Telkom scrambles to replace its CFO with Transnet executive

Telkom CFO Dirk Reyneke had to step aside to make space for former Transnet CFO Nonkululeko Dlamini to take his place, the company announced on Friday.

Telkom appointed Reyneke as the group’s chief financial officer on 5 February 2021 after serving as acting CFO since 14 December 2020.

Reyneke joined Telkom in March 2012 from Absa retail and business banking and gained vast experience in the telecommunications market.

Before becoming Telkom CFO and a director of the company, he served as Openserve’s CFO from 2019 to 2020.

He was also the chief financial officer at Telkom Mobile and Gyro and a director of Telkom subsidiaries BCX, Gyro, Swiftnet, and Trudon.

Reyneke was also the head of integration at Telkom Enterprise and Business Connexion, overseeing the amalgamation of the two companies.

His tremendous experience across Telkom’s most important operating units did not seem to count much in the operator’s decision to replace him with Dlamini.

On Friday, Telkom announced that it had appointed Nonkululeko Dlamini as group chief financial officer and an executive director effective 1 December 2023.

Dlamini was previously the CFO at the Industrial Development Corporation of South Africa and acting CFO at Eskom. She also held other management positions within Eskom.

Dlamini has experience serving as a non-executive director on the boards of Kumba Iron Ore Limited and Small Enterprise Finance Agency (SEFA).

“Dlamini’s appointment will result in Dirk Reyneke, the incumbent Group CFO, stepping down from the board, effective 30 November 2023,” Telkom said.

Reyneke will now become Telkom’s chief capital projects officer, where he will “oversee the next phase of group-wide ROIC model implementation”.

“Reyneke will work closely with Dlamini to ensure her seamless transition to the Group CFO role,” Telkom said.

It is unclear why Telkom would replace a vastly experienced telecommunications executive with someone without experience in the field.

It is also unclear why Telkom would rush to appoint a Transnet executive, considering the state-owned enterprise’s struggles in recent years.

On the same day as the announcement of Dlamini replacing Reyneke, Mteto Nyati resigned as a non-executive director.

“His resignation follows recent developments which have resulted in capacity constraints on his side,” Telkom said.

DA calls for Dlamini’s appointment to be rescinded

Natasha Mazzone, DA shadow minister of Communications and Digital Technologies, called for Dlamini’s appointment to be rescinded.

“Dlamini’s appointment to Telkom is astounding considering the train wreck that she and former Transnet CEO Portia Derby, left behind at Transnet,” Mazzone said.

“The DA completely rejects this clear case of cadre recycling, which has been responsible for the collapse of the SOE sector in South Africa.”

Mazzone said as Transnet CFO, Dlamini’s job was to make sure that the SOE remained financially viable through prudent financial management.

“Instead, she has left behind an organisation saddled with a debt of R130.1 billion and paying R1 billion in interest every month on the debt,” she said.

According to the Auditor General, compliance with auditing and financial reporting standards by Transnet remained weak.

These weak controls directly impacted Transnet’s reported irregular, fruitless and wasteful expenditure, which increased from R1.1 billion in 2022 to R2.3 billion in 2023.

Mazzone said Minister of Communications and Digital Technologies, Mondli Gungubele, should explain why they decided to appoint Dlamini to become Telkom’s new CFO.

“The appointment raises questions about Telkom’s decision-making process and evaluating candidates for such crucial positions,” she said.

She added that it was perplexing that Dlamini was seen as fit for purpose for the chief financial officer role at Telkom.

“Transnet should have been the last place where Dlamini held a senior management position, especially one that involved the management of billions of rand,” she said.

“Dlamini will add no value to the financial management of Telkom. In fact, there is a high chance that she will leave the company in the same financial ruin that she left Transnet in.”

Mazzone called on Gungubele to immediately rescind Dlamini’s deployment as Telkom’s new CFO.