Telkom Says It Got Complaint About Senior Hires, Fund Misuse

Telkom SA SOC Ltd., Africa’s largest fixed-line operator, said it received a letter of complaint from unidentified people who say they are employees that questions the way the company has appointed senior staff and says funds have been misused.

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 is signed by “The Group of 6 Telkom Whistle-blowers/employees” and is dated Dec. 4, 2013.

“Telkom confirms that it has received the document,” the company said in an e-mailed response to questions yesterday. “All allegations received by Telkom through formal mechanisms are used as a basis for Telkom to decide on an appropriate course of action,” it said, urging the authors of the document to use official company channels.

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.

‘Strong Views’

The eight-page letter demands Telkom investigate allegations.

The 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.

Telkom’s shares gained 0.7 percent to 32.85 rand yesterday at the close of trading in Johannesburg, having almost doubled in the past 12 months.

The group has “strong views on the culture of ‘silencing’ employees,” it said in the letter. “Added to that in Telkom the fraud/corruption line is also not really trusted.”