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Telkom to pay dearly for TV venture's failure

By unknown | Apr 06, 2009 | COMMENTS [ 0 ]

Zweli Mokgata

Zweli Mokgata

Telkom Media will write off at least R500million if it shuts down its failed TV venture.

The fate of the subscription-based broadcaster and its 100 employees, will be decided next week at a shareholder's meeting.

The parastatal refused to comment on how it planned, if at all, to recoup the hundreds of millions of rands already pumped into the channel or even how it was used.

Telkom spokesman Pynee Chetty confirmed that between R450million and R500million had been spent since the company registered in July 2006. "We can't comment on the investment structure as we are currently in a closed period ahead of our financial results," said Chetty.

Despite no income, Telkom Media paid its staff bonuses in December, saying at the time they were being rewarded for work done in preparation of its launch.

In all likelihood shareholders will vote for its closure since Telkom, which holds a 75percent majority stake, has already stated its intention to pull out.

The project was the brainchild of former Telkom chief executive Papi Molotsane.

But management under his successor, Reuben September, were not so keen on injecting billions into a capital-intensive project with low returns and which deviated from its core business.


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