Telkom probes top managers over possible fraud

The Mail & Guardian newspaper reported on Friday that three senior managers at Telkom were thought to have colluded with security contractors which provided systems to prevent the theft of copper cables. Such theft is an ongoing occurrence which analysts say is costing the company millions ever month. A report on the Fin24.com site says that Anton Klopper, group executive for legal services at Telkom, said that further details could not be provided until the ongoing investigation was completed. The report quotes Klopper as saying: 'As Telkom viewed the allegations contained in the memorandum in a serious light, the company immediately conducted an internal audit, which commenced in December 2009, and management is currently implementing the recommendations of this report.' The report recommended investigations of three Telkom managers specifically. According to the Mail & Guardian, the report apparently describes the managers as some of the company's 'most trusted and senior officials'. The report apparently questioned why payments to security companies that monitor Telkom's cable network increased by up to 125% from 2008 to 2009. The Mail & Guardian reported that Telkom now pays R18m a month to these security companies. Full report on the Fin24.com site

The company lost more than R300m to cable theft between April 2006 and March 2007, with hired security costing R130m of that amount, according to a Moneyweb report. The report notes that in the 2007 financial year, it was hammered by a R571m loss through cable theft. In 2008, it lost R863m, rising with the dramatic increase in the international price of the metal. Full report on the Moneyweb site