Mystery around Telkom CFO suspension

Shares in Telkom fell 4% in afternoon trade on Thursday (24 October) after the group suspended its chief financial officer, Jacques Schindehütte, pending a disciplinary process.

Speculation for the suspension pointed to a share purchase by Schindehütte on 30 September, amounting to R5.96 million at R24.45 rand a share.

Telkom announced the dealing on 2 October, noting that “clearance has been obtained in respect of these dealings in securities on the open market.”

Telkom then put out a trading statement on 8 October advising that headline earnings per share and basic earnings per share for the six months ended 30 September 2013 were anticipated to to be at least 20% higher than those of the prior comparable period.

In July, the group CFO also purchased 55,520 shares at an average price of R18.07 at a cost of R994,340.

Schindehütte was not available for comment on Thursday.

Bloomberg reported that  Schindehutte’s trade has been referred to South Africa’s Financial Services Board’s Department of Market Abuse by the Johannesburg Stock Exchange.

Telkom statement

“The board was recently made aware of certain allegations and appointed an independent law firm to investigate them. The results of the investigation were presented to the board, and the board took professional advice about the correct way to deal with the report,” Telkom said in a statement.

The board was advised to suspend Schindehütte, pending a disciplinary hearing.

“The board of directors is determined to act responsibly and to uphold all governance requirements,” said Telkom Group CEO Sipho Maseko.

“We have a duty to investigate and to test the validity of allegations which are brought to our attention through an appropriate process. We will do this fairly, without favour or prejudice.”

“The board and the company will ensure that the correct procedures will be implemented to manage this matter in a fair manner.

“All our stakeholders will be informed of the outcome of the disciplinary hearing once the matter is concluded. Until then, the company is not in a position to provide more information,” said Maseko.

Telkom has appointed its deputy chief financial officer, Deon Fredericks, as acting chief financial officer to ensure there is continuity in the financial management function.

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Mystery around Telkom CFO suspension