The CFO, Telkom and the giant golden handshake

Rewards will not solve Telkom woes says Business Against Crime Zululand Manager Dave Whittaker

Former Telkom chief financial officer Jacques Schindehutte was paid R18.8 million in the company’s 2015 financial year, despite leaving its employ last August, just five months into the 2015 reporting period.

In the year ended March 31 2015, during which time Schindehutte didn’t work a single day for Telkom as he was suspended, the former finance chief took home R6.5 million more than the CEO, Sipho Maseko. His remuneration included R12.2 million in “fringe and other benefits”.

Annual report

The numbers are contained in Telkom’s 2015 annual report, which was published yesterday. Telkom does not say how much – if any – of the R12.2 million in benefits paid to Schindehutte constitutes a severance payment. Schindehutte was suspended on October 24, 2013 and quit the group on August 8, 2014. A disciplinary process brought against him was later abandoned with no reasons given, with Telkom agreeing to allow him to retire from the board with full benefits accruing.

Neither Schindehutte nor Telkom ever revealed why he was suspended. However, he consistently denied that a R6 million loan granted to him by the company, which he used to buy shares in the operator, was behind the suspension.

There was also talk at the time he traded shares during a sensitive period. He bought R6 million in shares just 10 days before Telkom published a trading statement that sent the share price rallying higher.

Schindehutte declined to comment on the share trade, beyond saying he would not have traded if he believed he had access to sensitive information about Telkom that had not already been shared with the market.

Schindehutte told TechCentral he had been offered the opportunity to resign before being suspended, but doing so would not have been “congruent” with his “value system”. He said at the time he respected the decision of Telkom’s board to institute disciplinary measures against him.

Independent probe

Telkom said previously it had received a number of allegations against Schindehutte and that the board had tasked an independent legal firm to investigate them. “A report was completed and presented to the board by the law firm. The board considered the report, applied its mind and took professional advice,” Telkom said.

“In October [2013], the board determined that the fairest way forward was to provide Mr Schindehutte the opportunity to defend himself in a disciplinary hearing.”

This article was first published on TechCentral and republished with permission

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