.

Government is also due to announce the options that are available to find a lasting and sustainable solution for Telkom’s turnaround, in March next year.

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Telkom battles state-owned status