It will take "six months or so" to find a permanent replacement for CEO Reuben September, Telkom chairman Jeff Molobela told shareholders as he faced fierce criticism about a lack of leadership at the telecommunications company.

Telkom was slammed forpoor corporate governance at its annual meeting this week, and a lack of leadership and proper risk management was blamed for the poor share performance. Telkom shares are trading at half their net asset value, which is a much deeper discount than for comparable international telecommunications companies.

"Clearly something is wrong," said David Couldridge, an analyst at Element Investment Managers. "There have been too many distractions; too many changes to the board and executive management. What is required is a strong, balanced, diverse board with the appropriate business skills."

Telkom has experienced a steady exodus of board members and senior executives over the past year; the latest was financial director Peter Nelson, who surprised the market on Thursday by announcing his immediate departure. Nelson had resigned days after September's ousting in July, but was set to continue until October.

Accusations of interference by Molobela in the day-to-day running of the company led the board to appoint KPMG to investigate the matter in July. Molobela said it would "take a while" for matters to settle down.

Couldridge was blunt in his assessment of Telkom: "What needs to be done is not complex. They need a sound strategic plan and get on and do it," he said.

Nigerian telecoms operator MultiLinks, for example, has been a financial disaster for Telkom, with write-offs of R5.6-billion in the past financial year. "They need to make a decision: are they going to sell it, or are they going to try and generate value? If they decide on the latter, then put the plan in place, get the right people and do it," he said.

Telkom, which must open its local exchanges to other operators next year, faces increasing competition in its declining fixed-line business and needs alternative revenue sources. It plans to launch mobile operations before the end of the year, acting CEO Jeffrey Hedberg said.

Molobela described Hedberg, Telkom's fourth CEO in five years, as a "breath of fresh air", but he refused to say whether Hedberg, initially hired to fix MultiLinks, would get the post permanently.

The government's 39.8% "golden share" in Telkom is seen as a key reason for the corporate governance challenges because it means the government can appoint five of the 12 directors, including the chairman. But the government's special rights lapse in March 2011 and there was no indication they would be extended, Molobela said.

Mervyn King, chairman of the King committee on corporate governance, said Telkom was a good example of "corporate schizophrenia". The company does things to satisfy its golden shareholder though these may not be commercially viable - such as installing unprofitable landlines in under-serviced areas - while simultaneously trying to increase profits for other shareholders, he said.

"The board and senior management need to be on Prozac permanently," King said. But he added that the expiry of these special rights should improve governance at the company. "It just has to improve - it will be coming off a very low base."