Telkom Files Charges Against Multi-Links Officials


Troubled CDMA operator, Multi-Links Nigeria could be in further mess as its South African communications service provider, Telkom, is laying charges against some of its senior executives for alleged misconduct and mismanagement.

Though the names of officials being charged by Telkom could not be ascertained, indications emerged that gross negligence, corruption, irregular activities and gross misconduct were amongst the charges laid by the company.

However, Telkom Chairman of the Audit and Risk Committee, Sibusiso Luthuli, on Thursday issued a statement saying Telkom has decided to state its position on these matters publicly in the near future.

It would be recalled that Telkom had earlier indicated its decision to exit the Nigerian market basically as a result of unimpressive loss. Multi-Links Telkom Nigeria's Acting Chief Executive Officer, Vincent Raseroka had noted that the decision to exit the market was purely based on business realities.

Raseroka had stated "It is strategically, financially and commercially challenging for us to continue to do business in this segment. With a current market share of 2.6 per cent in a market dominated by the GSM technology, it has become imperative that we explore other options and chart a new path to growth and profitability for ourselves as a business by utilising our fixed infrastructure here in Nigeria,"

He said a number of contracts have rendered Multi-Link Telkom's CDMA business unprofitable and unsustainable. Raseroka said his company was committed to reducing costs in a manner that ensures sustainable long-term benefits.

Raseroka said despite the comprehensive turnaround programme of the company in March this year, the CDMA business in Nigeria is still facing stiff challenges in a highly competitive environment, requiring scale to successfully compete. According to him, despite recent intervention, Multi-Links operating revenue decreased by 1.7 per cent.

Multi-Links made a net loss of 262 million rand ($37.6 million) in the six months through September, according to a recent presentation. The unit accounts for about 90 per cent of Telkom's business in Nigeria. Acting Chief Financial Officer, Deon Fredericks, said Multi-Links hasn't made a profit since Telkom purchased it for $410 million in 2007.