CEO adds to exodus from S.Africa's Telkom

Mon Nov 5, 2012 12:05pm GMT
 

By Helen Nyambura-Mwaura and Tiisetso Motsoeneng

JOHANNESBURG (Reuters) - South Africa's biggest fixed-line phone company Telkom SA lost its fifth chief executive in seven years on Monday, less than a month after the departure of its chairman and several directors.

The future of the state-controlled telecom, whose shares are down 40 percent this year, has been thrown into doubt by tentative government plans to renationalise and force it to push through a costly expansion of rural internet access.

The government in June also rejected a $385 million bid for 20 percent of the company from South Korean group KT Corp.

Telkom, the bigggest fixed-line operator in Africa, said that Chief Executive Nombulelo Moholi had given her six months notice, meaning she will depart in May, about a year before her contract was due to expire.

The government - which owns a near 40 percent stake and a further 10.5 percent through the state pension fund - has discussed ways to finance a buy-out and its communications minister is due to present a report on the company's future to cabinet.

"Telkom is quite a key asset for government. Since the failure of the KT Corp deal, things started not to look great for Telkom," said one analyst who did not want to be named.

"Based on that, and the strained relationship with the government, maybe she (Moholi) decided to just step down."

Telkom's chairman and several board members also departed following an annual general meeting last month.   Continued...

People walk past telephone booths in the streets of Kenya's capital Nairobi, September 12, 2006. REUTERS/Antony Njuguna

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