Telkom sues Ramaphosa to stop investigating shady deals

Telkom has filed a multi-part application with the Pretoria High Court demanding that President Cyril Ramaphosa’s order to investigate suspicious transactions at the company be declared unconstitutional and void.

Court documents call for an interdict barring the Special Investigation Unit (SIU) from continuing to investigate and an order to quash the Ramaphosa proclamation.

Ramaphosa issued the directive on January 25, 2022. order the SIU to investigate allegations of maladministration and misconduct at Telkom.

The president reported several questionable transactions to the anti-corruption body, including Telkom’s sale of its Multi-Links unit in Nigeria in 2011 and order iWayAfrica and Africa Online Mauritius in 2013.

The late Communications Minister Roy Padayachi reported in July 2011 that Telkom lost 7 billion rand on Multi-Links after she first acquired the business in March 2007.

It also instructed the SIU to investigate allegations of unauthorized, irregular or fruitless and wasteful spending related to telex and telegram services.

The SIU should also investigate contracts related to consulting services regarding Telkom’s broadband and mobile strategy.

These advisory services may relate to billions reportedly spent by Telkom on consultants over the years, including R200 million contract with Bain & Companyand a separate agreement consulting firm A.T. Kearney.

When Telkom was asked about these contracts at the time, they came out on the defensive, stating that they recouped the money invested.

Serame Taukobong
Serame Taukobong, CEO of Telkom

In court documents seen by MyBroadband, Telkom alleges that Ramaphosa acted outside of his authority because Telkom is not a government agency under the SIU Act.

Telkom says it does not use government money and does not control government assets or property.

The government has power over the company, so its official name is Telkom SA SOC Limited and “SOC” is an acronym for “state-owned company”.

South African government owns 40.5% of Telkomand another 14.8% is owned by the State Investment Corporation (PIK), which is closely associated with it.

Telkom also alleges that Ramaphosa did not provide the necessary information required by the SIU Law.

It also says the president violated the Administrative Justice Promotion Act by not giving the company an opportunity to state its point of view prior to the publication of the proclamation.

Telkom blamed the situation on Phutuma Networks Executive Chairman and Founder Edward Scott.

It stated that Scott was the catalyst for the SIU’s recommendation to Ramaphosa that Telkom be investigated in cases spanning 15 years.

Battle between Phutuma Networks and Telkom dating back to at least 2009 and includes the telegraphic services (telex and telegram), which Ramaphosa commissioned the SIU to investigate.

Telecom previously said that it conducted its own investigation, which identified possible wrongdoing by two employees in one of those transactions.

This was declared in accordance with the Law on Prevention and Combating Corruption, Telkom reports.

“Telkom has filed a civil suit against an employee seeking $5 million in damages related to actions related to the transaction,” the company added.

“Because the case is both criminal and civil, Telkom will consider the case on the merits in the appropriate forum in an appropriate manner and at the appropriate time.”

MyBroadband has contacted Telkom and Scott for comment. Scott did not respond at time of publication and Telkom cited its court documents.

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