New Telegraph

Fraud: Telkom moves to block probe into Nigerian operations

After more than a decade of probe into its foray in Nigeria and Mauritius, South African telecoms firm, Telkom, which is the subject of a takeover bid by rival, MTN, has filed court papers aimed at blocking an investigation into its ill-fated operations in both countries. In January, President Cyril Ramaphosa ordered a probe of Telkom’s forays in the two countries, giving the Special Investigating Unit (SIU) wide scope to look into allegations of corruption and malfeasance in the company’s affairs dating as far back as 2006.

A South African medium, BusinessDay Live, had reported that Telkom, of which the government owns about 40 per cent, was on a downward spiral when it entered Nigeria in 2007 via the purchase of three-quarters of a $500 miland lion (R7.6bn in today’s money) mobile business called Multi- Links.

The company racked up losses and was offloaded a few years later for just $10 million. Telkom SA Ltd. TKG, South Africa’s dominant fixed-line phone company, had in 2007 taken a step forward in its ambition to expand outside its home market with the acquisition of a majority stake in a Nigerian telecommunications company for $280 million. It bought 75 per cent of Multi-Links Telecommunications Ltd. from holding company, Kenston Investments Ltd. The deal provided Telkom with a footprint in Nigeria, Africa’s largest market and fastest growing telecoms market, and gave the company a springboard for further expansion into other countries in West Africa. Besides the investment in Nigeria, it also moved with the £10.32 million for Internet service provider, Africa Online Ltd., with operations in Cote d’Ivoire, Ghana, Kenya, Namibia, Swaziland, Tanzania, Uganda and Zimbabwe, and a 40 per cent equity stake in a joint venture with Verizon Communications Inc. VZ in Kenya and Zambia.

“The size and nature of growth of the Nigerian telecoms market, its low tele-density of only 20 per cent and its pent up demand for Internet access, demonstrates that there is immense potential for future growth, making this an ideal acquisition,” said the then Telkom Chief Executive, Papi Molotsane. As at the time of the deal, Multi-Links was Nigeria’s second-largest private telephone operator with a subscriber base of 162,000, and it claimed the most number of subscribers in the capital state of Lagos. Telkom had described the now moribund Multi-Links as the first operator in Nigeria to introduce code division multiple access technology, a digital technology that enables the provision of more efficient wireless services.

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