Telkom slams CEO suspension claims

By Candice Jones for Telkom
Johannesburg, 23 Feb 2009

Telkom has responded to rumours surrounding the possible suspension of CEO Reuben September, saying they are “totally unfounded”.

September's character has been called into question by employees and industry players over the last few months. One such claim has resulted in the company facing legal action by Maredi Telecoms and Broadcasting.

Maredi has accused Telkom of breaching procurement policies by changing tender documents and awarding a multimillion-rand “microwave” tender to Ericsson SA and Telsaf Data.

The equipment is expected to link Telkom's backhaul services to radio towers, which the company says will improve its wireless services.

The equipment is critical for Telkom. The company already leases its backhaul to the mobile providers, and is in the process of extending its wireless services in the form of Do3G. Telkom has also had a long-standing relationship with Ericsson, with the companies' partnerships extending as far back as 1996.

The matter was heard at the Pretoria High Court on Friday, a day after the board ostensibly questioned September. Judgement on the case has been reserved, and the presiding judge did not set a date for the expected ruling.

A win for Maredi could spell trouble for September, since the company is aiming to bring to light the CEO's alleged close relationship with Ericsson's senior management.

He said, she said

Maredi's main argument is that Ericsson's test equipment failed during the tender process, placing question marks over the awarding of the tender to the company.

Ericsson has admitted it had to do the test twice. Telkom has hit back at Maredi's accusations, saying it too did not meet the tender requirements, although it did not stipulate where the company fell short.

Since the awarding of the tender in December last year, Telkom has vehemently denied any wrongdoing on the part of September. The company issued statements saying its decision to award the tender to Ericsson and Telsaf was discussed with the company's executive committee. This was after the recommendation was referred by the company's procurement review council.

“Telkom's tender processes are extremely stringent. In the best interests of the company, the executive committee decided the successful bidder would best be able to provide the technical equipment required,” another statement explained.

Unhappiness all around

The Communications Workers Union has also cried foul; however, reports indicate the union has subsequently been placated. A spokesman for the union was not available at the time of publication to confirm this.

The Telkom board also appears to be unhappy with September, with speculation surrounding last week's board meeting in which the CEO was to be questioned around financial decisions. The same meeting was to see axed chief of operations, Motlatsi Nzeku, present a dossier on September, revealing possible corruption.

Nzeku was fired for opposing the company's plans to restructure. The COO's pink-slip followed Telkom's denial of any axings in its management reshuffle, a process that may have seen Nzeku demoted.

The company also accused Nzeku of defaming Telkom and causing reputational damage. The expected high court judgement in the Maredi case could reveal whether Nzeku's corruption allegations are true.