Business Day made a false comparison in its editorial opinion between my legal matters against the SA Reserve Bank’s Prudential Authority (PA) and Absa, and Peter Moyo’s unsuccessful bid, which could mislead the public (“Moyo and Pityana sagas hold lessons for boards and unwanted CEOs”, May 19).
I approached the high court in Pretoria to seek a declaratory order that the PA had acted unlawfully in its objection to my appointment as chair of the Absa board. In doing so, it impugned my character and hard-earned reputation. In my court bid, I seek no relief against Absa but have cited it as an interested party.
It is now common cause that Absa chose to join the matter in support of the PA to oppose my application. In its answering affidavit, Absa raised matters that contradict aspects of what is in both the PA’s affidavit and in mine. I have therefore applied to the same court to compel Absa to release the minutes and notes of the board’s deliberations to assist me with my replying affidavit.
There is a closer comparison that Business Day avoided. Though my matter has not yet been heard, the comparison with that of Yashoda Ram — who the PA appointed provisional curator for 3Sixty Life before proceeding to remove her on spurious grounds that she misrepresented her qualifications — is striking. Similarly, in this case Ram’s employer, BDO SA, supported the PA’s bid to have her removed. Courageously, she successfully opposed their collusion to undermine the law.
The conclusion of the court that they employed an “incompetent procedure” in seeking to remove her as a provisional curator is a terrible indictment of former PA head Kuben Naidoo, who was unceremoniously shifted to a parallel role.
Like BDO SA, which proceeded to suspend Ram when the PA filed for her removal even before the court could rule on the matter, Absa removed me as a director, ostensibly on the grounds that my court action constituted negligence and dereliction of duty. Absa maintains that a charge that the PA acted unlawfully implies it was complicit in the illegality.
In a separate matter, I have taken this unlawful decision of the board on review in terms of Section 71(5) of the Companies Act. In this regard, Absa has refused to make available its record of decision, which is the subject of review, and has asked the court to deem my application an irregular step in that it relied on wrong rules of the court.
The consequence of the court’s ruling against the PA’s removal of Ram was to nullify her suspension by BDO SA. The stark difference is that Ram is an employee and I am a director of a board. Directors are elected by shareholders. They carry important statutory fiduciary duties and have a duty of care. That includes ensuring that their companies show regard for the rule of law at all times.
As an independent nonexecutive director who takes his responsibilities seriously, I understand this to mean that I may occasionally disagree with my colleagues without having to be removed from the board as a consequence. Without the protection of their independence of mind, directors are reduced to an unscrupulous chorus singing the tune of the dominant — including the outlaws.
It is for this reason that the Companies Act allows the board, in limited circumstances, to remove one among its number, and even in such cases provides for these decisions to be reviewed by the courts. This is to ensure the boards do not overreach their powers. Seldom do directors take to the courts in these circumstances; they often quietly resign to preserve their companies and the potentially negative publicity that comes with this. When one does, we should sit up and engage the underlying reasons and promote a public debate that enhances our corporate governance, rather than tagging them with phrases such as “the litigation lads”.
It is an irony that Business Day believes my court challenge stands to undermine my public reputation of fighting corruption. They may have missed the public outcry following the exposure of a number of blue chip firms’ implication in corruption and state capture. I didn’t think they’d need reminding that it starts with a culture of impunity and lack of accountability, a disregard for the rule of law and collusion with state institutions — including regulators from time to time.
Today we ask, appropriately, where were the boards of Steinhoff, Tongaat Hulett and others when the rot happened? Does their silence make them complicit? Is it conceivable that this culture of silence in the face of what directors may sometimes be experiencing as unlawful and unethical conduct stems from self-preservation and a fear of being ostracised?
My stand against corruption in my own political party and in the government saw me being ostracised. If taking a similar stand in my private sector roles costs me my colourful career, as Business Day predicts, so be it. What does corporate accountability look like beyond the glossy annual integrated reports?
Disappointingly, Business Day believes these matters are always just about taking golden handshakes, basking on exotic islands and enjoying a good life. Not me. I have been raised on values that I hold dearly and which no amount of money can buy. When these are violated and undermined, as I believe in this instance, I never hesitate to take the fight. It is my fervent view that no corporate should take away the constitutional rights of a citizen, as Absa has done, when they feel aggrieved.
The courts must decide whether I am right or wrong in this instance. I hope that, unlike Absa, Business Day has confidence and trust in our courts, rather than simply dismissing those who use them to exercise their rights and protect their reputations.
• Pityana is chair of Izingwe Capital and Redefine Properties. He has served in both an executive and nonexecutive capacity on the boards of several JSE-listed companies, including Absa, AngloGold Ashanti, Bytes Technology Group, Afrox and Spesom, and is former president of Business Unity SA.
Correction: May 25 2022
Sipho Pityana’s response to our editorial opinion of May 18, published online on May 23, stated that he had served as a member of the board of Old Mutual, among others. This was incorrect. Business Day regrets the error.
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