‘PIC to intervene at Telkom’
Telkom is in serious need of a governance turnaround, Public Investment Corporation (Pic) chief executive Elias Masilela said on Friday.
Addressing the Cape Town Press Club, Masilela said he would not place the blame for Telkom's financial woes at any one person or group of individuals' feet, including the government - a major stakeholder in the telecommunications giant.
The Pic, which invests pensioners' money on behalf of primarily the Government Employees Pension Fund (GEPF), owns a 10 percent stake in Telkom.
Masilela said “talking down an asset in public” could do more damage to Telkom. But he said they would definitely step in, as discussions with various parties showed there was extreme concern about Telkom.
“Our engagement has been that it's an important investment for us and 10 percent is not a small amount of money... when our principals, which is the GEPF in this case, looks at the way in which we invest and see a huge stock which is malperforming (sic) they will ask questions,” said Masilela.
The intervention would be “value preserving, or value growing”.
“Because we are very concerned about the bottom line, we will drag people screaming and shouting behind closed doors, and explain to them what investment is about, and how they should manage the asset we have invested in,” he said.
Masilela also spoke about Cabinet's decision to cancel a deal with Korea's KT Corp to buy a 20 percent stake in Telkom.
He said the Pic's initial support of the deal stemmed from the knowledge that Telkom needed a partner that could bring skills and technology to the table.
“When the share price tanked and the KT deal was still considered, because there was new information on the table, we stood up to say we are no longer sure,” said Masilela.
He said they would have given away the asset by asking R36 a share.
Masilela said Telkom's current woes were a “destruction of shareholder value”.
It was not an indictment on certain people or groups.
“It's basically to say we'd like the governance of the entity to change... it's about changing attitudes and the approach to investment going forward, and making sure that in the long term this entity delivers for the country.”
Last week, Telkom's share price sank further when CEO Nombulelo Pinky Moholi and board director Neo Phakama Dongwana resigned.
Their resignations follow the axing of several board members in October. - Sapa