The South African government has moved to deny local press reports linking it with an approach to seize full control of Telkom South Africa, Moneyweb.co.za reports. In the wake of cabinet’s recent rejection of Korean Group KT Corp’s attempt to purchase a 20% stake in Telkom, it was reported this week that the move was a precursor to the state taking full control of the company. Quoting an unnamed source, Business Day reported that ‘the government is looking for a way to direct Telkom to meet its development agenda without being hampered by the rules of the Johannesburg Stock Exchange’, a notion that the government has promptly denied. Further, it was believed that Telkom’s delisting and renationalisation were expected to be key discussion point at the African National Congress’s (ANC’s) national policy conference in Midrand next week.
Siyabulela Qoza, the spokesman for Communications Minister Dina Pule, told MoneyWeb: ‘There has not even been a discussion or talks inside the department about any proposal for Telkom’, whilst Telkom representatives have ‘noted the speculative reporting, quoting unnamed sources, around [Telkom’s] possible delisting and renationalising; the company confirms that it has not received any communication on this matter from any of its shareholders. Furthermore, Telkom is not in a position to pronounce on the ANC’s internal discussions on policy or any other matter whatsoever as it is not party to those discussions’.
The government currently owns 39.76% of Telkom, making it the company’s largest stakeholder by some distance; a further 1.96% stake is classified as ‘Telkom Treasury Stock’, whilst the Government Employees Pension Fund holds a further 10.89% stake. Trade unions, including Cosatu and its affiliate the Communication Workers Union (CWU), came out in strong support of the decision to block the KT Corp deal, and are firmly in support of nationalisation. Cosatu spokesman Patrick Craven commented: ‘It is a long-standing policy of ours that all strategic companies should be under complete state control and Telkom is one of those’.