Telkom, Africa’s biggest fixed-line telephone group, said on Tuesday its suspended chief financial officer Jacques Schindehütte has been advised that the R5.9m loan granted to him to buy shares was void and has a fiduciary duty to repay the loan to the company.”
“We are confident that Mr Schindehütte will act in the best interests of the Company and repay the loan,” said Telkom in a statement.
On 2 October 2013, Schindehütte bought additional shares worth more than R5.9 million as the company’s share price continue to climb and the group prepared to reveal its turnaround strategy.
But he was suspended effective 24 October 2013, pending a disciplinary process.
The company didn’t provide reasons for the suspension, except to state that the suspension follows the findings of an investigation commissioned by the board after certain allegations were made against Schindehütte.
On Tuesday, Telkom said: “The loan to Telkom’s CFO, Mr Jacques Schindehütte, was granted in a manner that was inconsistent with the provisions of the Companies Act, making the transaction null and void. The board cannot and did not ratify the granting of the loan.
Telkom therefore has an obligation to claim the loan back in order to rectify the situation.
By virtue of his position as CFO of Telkom, Mr Schindehütte has oversight responsibility for compliance and corporate governance, including for the regulatory and / or administrative processes relating to the provision of loans to directors at Telkom.
He was actively involved in the processing of this loan and personally oversaw the advancement of the payment of the loan amount to himself.
Schindehutte said he would repay the loan.
“The interest-free loan has nothing to do with my suspension as I followed the correct procedure to seek approval for the loan,” Schindehutte said in an interview today to Blooomberg news agency. “I’ve now been told that the company was unable to ratify the loan as they had indicated to the market and I’ve been called upon to repay the loan. I will do that forthwith.”
This piece was lifted with permission from Tech Financials