Telkom wins court case against Pres. Cyril Ramaphosa

The Pretoria High Court has set aside a Presidential Proclamation, which gave the Special Investigation Unit (SIU) authority to investigate questionable deals at Telkom. In January 2022, President Cyril Ramaphosa gazetted a proclamation, which allowed the SIU to investigate questionable deals at Telkom, a partly state-owned entity.

Ramaphosa referred the SIU to investigate Telkom’s 2011 sale of its failed Nigerian operation Multilinks and the sale of iWayAfrica and Africa Online Mauritius in 2013. Late communications minister Roy Padayachiesaid in July 2011, said that Telkom made a R7 billion loss after acquiring Multi-Links in March 2007.

In July last year, Telkom took the matter to Pretoria High Court, asking for the investigation to be declared unconstitutional and invalid. Telkom argued that the President acted outside his powers as Telkom is not a state institution under the SIU Act, despite its official title, Telkom SA SOC Limited, containing “SOC,” – an acronym for a state-owned company.

One year later, the Pretoria High Court declared the proclamation unconstitutional, invalid, and of no force or effect. It also awarded costs to Telkom. Telkom said it has taken the appropriate remedial action following its previous investigations into issues raised in the proclamation, such as launching appropriate legal proceedings where necessary.

Telkom remains committed to following robust corporate governance principles and will continue to uphold these principles.

Telkom Group

Telkom struggles

The news follows a difficult period for the company, with its recently announced financial results for the financial year leaving much to be desired. In its summarised consolidated statement of profit and loss, the group said that profits declined from R2.6 billion in FY22 to R346 million in FY23.

That said, the group said that certain financial information contained in the results constituted pro forma financial information based on assumptions on future performance and hypothetical data.

It noted that the pro forma adjustments for FY23 included the impact of impairment of R13.071 billion and the related tax impact of R3.47 billion, which limited costs of R1.065 billion and the related tax impact of R288 million, and the R10.479 billion. invested capital write-up of BCX and Gyro.

When this is all taken into account, the group said that it suffered a loss of R9.97 billion, with it not declaring a dividend for the third year in a row.