The Pretoria High Court has overturned President Cyril Ramaphosa’s proclamation from last year, which gave the Special Investigative Unit (SIU) jurisdiction to investigate Telkom.
Telkom said in a statement on Thursday that it went to court because it believes that if the proclamation goes unchallenged, it will create a dangerous precedent on the role of the state in private sector.
“The allegations in the proclamation have already been addressed by Telkom through its corporate governance processes, and the results are public record,” Telkom CEO Serame Taukobong stated.
Judge J Thlapi determined that the declaration was unlawful, null, and void.
On January 25, 2022, Ramaphosa issued the mandate, directing the SIU to examine charges of maladministration and malfeasance at Telkom.
The president submitted many questionable transactions to the anti-corruption agency, including Telkom’s 2011 sale of its Nigerian Multi-Links division and 2013 sale of iWayAfrica and Africa Online Mauritius.
In July 2011, late communications minister Roy Padayachie disclosed that Telkom lost R7 billion on Multi-Links after acquiring the company in March 2007.
Ramaphosa also asked the SIU to look into allegations of illegal, irregular, or pointless and wasteful telex and telegram expenditure.
The SIU was also tasked with looking into contracts for consulting services related to Telkom’s broadband and mobile strategies.
These advisory services could refer to the billions of Rands Telkom has allegedly spent on consultants over the years, including an R200 million contract with consulting company Bain & Company and a separate contract with consulting firm A.T. Kearney.
When asked about these contracts at the time, Telkom defended them, claiming that it obtained good value for money.
Phutuma Networks executive chair and founder Edward Scott, according to Telkom, was the basis for the SIU’s proposal to Ramaphosa that it probe problems extending back 15 years.
Ramaphosa authorized the SIU to investigate the dispute between Phutuma Networks and Telkom, which dates back to at least 2009.
Telkom earlier stated that it had conducted its own investigation, which had shown suspected instances of wrongdoing by two workers involved in one of these transactions.
Telkom stated that it was declared in accordance with the Prevention and Combating of Corrupt Activities Act.
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