Telkom tackles Blue Label for R5.21 billion
Telkom has issued a summons against Blue Label Telecoms and 5 other parties looking to claim R5.21 billion in damages relating to the Multi-Links fiasco.
Telkom has issued the claim against Blue Label Telecoms, subsidiaries of Blue Label Telecoms and individuals, including a former senior executive of Telkom, seeking US$528,071,116 (R5.21 billion).
The claim relates to damages suffered by Telkom arising out of a super dealer agreement (SDA) concluded between Blue Label subsidiart, Africa Prepaid Services and Multi-Links.
“The damages claim is based, inter alia, on a breach of a duty of care and misrepresentations made by Blue Label at the time that the SDA was concluded with Multi-Links,” Telkom said in its latest financial report.
Telkom is claiming US$6 million from an unnamed former executive for irregularities relating to the deal.
“The claim against the former senior executive of Telkom is based on a breach of his fiduciary duty owed to Telkom and Multi-Links. Multi-Links is also claiming several million US Dollars for damages suffered.”
Telkom lost over R10 billion over 50 months on its disastrous acquisition of Multi-Links, and it was forced to write off billions before cutting losses in a fire sale to an affiliate of Helios in 2011.
By the time it had sold the unit for just US$10 million, it had cost the group the equivalent of half of its market capitalisation at the time.
Telkom is also claiming an amount of US$20.5 million from Multi-Links in respect of amounts due by the company to Telkom with regards to the provision of resources, legal costs and an interest-free loan.
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