Telkom’s suspension of its chief financial officer (CFO) Jacques Schindehutte has cast a cloud over the business, says an analyst.

The South African fixed telecommunications provider on Monday released its half-year results, in which it reported that its operating revenue increased 0.3% to reach R16.2 billion and its profit after tax increased 41.1% to R773 million.

Telkom’s earnings before interest, taxes, depreciation, and amortisation (Ebitda) decreased 0.4%.

But in the interim results, Telkom further mentions that it provided Schindehutte with a R5,997,775.43 loan to buy shares in the company.

To date, Telkom, which is listed on the Johannesburg Stock Exchange (JSE), has not explained why it has suspended Schindehutte earlier this year.

This is despite the company expressing concerns in its interim results over the legality of the almost R6 million Telkom loaned to Schindehutte.

“Telkom’s management has recognised that the loan made to such executive may not have been in compliance with the provisions of the Companies Act and will, as a matter of urgency, take the matter under advisement from its advisers for rectification and/or recovery of the amount, should that be necessary,” the company says in its interim report.

Meanwhile, experts have weighed in with their concerns regarding Schindehutte’s suspension, saying it could risk overshadowing the company’s performance.

“The recent suspension of CFO Jacques Schindehutte, and ongoing investigation into the reasons behind it, continues to cast a cloud over the business,” Gareth Mellon, senior industry analyst for ICT at Frost & Sullivan Africa, has said in a public statement.

Regardless of the CFO debacle, Mellon says the company is moving forward.

“However, the results also provide continued evidence of Telkom’s improved direction with major investment in several technologies and services (e.g. fibre, Wi-Fi, ADSL products) key to driving longer-term transformation," said Mellon.