Telkom South Africa has confirmed that the confidential disciplinary hearing involving the Company’s CFO, Mr Jacques Schindehütte, on a matter of personal misconduct is scheduled to commence in Johannesburg today.
This disciplinary hearing is the outcome of a process that began last year, when Telkom received certain allegations regarding the conduct of Mr Schindehütte. He was suspended in October 2013 pending a disciplinary process.
The allegations relate to a loan of over R6 million granted by the mobile operator to its former CFO, which, it has been reported, could be in contravention of the Companies Act, which would render the transaction null and void.
Telkom then moved to dispel rumour over the possibility of a connection between the suspension and the purchase of shares by Schindehütte at the end of September 2013.
On 14 January, Telkom SA said in a statement, “The loan to Telkom’s CFO, Mr Jacques Schindehütte, was granted in a manner that was inconsistent with the provisions of the Companies Act, making the transaction null and void. The board cannot and did not ratify the granting of the loan. Telkom therefore has an obligation to claim the loan back in order to rectify the situation.
By virtue of his position as CFO of Telkom, Mr Schindehütte has oversight responsibility for compliance and corporate governance, including for the regulatory and / or administrative processes relating to the provision of loans to directors at Telkom.
He was actively involved in the processing of this loan and personally oversaw the advancement of the payment of the loan amount to himself.
As a director of the Company, and having now been advised that the loan was void, the CFO has a fiduciary duty to repay the loan to the company. We are confident that Mr Schindehütte will act in the best interests of the Company and repay the loan.”
Following the receipt of the allegations, the Board of Directors tasked an independent legal firm to investigate the allegations.
A report was completed and presented to the Board by the law firm. The Board considered the report, applied its mind and took professional advice. In October last year the Board determined that the fairest way forward was to provide Mr Schindehütte the opportunity to defend himself in a disciplinary hearing.
A further statement by Telkom to the media read “all parties to the confidential disciplinary hearing are constrained from discussing the matter outside the hearing itself or commenting on its content to third parties. Telkom respects this process and is therefore not in a position to comment on any details related to the matter until the outcome is decided.”
The outcome of the hearing will also follow the prescribed Board processes, before being communicated publicly. The Company reiterated its commitment to communicating the outcome once all required legal and governance processes have been followed.