A shopper walks past a Telkom shop at a mall in Johannesburg. Picture: REUTERS/SIPHIEW SEBEKO
A shopper walks past a Telkom shop at a mall in Johannesburg. Picture: REUTERS/SIPHIEW SEBEKO

Telkom subsidiary BCX reportedly spent millions with controversial consultancy firm Bain & Company, according to the Mail & Guardian.

This comes after BCX, which offers digital telecommunications and IT support services, recently announced plans to retrench 790 employees, despite having spent more than R200m with Bain on cost-cutting and turn-around strategies. However, BCX had made a decision not to implement Bain’s strategies, the Mail & Guardian reported.

“BCX’s own review of the contracts has raised red flags about its negotiation, implementation and monitoring capacity, which led to millions being paid unnecessarily,” it said. “So useless were the strategies Bain drafted for BCX that new chief executive Jonas Bogoshi has set them aside and terminated Bain’s mandate.”

According to the publication, an internal review of the contracts highlighted huge shortcomings such as a lack of detail around initiatives, no clear agreement over Bain’s expenses and proposed cost-cutting strategies which were R1bn short of what was initially planned.

Bain has come under fire in recent months for contributing to the near collapse of the SA Revenue Service (Sars).

Testimony at retired judge Robert Nugent’s inquiry into Sars has detailed how Bain’s work at the revenue service, which included breaking up critical units, rendered the organisation dysfunctional.

In his final report to President Cyril Ramaphosa, Nugent found the tender awarded to Bain had been manipulated to benefit the company financially, and recommended that the national director of public prosecutions consider criminal charges against the consultancy firm.