Public reprimand for Telkom CEO: report
An instruction by a state body for Telkom CEO, Sipho Maseko, to attend a corporate governance and a director duties course “is effectively a public reprimand” according to a Bloomberg report.
Maseko faces referral to South Africa’s national prosecutor or a fine of up to one million
rand, if he fails to attend the course, Bloomberg said, citing the Companies and Intellectual Property Commission (CIPC).
Telkom said in February that it received a compliance notice from the CIPC relating to its interest free loan granted to suspended chief financial officer, Jacques Schindehütte.
Schindehutte was granted a loan of $538,000 by Telkom in September 2013, to buy shares in the group.
He has since returned the money, after the company admitted that the loan “was granted in a manner that was inconsistent with the provisions of the Companies Act, making the transaction null and void”.
In a statement on SENS on 24 February, Telkom advised that the CIPC notified the group that it believes that the Telkom contravened Sections 44 and 45 of the Companies Act No. 71 of 2008 “as the payment of the Loan was authorised prematurely and prior to the board of directors of Telkom passing the necessary precursory financial assistance resolutions”.
The compliance notice required Maseko “to attend a corporate governance and a director duties course within 90 business days from the date of the compliance notice (10 February)”.
Maseko could face an administrative fine or referral to the National Prosecuting Authority
for criminal prosecution if he fails to attend the course, CIPC head Astrid Ludin told Bloomberg.
“Should the CEO not comply with the Compliance Notice, the Act allows for the CIPC to either apply to a court for the imposition of an administrative fine or refer the matter to the National Prosecuting Authority for prosecution,” Ludin said.
“The CIPC’s instruction regarding Maseko’s requirement to attend a course is effectively a public reprimand,” said Kate Turner-Smith, a Cape Town-based analyst for BPI Capital Africa.
The Sunday Times reported in March that Maseko hit back at the CIPC which questioned his ability to head a listed company.
Maseko said: “It was [probably] some small-time bureaucrat trying to shake his weight around. It’s a very bad compliance notice. It was badly arrived at. It’s procedurally unsound.”
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