Telkom shares dip on CFO suspension
The fixed-line operator has launched a probe into allegations against CFO Jacques Schindehütte.
JOHANNESBURG - An investigation has been launched following the suspension of Telkom Chief Financial Officer (CFO) Jacques Schindehütte.
Shares fell more than three percent as investors worried the suspension could be a setback to Chief Executive Officer (CEO) Sipho Maseko's plans to turn around the ailing company.
"The board was recently made aware of certain allegations and appointed an independent law firm to investigate them. The results of the investigation were presented to the board, and it took professional advice about the correct way to deal with the report," Telkom said in a statement.
"We have a duty to investigate and to test the validity of allegations which are brought to our attention through an appropriate process. We will do this fairly, without favour or prejudice," the statement quoted Maseko as saying.
Schindehütte was suspended as of Thursday, the company said, adding Deon Fredericks will serve as acting CFO until a disciplinary process is finished.
It did not give any details about the allegations or the investigation.
Telkom's profits have been falling for years owing to stiff competition from mobile operators MTN Group and Vodacom, which it previously owned.
It has also been hurt by the failure of an expensive attempt to expand into Nigeria, and by a rapid turnover of chief executives.
Maseko however, the sixth CEO since 2005, appears to be convincing investors Telkom is getting back on track: its shares have more than doubled over the last six months and it expects a 20 percent increase in first-half earnings.
The CFO of MTN, Africa's largest mobile operator, resigned in July due to an investigation into allegations against him. MTN has said the allegations against Nazir Patel have to do with governance and would not impact its financial results.
Tech Central's Duncan McLeod says he spoke to Schindehütte about the circumstances leading to the suspension.
"He's not saying very much at the moment except that he was given the opportunity to resign. He declined to do so and chose to be suspended instead, saying, 'resigning would not be congruent with my value system.'"