It has emerged that suspended Telkom chief financial officer Jacques Schindehütte was granted an interest-free R6m loan by the telecommunications operator to allow him to buy shares in the company. But Telkom is now concerned the loan may have been in breach of the Companies Act.
Details of the loan agreement are published alongside Telkom’s interim financial results for the six months to end-September 2013. They show that Telkom agreed to provide a loan of R5 997 775,43 to Schindehütte to “assist him to acquire shares” in the company.
However, it said the loan “may not have been in compliance with the provisions of the Companies Act” and that it would “as a matter of urgency take the matter under advisement from its advisers for rectification and/or recovery of the amount, should that be necessary”.
Schindehütte told TechCentral on Monday that both the loan agreement and a subsequent purchase of R6m worth of Telkom shares on 30 September had the approval of both Telkom chairman Jabu Mabuza and CEO Sipho Maseko. He said neither the loan, nor the share purchase, were in any way related to his suspension.
Telkom said on Monday that Schindehütte agreed he would provide as security for the loan all the shares he acquired and would not sell them until the debt had been repaid fully.
“The loan is repayable on termination of employment contract by any of the following reasons: retirement, resignation, dismissal, abscondment or medical disability. In the event of these reasons materialising, the loan shall bear interest at the prime rate plus 2% per annum, calculated from the date of demand to the actual repayment, compounded monthly in arrears.”
Telkom has not said why it suspended Schindehütte, beyond saying that it relates to allegations of “personal misconduct” levelled through a whistle-blower.
That didn’t stop speculation about Schindehutte’s R6m share trade, which came just one day before Telkom went into a closed period ahead of publication of its interim results. The trade took place 10 days before Telkom issued a trading update that led to a sharp rise in the value of its shares.
Schindehütte told TechCentral last month that he had the approval of both Maseko and Mabuza to buy the shares and also would not have traded if he believed he had access to market-sensitive information that had not been disclosed. He also said that he had been given the opportunity to resign, but had declined to do so as that would not have been congruent with his “value system”.
On Monday, Telkom said its board had a “duty to investigate and to test the validity of allegations, which are brought to its attention through an appropriate process, and will do this fairly, without favour or prejudice”. — (c) 2013 NewsCentral Media
