'Ramaphosa ordering SIU probe into Telkom tied to his bid for re-election'

Bruce Whitfield talks to tech expert Duncan McLeod (TechCentral) about his theory for the President's 'surprise' move.

President Cyril Ramaphosa has ordered the SIU to investigate allegations of corruption at semi-state owned (40%) Telkom.

These include its dealings in in Nigeria and Mauritius through companies sold off years ago.

Telkom says it is awaiting further clarity on the scope of the investigation.

Telkom disposed of Telkom International & Africa Online Mauritius jointly grouped under iWayAfrica. The US$1 transaction supported the disposal of liabilities amounting to US$8 million.
Telkom statement

The President on Tuesday authorised the public release of the final report of the Special Investigating Unit probe into suspect Covid-19 procurement contracts.

In an article published on TechCentral, editor Duncan McLeod argues that the President’s decision to seek an SIU probe at Telkom is politically motivated.

"Ramaphosa's surprise instruction... to probe Telkom is likely much more about him winning re-election at the big ANC conference in December than a sudden desire to unearth old dirt at the telecommunications group" he writes.

President Cyril Ramaphosa accepted part one of the state capture report on 4 January 2022. Picture: GCIS.

Bruce Whitfield interviews the founder and editor of TechCentral on The Money Show.

He notes that Ramaphosa has made digital terrestrial television migration and the allocation of radio frequency spectrum to telecoms operators signature policies of his administration.

However, if the President can't deliver these before the ANC national elective conference in December, he faces a potential political backlash from his enemies in the radical economic transformation (RET) faction McLeod says.

I think this came as a surprise to everybody because these matters occurred a very long time ago, going back about 16 years all the way to mid-2006.
Duncan McLeod, Editor - TechCentral

You'll remember the headlines around companies with names like Multi-Links in Nigeria, where Telkom had a disastrous investment. They invested billions in a company that had the wrong technology at the wrong time... the management of the company was also a disaster...
Duncan McLeod, Editor - TechCentral

Multi-Links ended up costing Telkom more than an estimated R10 billion before they eventually ran out of Nigeria with their tail between their legs.
Duncan McLeod, Editor - TechCentral

There was also a lot of talk about corruption and dirty dealings around that deal, as well as other investments that the company made in Africa.
Duncan McLeod, Editor - TechCentral

The board of Telkom is now strong and protects executive management from political interference, says McLeod.

So why does President Ramaphosa want to dig up this particular issue when there are so many other more pressing and pertinent issues right now? asks Whitfield.

Mcleod says while it is speculation that informs his argument of political reasons, it is informed speculation.

He explains why it's all to do with the allocation of radio frequency spectrum and the digital migration project, which has involved Telkom in two law suits.

These are signature projects for both Ramaphosa and the Communications Minister and they're pushing for digital migration and the spectrum allocation to happen this year. The problem is that Telkom and e.tv have put a spoke in the wheel...
Duncan McLeod, Editor - TechCentral

With the ANC elective conference happening in December, I think President Ramaphosa's critics in the ruling ANC and the so-called RET faction will use this as a big stick to beat him over the head with as he seeks re-election.
Duncan McLeod, Editor - TechCentral

My interpretation from what we're seeing here is that he is using the SIU to put pressure on Telkom to back down over this litigation.
Duncan McLeod, Editor - TechCentral

Listen to the full conversation below: