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14 January 2014

Telkom clarifies Bloomberg story

Telkom notes that the Bloomberg news agency has today published an article regarding the R6m loan that Telkom had provided to its Chief Financial Officer, Mr Jacques Schindehütte, last year.

The Bloomberg report indicates that Telkom has asked Mr Schindehütte to repay the loan.

Bloomberg reporter Mr Chris Spillane requested comment from Telkom on this issue today. However, Mr Spillane went ahead and published his article before Telkom had an opportunity to respond with the Company's comment, despite being advised by Telkom that the response was being prepared for Bloomberg.

The failure by Bloomberg to provide Telkom with the opportunity to respond is unprofessional and it is dismaying that such conduct emanates from an agency of Bloomberg's stature.

Telkom recognises that, as an international news agency, Bloomberg articles are widely published by media across the world. The Company is therefore compelled to put on the record the response that Mr Spillane did not wait for before publishing his article.

Telkom's statement regarding the Company's request for the repayment of the loan is as follows:

"The loan to Telkom's CFO, Mr Jacques Schindehütte, was granted in a manner that was inconsistent with the provisions of the Companies Act, making the transaction null and void. The board cannot and did not ratify the granting of the loan.

Telkom therefore has an obligation to claim the loan back in order to rectify the situation.

By virtue of his position as CFO of Telkom, Mr Schindehütte has oversight responsibility for compliance and corporate governance, including for the regulatory and / or administrative processes relating to the provision of loans to directors at Telkom.

He was actively involved in the processing of this loan and personally oversaw the advancement of the payment of the loan amount to himself.

As a director of the Company, and having now been advised that the loan was void, the CFO has a fiduciary duty to repay the loan to the company. We are confident that Mr Schindehütte will act in the best interests of the Company and repay the loan."

For further enquiries, please contact:

Pynee Chetty

Senior Specialist: Media Relations

Group Communication

Tel:+27 12 642 1716

Mobile: +27 81 389 7874

Email: chettpr2@telkom.co.za

 OR

Leigh-Ann Francis

Specialist: Media Relations

Group Communication

Tel: +27 12 642 1728

Mobile: +27 81 391 4780

Email: francilm@telkom.co.za

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ABOUT TELKOM:

Telkom is a leading communications services provider in South Africa. We had consolidated operating revenue of R16.8 billion and normalised profit after tax of R1, 683 million for the period ended 30 September 2015. Total assets amounted to R41.9 billion and equity attributable to the owners of Telkom to R23.5 billion as of 30 September 2015. The group generated normalised free cash flow of R1.4 billion for the period ended 30 September 2015.

As of 30 September 2015, we had approximately 3.3 million telephone access lines in service and 1,030,441 ports connected via MSAN access. We offer business, residential and payphone customers a wide range of services and products, including:

  • fixed-line retail voice services using PSTN (Public Switched Telephone Network) lines, including ISDN (Integrated Services Digital Network) lines, and the sale of subscription based value-added voice services and calling plans;
  • fixed-line customer premises equipment rental and sales services both voice and data needs and these include PABX, Computers, Routers, Modems, Telephone handsets and other ancillary equipment;
  • interconnection services, including terminating and transiting traffic from South African mobile operators, as well as from international operators and transiting traffic from mobile to international destinations;
  • fixed-line data services, including domestic and international data transmission services, such as point-to-point leased lines, ADSL (Asymmetrical Digital Subscriber Line) services, packet-based services, managed data networking services and internet access and related information technology services;
  • Data Centre Operations includes e-commerce, application service provider, hosting, data storage, e-mail and security services;
  • W-CDMA (Wideband Code Division Multiple Access), a 3G next generation network, including fixed voice services, data services and nomadic voice services;
  • mobile communication services, including voice services, data services and handset sales through our mobile navbar-brand called Telkom Mobile;
  •  information and communication services including cloud services, infrastructure services, workspace services, global service integration management and hardware and network equipment sales locally, in seven African countries, the UK and Dubai through Business Connexion Group; and
  • other services including directory services, through Trudon (Pty) Ltd, wireless data services, through Swiftnet (Pty) Ltd.

Convergence is one of our key strategic initiatives in building a sustainable future for Telkom.  We will lead the provision of converged services in South Africa in support of our mission statement: Seamlessly connecting people to a better life.