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Telkom Reviews Complaint About Senior Executive Appointments

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Jan. 21 (Bloomberg) -- Telkom SA SOC Ltd., Africa’s largest fixed-line operator, is reviewing a letter of complaint that it received from a group of unidentified people, who said they are employees. The grievances focus on the hiring of company executives and the alleged misuse of funds.

“The company notes the contents of the letter and is dealing with the matter in accordance with its whistleblowing policy and process,” Telkom said in an e-mailed response to questions yesterday. “As such, Telkom is unable to respond to queries that relate to matters contained in the letter of complaint whilst these processes are underway.”

The letter, addressed to Company Secretary Xoliswa Makasi and seen by Bloomberg News, asks the Pretoria-based company to act on a series of allegations. It’s signed by “The Group of 6 Telkom Whistle-blowers/employees.”

Telkom, which is 40-percent-owned by South Africa’s government, is struggling to revive revenue in a country that has leapfrogged fixed-line technology in favor of smartphone devices that are driving a boom in data usage across Africa. Revenue has declined every year since 2009, according to data compiled by Bloomberg.

The eight-page letter was written by staff working at the company’s finance, sponsorship, secretarial/administration, legal and ethics departments, according to the document. The document was also sent to Boston-based management consultancy Bain & Co., which has a contract to help turnaround the company, and New York-based recruitment company Spencer Stuart Inc., according to the copy provided to Bloomberg.

“It is impossible to ascertain the veracity, or otherwise, of allegations made,” Telkom said on Jan. 17 in a response to questions. The company urged the authors of the document to use official company channels to lay complaints and said those channels were used to decide on an “appropriate course of action.”

To contact the reporter on this story: Christopher Spillane in Johannesburg at cspillane3@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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