Racist talk hits Telkom's New York share price
September 29, 2003
By Nicky Smith
Johannesburg - A downward price movement for Telkom's New York listing meant the telephone operator had to sue the Communication Workers' Union (CWU) for the allegations it made about racist employment practices, Telkom's senior manager for employee relations, Roy Sewnarain, said on Friday.
He said while institutional investors in South Africa understood the politicking of unions, this did not span the Atlantic, and Telkom's share price had fallen in New York on news of the racist allegations.
In the week starting on September 8, when the CWU's allegations first became public, Telkom's price dipped 0.9 percent in New York to $22.35, it remained flat for the next day (following the electricity blackouts in New York) and then started its upward trend once more.
From September 22, when the labour department raised concerns over Telkom's retrenchment process, the share dipped 0.2 percent to $24. It has gained since.
The CWU said the majority of the 20 000 jobs shed at Telkom over the past four years belonged to black people. It blamed an inefficient re-training programme for not giving former employees the right skills mix so that they could be retained or redeployed internally or placed in the information and communications technology sector externally.
Sewnarain said Telkom had only forcefully retrenched 1 881 employees; the rest had volunteered to leave. Telkom had followed the internationally accepted last-in-first-out approach, and the majority of the employees who joined Telkom more recently were black.
"Let us see if a judge will call us racist."
The union has said it is worried about the defamation case. It had not meant to defame Telkom.
The CWU's secretary-general, Seleboho Kiti, said the union had felt it was not being taken seriously by Telkom's management and believed the only route was through the newspapers.
Telkom was implementing what it believed would be its last big retrenchment exercise. It had identified 1 235 jobs that must go, and it was trying to get the CWU to agree to allow its members the opportunity to volunteer for retraining and possible redeployment.
Last Tuesday the court granted an urgent interdict to muzzle the union and gave Telkom 30 days to file papers on the defamation case.
In New York Telkom's value has appreciated by more than 70 percent since its listing in March. Starting from just under $14 for one of its American depositary receipts, they are now trading at about $24.
In Johannesburg Telkom shares closed 49c firmer on Friday at R43.
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