Sipho Pityana, who was sacked from Absa’s board at the end of November, has launched a legal challenge against the bank seeking his reinstatement as well as compensation. He argued that his removal was in contravention of the Companies Act and punishment for challenging the Reserve Bank’s Prudential Authority (PA).
Absa removed Pityana from its boards “with immediate effect” on November 24 after saying he was derelict in his duties and that he failed to act in the bank’s interests. The furore between Absa and Pityana erupted when he made the bombshell announcement in October that he was suing the banking regulator for allegedly blocking him from being considered for the role of Absa chair.
“I have today initiated a legal challenge against Absa’s decision to remove me from its board of directors,” Pityana said in a statement on Wednesday. “I have applied to the North Gauteng High Court for a ruling that the removal was irregular, and requested compensation for this breach of the Companies Act.”
In papers filed on Wednesday, which have been seen by Business Day, Pityana argues that Absa had no basis for removing him from its board. He also reiterated earlier allegations that the decision to do so was to punish him for daring to take the PA to court.
“It is clear from the events leading up to my removal that I am in effect being victimised for legitimately exercising my rights,” Pityana said. “The decision to challenge the PA was not taken lightly. But it was necessary to protect my own reputation, as the PA took its decision without providing me with an opportunity to defend my name.”
At the heart of Pityana’s court challenge against the PA is his allegation that the regulator had conducted an “informal process” with the boards of Absa Bank and Absa Holdings, to block his nomination for the Absa chair role.
He said Kuben Naidoo, who heads the PA and is deputy governor of the Reserve Bank, allegedly told outgoing Absa board chair Wendy Lucas-Bull, who steps down at the end of March, that he would not support Pityana’s nomination as her replacement.
In his own papers filed in November, Naidoo said Absa had chosen to engage with the regulator on any potential concerns about potential candidates for chair and such “engagements for guidance” were routine and in line with global standards. In the end, Absa never nominated Pityana, so the PA never had to make a decision on his suitability, he said.
Pityana claims 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 that year. 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.
Ramos is a former colleague of Naidoo’s — and Bank governor Lesetja Kganyago — during her time as director-general of the National Treasury after SA’s transition to democracy. In her papers, also filed in November, Lucas-Bull distanced the bank from Pityana’s accusations and said engagements with Naidoo did not substitute for its own internal processes.
In the court papers filed on Wednesday, Pityana claims he was interviewed for the Absa chair role on April 8 2021 and informed by the bank’s succession committee, led by Alex Darko, that he met the requisite criteria. Pityana said Absa’s board unanimously approved the recommendation for his nomination as chair but before a formal communication could be made to the PA the regulator raised concerns about his appointment based on the sexual harassment allegations against him.
Pityana said Absa’s succession committee appointed a senior attorney, Peter Harris, to review an investigative report into the allegations, which was conducted by advocate Heidi Barnes at the request of AngloGold. According to Pityana’s court papers Harris found that the report by Barnes was flawed as it did not take into account all the relevant evidence.
Pityana goes on to say in the court papers that the PA was supplied with copies of the reports by both Barnes and Harris yet still indicated to Absa that it would oppose his nomination as chair. He claims Lucas-Bull informed him by telephone on August 11 2021 that Absa’s board had decided not to proceed with his nomination as chair to avoid jeopardising its relationship with the PA.
Pityana alleges he was not given an opportunity to respond to the PA’s objections, which he said were communicated through an informal process that circumvented the prescribed procedures set out in the law. He added that the PA’s actions not only interfered in his contraction relationship with Absa but defamed him by implying he was not a fit and proper person for the job.
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