Telkom SA wins legal battle against President's SIU probe

South African telecom operator Telkom has won its court case against SA President Cyril Ramaphosa over his directive that authorized a wide-ranging probe into some of the operator's deals across Africa going back over 15 years.

The country's High Court this week found that Ramaphosa's 2022 proclamation for a Special Investigating Unit (SIU) probe into alleged unlawful conduct by the telco and some of its employees and agents was "unconstitutional, invalid and of no force."

In January 2022, Ramaphosa issued a proclamation directing the SIU to investigate some of Telkom's old deals in Africa, including failed forays into Nigeria and Mauritius.

In response to that proclamation, Telkom sued the President in July 2022, citing that his actions were unconstitutional.

The SIU's investigation was supposed to look into alleged maladministration in Telkom's sale of iWayAfrica, Africa Online Mauritius and Multi-Links Telecommunications Limited.

In a statement, Telkom said the Pretoria High Court has set aside Proclamation 49 issued by the President on January 25, 2022, giving the SIU authority to investigate Telkom.

"The allegations in the proclamation had already been addressed by the company through Telkom's corporate governance processes and the outcomes are of public record," said Telkom Group CEO Serame Taukobong.

Telkom's legal victory

The telco said that it approached the court because it is of the view that, left unchallenged, the proclamation would set a dangerous precedence on the role of the state in private enterprise.

Furthermore, in delivering the judgment, Judge J Thlapi found the decision to issue the proclamation to be unconstitutional, invalid and of no force or effect, the telco noted.

"Telkom consistently upholds the principles of good corporate governance. It is unfortunate that Telkom needed to approach the courts on this matter, and we hope that this judgment brings it to finality," Taukobong concluded.

Telkom Group Chief Executive Officer Serame Taukobong. (Source: Telkom South Africa.)

Telkom is no stranger to South Africa's legal system and had a lengthy court battle with South Africa's telecom regulator, the Independent Communications Authority of South Africa (ICASA), last year.

However, that case was settled in April 2022 after the spectrum auction had already happened in March 2022.

Telkom keeps making headlines

The telco has been making news in South Africa in recent times. In July 2023, the operator's board rejected an offer from a consortium led by former CEO Sipho Maseko. The consortium aimed to acquire a controlling stake in the operator.

That rejection comes after Telkom issued a cautionary announcement to shareholders in June 2023 confirming it had received an "unsolicited non-binding indicative letter" from the consortium.

The telco has waved off a number of takeover attempts lately. In January 2023, it called off discussions over a possible merger with local operator Rain.

MTN also showed interest in buying Telkom in 2022, but discussions ended.

Telkom is South Africa's third biggest operator with over 15% market share at the end of March 2023, according to statistics from market research company Omdia, a sister company of Connecting Africa.

Vodacom leads in the country with just over 43% market share; MTN is second, controlling 30% of the market; and Cell C comes in fourth with 11% market share.

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*Top image is of South African President Cyril Ramaphosa. (Source: GovernmentZA's GCIS via Flickr.)