Black-led investment firm J&J Group, together with an unnamed international telecommunications company, put forward a joint “expression of interest” to buy a controlling stake in Telkom last year, but the deal apparently fell through when Korea’s KT Corp made an offer to purchase a minority, 20% stake in the fixed-line operator.
However, at the end of May, cabinet said it would not vote in favour of the KT deal as proposed, effectively blocking it from taking place. Telkom’s management team has expressed disappointment in cabinet’s decision.
TechCentral has also established that J&J — which was founded in 2000 by businessmen Jayendra Naidoo and Jay Naidoo (a former cabinet minister) — made the offer but had not begun a due diligence on Telkom when the KT offer emerged.
It’s not known which international telecoms operator J&J had partnered with in making its initial expression of interest in buying the controlling stake in Telkom.
It’s believed former communications minister Roy Padayachie had supported the idea of J&J coming on board as part of the KT discussions.
Jayendra Naidoo, J&J’s CEO, could not be reached for comment on his mobile phone on Friday.
If J&J had been successful in its bid, with its partner, to purchase the stake, it seems likely it would have required government to reduce its shareholding. Government holds a direct, 39,8% stake in the fixed-line operator, with the Public Investment Corp, the state pension-fund administrator, controlling a further 10,9%.
TechCentral understands that J&J Group has had no further discussions with Telkom subsequent to cabinet’s decision not to support the KT deal as proposed but has not been able to confirm this.
J&J has a range of investments in the health, infrastructure, technology and financial services industries. According to its website, its “flagship presence” in the IT sector is through Tata Consulting Services (TCS) in SA. TCS is a multinational IT services company headquartered in India.
Meanwhile, TechCentral has learnt that communications minister Dina Pule met with government-nominated representatives of Telkom’s board, as well as chairman Lazarus Zim, on Tuesday to discuss the KT deal. It’s not known why she only met with certain directors or exactly what the outcome of that meeting was.
TechCentral has requested an interview with Pule to discuss the latest developments. — (c) 2012 NewsCentral Media
- Developing story … more to follow