Communications minister Roy Padayachie has assured the JSE that it will not seek any special rights over Telkom that are in violation of the bourse’s rules and regulations.
JSE CEO Russell Loubser tells TechCentral that the minister met with the JSE recently and promised that government respected its listing rules and that any special rights it sought would have to get buy-in from shareholders.
For the past eight years, government has held a “golden share” in Telkom — the “class-A” share — that has entitled to a number of special rights over ordinary shareholders, including the right to appoint the chairman of the board.
Government pension fund investment company, the PIC, has also enjoyed certain rights under a “class-B” share it inherited when it bought a portion of the equity held by Telkom’s foreign equity partner Thintana. Thintana sold its 30% stake in Telkom in two tranches in the middle of last decade.
The special shares expire on Saturday, 5 March, eight years after Telkom listed on the JSE.
“It was a very good meeting,” says Loubser of the discussion with Padayachie, “but we were absolutely adamant that the golden shares lapse on 5 March.”
Loubser says Padayachie “understood our viewpoint that all companies must be treated the same. We don’t allow special rights to be attained by certain shares. The minister has undertaken to work in terms of our listing requirements and hasn’t asked us to bend any [rules].”
Loubser says if government wants to entrench certain rights in Telkom’s articles of association — effectively the constitution of the company — it can put these to a shareholders’ vote. Depending on the nature of the rights being sought, either 50% or 75% shareholder approval will be required.
Government directly holds 39,8% of Telkom and the PIC holds a further 8,3%, meaning government’s direct and indirect shareholding amounts to 48,1% of the telecommunications group’s equity. — Duncan McLeod, TechCentral