South Africa’s Telkom SA said on Monday it loaned its suspended chief financial officer R6 million ($590,000) to buy its shares, which could be illegal.<\/p>\n
“Telkom’s management has recognised that the loan made to such an executive may not have been in compliance with the provisions of the companies act,” the company said in a statement.<\/p>\n
The fixed-line operator suspended Jacques Schindehutte last month pending its disciplinary process over allegations against him. It has said that the suspension was related to personal misconduct, not insider trading.<\/p>\n
Telkom, which also reported a sharp rise in first-half earnings on Monday, said that its loan to Schindehutte was interest-free.<\/p>\n
Schindehutte bought Telkom shares worth nearly 6 million rand on Sept. 30, regulatory filings show.<\/p>\n
The company did not say when it expected its disciplinary process against Schindehutte to be completed.<\/p>\n
Telkom on Monday reported diluted headline earnings of 649.8 cents a share for the six months to Sept. 30, from a restated 24.9 cents a year earlier.<\/p>\n
The higher earnings were largely because of an accounting gain related to its liability for health insurance for retired employees, it said.<\/p>\n
Excluding that gain, headline earnings per share increased to 224.2 cents, it said. It did not give an equivalent number for diluted headline earnings per share.<\/p>\n
Headline EPS, the main measure of profit in South Africa, excludes certain one-off items. ($1 = 10.1690 South African rand)<\/p>\n
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