Sipho Pityana, who was sacked from Absa’s board on Wednesday, has accused the banking group of “bullying and intimidation tactics” and says he will take it to court to contest his removal, which he says is unlawful.
Absa released a statement on Wednesday saying its boards had resolved to remove Pityana as a director “with immediate effect” after a meeting on Tuesday at which Pityana was asked to address their view that he was derelict in his duties and failed to act in the interests of the bank.
The meeting came after Pityana said in October that he was taking the Prudential Authority (PA), a unit of the Reserve Bank that regulates lenders, to court for allegedly blocking him from being considered for the role as chair of Absa.
“Absa boards, disappointingly and unlawfully, resolved to terminate my directorship of those boards. I have therefore instructed my legal team to take the decision of the boards to terminate my directorship on review with the courts,” Pityana said in response to Absa on Wednesday.
Pityana disputes the bank’s allegation that he is acting against its interests by taking legal action against the PA. He says it is within his constitutional rights to do so and that he is not seeking relief against the bank. He further accused Absa of relieving him of his duties on its board as a form of punishment for taking on the regulator.
“The message from Absa’s actions to date — removing me as the [lead independent director] and Remuneration Committee [chair] — and removing me today [Wednesday] as a director is clear: ‘If you take on the regulator and exercise your legal rights, you will be punished and removed’. This is unlawful because it discriminates against me and prejudices me for exercising my legal rights set out in the constitution and the Banks Act,” Pityana said in his statement.
Pityana’s surprise court challenge against the PA is the latest setback for Absa, which has lost two CEOs over the past three years and faced increasing scrutiny of its leadership culture. The bank had to fend off a backlash in April after Daniel Mminele, its first black CEO, stepped down over differences with its board.
That prompted criticism from the Association of Black Securities and Investment Professionals (Absip) which questioned why Absa had not produced a pipeline of capable black executives to succeed Mminele. The Black Management Forum and Black Business Council (BBC) were also left unimpressed by Mminele’s departure, which came just 16 months into the role.
Pityana filed papers to the High Court towards the end of October asking it to declare that the PA had unlawfully conducted an “informal process” with the boards of Absa Bank and Absa Holdings, to block his nomination for the Absa chair role. He claims that Kuben Naidoo, who heads up the PA and is deputy governor of the Reserve Bank, had allegedly told outgoing Absa board chair Wendy Lucas-Bull, who steps down in March, that he would not support Pityana’s nomination as her replacement.
Pityana says the PA blocked his nomination over sexual harassment allegations made against him in 2020 by a senior executive of AngloGold Ashanti, where he was chair before stepping down in December. While Pityana disputes the allegations, he says former Absa CEO Maria Ramos, who is now chair of AngloGold Ashanti, was the one who informed Absa’s board of the harassment accusations.
“When the weight of an untested opinion of a Maria Ramos becomes a determining factor in the decisions of the PA, we are left to wonder whether those intent on ruling from the grave have not constituted themselves into a cabal representing some new form of capture of institutions,” Pityana said in his statement on Wednesday.
Absa responded to Pityana’s court challenge against the PA on November 12, roughly three weeks after he filed his papers to the High Court, by immediately removing him as lead independent director, chair of its remuneration committee and as member of its directors’ affairs committee.
Nevertheless, he was not removed from the board until Wednesday, presumably as the bank sought legal advice. Pityana says his removal from his Absa board roles had nothing to do with competence or performance as he was re-elected to the same positions in August.
“For those who may be desperately looking for an example of ‘another black failure’ in the corporate boardroom, this is not one of them,” said Pityana.
He says in his statement on Wednesday that Absa’s board had presented him with a 48-hour notice on November 2 that he resign as a director due to his court action against the PA. Pityana advised the boards on November 8 that he was rejecting their “unreasonable demand”.
“I refused to resign because to have done so would have meant succumbing to corporate bullying and intimidation tactics that should have no place in our society,” said Pityana.
Absa’s share price ended the day 2.62% lower at R134.10, underperforming the JSE banking index which lost 1.79%. Absa’s share price is now up nearly 12% so far this year, while the banking index has gained more than 18.5% over the same period.
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