Speculation regarding government’s control over JSE-listed Telkom came to a head on Friday after chairperson Jabulane Mabuza said the responsibility for developing and implementing a strategy for the embattled firm lay with Telkom’s board and not government.

This came a year after the two parties' fractured relationship and disagreements regarding the direction of the company emerged during Telkom’s annual general meeting (AGM) last October.

Conjecture intensified over the direction of government’s control and its alleged meddling in the affairs of the listed company after the then Communications Minister Dina Pule, through a changed proxy vote, rejected the reappointment of four directors, including Sibusiso Luthuli, who was meant to serve as chairperson while a replacement for Lazarus Zim was sought.

Mabuza had assumed the role of chairperson a month later.

This had followed on the heels of Cabinet’s rejection of South Korean firm KT Corp’s offer to buy a 20% stake in the South African group last year and giving Pule three months to table a new turnaround plan for Telkom.

Recommendations on possible options for Telkom from the Department of Communications (DoC), which were intended to be tabled by the end of last year after undergoing Cabinet scrutiny, had never emerged.

Industry analysts previously told Engineering News Online that the flood of exits earlier this year by the JSE-listed group’s directors and former CEO Nombulelo Moholi indicated a clash between Telkom management and its largest shareholder on the direction needed to fulfil its mandate.

Government directly owns 39.8% of Telkom, with the State-controlled PIC holding 10.9%.

The DoC had defended its decisions, saying that it aimed to enhance and protect Telkom’s share value, while balancing its '100% broadband by 2020' aims.

The differing views had added stumbling blocks and delayed Telkom’s ability to turn around its business, but with an improved board governance structure and the development of a cohesive and stable management team, Telkom was now back on track.

CEO Sipho Maseko on Friday said the group would be ready, by November, to “reveal what it can” about an emerging strategy, which was 60% to 70% complete, to bring the beleaguered group back onto the path of profitability.

He said he had been in the top position long enough to "see a picture emerging” of what the company would like, what the specific areas of concern were and what needed to be done to improve the group.

These included resetting the cost base, creating a new affinity with customers, ensuring a sustainable mobile business and mobilising its employees.

Maseko said that, in the six months since assuming the role of CEO in April, much had been done to align the interests of – and build trust between – Telkom, its employees and shareholders, and the 2013 AGM, held in Midrand on Friday, was a critical milestone.

To mobilise employees, the company tabled the implementation of a share scheme incentive to all qualifying Telkom employees, which would reward employees for contributing to the success of the turnaround strategy of the company, enhancing stakeholder value and ensuring sustained performance improvement.

The share scheme aimed to align the interests of employees with those of shareholders. The success of the Telkom’s turnaround journey was dependent on having the right resources to effect performance improvement.

Maseko added that the high approval percentages of the resolutions tabled at the AGM had revealed a stronger, more aligned relationship between the stakeholders. All the board of directors were elected with over 95% shareholder approval, and the remaining resolutions, which included the tabled employee scheme, had achieved over 80% in shareholder approvals.