The banking regulator has firmly countered suggestions by business person Sipho Pityana that its actions improperly caused his candidacy for the Absa chairmanship to be rejected, making it clear that Absa’s board never nominated Pityana nor ever formally asked the regulator to consider his name.
The regulator, and Absa itself, on Tuesday provided a very different version of the facts from that of Pityana, who last month took the Prudential Authority and Absa to court because he did not get the Absa chairmanship.
The shock court challenge was another setback for Absa, which has lost two CEOs over the past three years amid question marks over its governance and leadership culture.
The case also seemed to put at risk the robust relationship the banking regulator has traditionally had with the banks, one that has been the basis for SA’s sound banking regulation over many decades.
But in court papers on Tuesday, Prudential Authority CEO Kuben Naidoo said the process the regulator had followed in relation to the Absa chairmanship was the norm, in line with global guidelines.
Former AngloGold Ashanti chair Pityana, who has been on the Absa board since 2019 but was fired recently as the banking group’s lead independent director, alleged in court papers that his candidacy for the Absa chairmanship failed because of informal talks between the banking regulator and Absa chair Wendy Lucas-Bull.
Pityana alleged this was as a result of behind-the-scenes conversations between Naidoo and current AngloGold chair Maria Ramos, who shared with the regulator details of an investigation into sexual harassment claims against Pityana by an AngloGold Ashanti employee. Pityana unexpectedly resigned from the gold mining group’s board just before a report of the investigation by senior counsel Heidi Barnes was finalised.
Pityana challenged the legality of the informal process the regulator followed in evaluating his supposed candidacy, arguing his right to be heard had been ignored.
But in court papers, Naidoo said Ramos had not disclosed the results of the sexual harassment investigation to him. Instead, the Absa board supplied him with the Barnes report and the board’s own review of that report, after he expressed concerns that these could pose a reputational risk to Absa and to Pityana himself.
In her responding affidavit, Lucas-Bull said Pityana had told her at the time of his resignation from the AngloGold board that there had been false claims of sexual harassment against him — but these were unfounded. However, she had not been aware that the mining group had commissioned an external probe, and it was only in May this year that she learnt of the existence of the final Barnes report, which did not accept Pityana’s version of events.
Disclosure
One of the questions board members had asked at a “watershed meeting” in August was whether Pityana had made a full, frank and timeous disclosure to Absa about the investigation into the claims against him. At that meeting the board had decided not to nominate him.
Lucas-Bull said there had also been concerns about Pityana placing the banking group in an adversarial position with the Prudential Authority.
Naidoo said in his affidavit that Absa’s board had chosen to engage with the regulator on any potential concerns about potential candidates for chair, including Pityana. Such “engagements for guidance” took place routinely between the authority and the banks under its supervision — as Pityana had acknowledged in his own affidavit to the court.
The Prudential Authority had expressed certain concerns, which Absa would have had to address in a written nomination in terms of the Banks Act, Naidoo said. Once a nomination was received, the regulator would have followed the processes prescribed in terms of the act. But the Absa board’s decision went against him, despite his submissions to the board.
Naidoo’s frustration with the to and fro in the Absa boardroom is clear. Eventually, he writes to Lucas-Bull saying: “I do not think there is any merit in continuing to deal with this matter informally. Please submit a formal BA020 application, which will be processed as per the normal procedure.”
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