Mergers, Acquisitions and Financial Results

Telkom CEO Papi Molotsane and chairman Nomazizi Mtshotshisa couldn't have looked more uncomfortable when an elderly shareholder bustled to the podium after an exhausting two-hour annual shareholders meeting on Friday and hit them for R5 taxi fare.

After a pregnant pause when Molotsane and Mtshotshisa stared at each other, they both, nonplussed, rifled through their pockets until Molotsane found some coins. You can hardly blame the woman concerned: at least she was one of the few who left the AGM with anything of value.

Not that there was a shortage of questions, mind. Earlier, Molotsane said he believed Telkom's AGM was one of the best-attended meetings of any company listed on the JSE, and he was probably right.

It is just that Telkom's answers to shareholders' concerns are unconvincing. One almost gets the sense that Telkom doesn't particularly like its investors, and sees them as something of an irritation.

When one shareholder asked whether Mtshotshisa would mind giving a brief overview of the state of the business at future AGMs, Mtshotshisa said bluntly: "You have the annual report, which has all that information."

Given that many of Telkom's small retail shareholders invested for the first time on the stock market when Telkom listed in 2003, this is hardly an edifying response.

When livewire investor Arthur Lello asked why Telkom's shares were trading at R139 a share, rather than R200, chief financial officer Kaushik Patel pointed at a shareholder who had had the temerity to ask an awkward question and said the discount was due to the sort of "negative impressions created by that gentleman over there".

Patel also managed to blame "short-term shareholders" who didn't buy into Telkom's rationale for looking to spend R30bn to upgrade its services -- an announcement that shocked the market precisely because there was no forewarning of such a strategy.

Telkom also acted shocked at questions from lawyer Michael Alachouzos. For the past few years, Alachouzos has asked Telkom to explain various things, principally whether it is breaching the Companies Act by not having a proper "register of members".

How Mtshotshisa can claim to be unaware of Alachouzos's concerns for the second year running is remarkable. The arrogance of Telkom's top tier -- who feel they do not have to engage critics like Alachouzos until he "changes his attitude" -- makes Louis Luyt seem about as shy as a nine-year-old librarian.

If investors came to the meeting with the sense that Telkom was becoming less and less concerned with what they think about the company, then Telkom's AGM can only have reinforced that perception.

Business Day