Property group Redefine says it is “closely monitoring” the public spat involving its chair, Sipho Pityana, who was this week fired from the Absa board for alleged dereliction of duty and is engaged in a high-profile legal battle with the Reserve Bank and the banking group.
Asked to comment on the implications for Redefine of its chair being embroiled in such a dispute, the company said the controversy, which relates to Pityana’s alleged conduct at another company, has not affected his duties as director and chair.
“As far as the board is able to assess, [the matter has] not adversely impacted the company. The board is continuously and closely monitoring and evaluating this matter and developments.”
The group said the appointment and removal of directors is primarily the domain of shareholders. “We are not yet aware of any calls from shareholders for Pityana to step down or be removed from the Redefine board.”
If the board takes any action on this matter, “its decision to do so will be informed by the best interests of our shareholders and other stakeholders”.
Pityana, who became Redefine chair in May 2019, the same month he joined Absa’s board, is involved in an unprecedented fight with the Reserve Bank’s Prudential Authority (PA) and Absa.
Pityana’s conflict with Absa stems from his decision to take the PA to court for allegedly interfering in his nomination for the position of Absa chair.
Both Absa and the PA submitted scathing affidavits this week dismissing Pityana’s claims.
In response to his removal from the Absa board, Pityana has also instructed his lawyers to take Absa’s decision to remove him as a director on a court review.
Absa said Pityana has a right of review and would need to bring his review application within 20 business days of his removal, as stipulated in the Companies Act.
The bank’s decision not to nominate Pityana for the position of chair was influenced by revelations of a sexual harassment complaint against him when he was AngloGold Ashanti’s chair. This was disclosed by Pityana in his affidavit.
Commenting on Pityana’s role on other boards, Charl Kocks, principal ratings officer at Ratings Afrika, which gauges governance in companies, municipalities and state-owned entities, said any company that is associated with Pityana will probably be looking very carefully at its reputational exposure.
The message from Absa’s actions to date is clear: ‘If you take on the regulator and exercise your legal rights, you will be punished and removed’
— Sipho Pityana
An inclination to litigate, on the basis that he was not happy with how he was treated, was not a strong recommendation for a director.
“As a director you are expected to take the rough with the smooth and not run to the court too easily. We have seen it before with Old Mutual — it generally does not work out very well with the individual unless the complainant is clearly aggrieved by issues like racism or misogyny. But simply for not being happy that somebody didn’t give you a job or withdraws a job or a function — that is not regarded highly.”
Old Mutual was involved in a legal battle with former CEO Peter Moyo, who was fired after a dispute related to Moyo's private financial interests.
The Public Investment Corp (PIC), which holds 14% in Redefine and also has shares in Absa, reiterated its position this week that it “will not be drawn into legal disputes between external parties where pending litigation has no bearing on the PIC. In instances where concerns arise about the conduct of investee companies, the PIC directly engages the boards of investee companies to resolve disputes.”
Cracks in the relationship between Pityana and the Absa board showed three weeks ago when it removed him as the lead independent director and as chair of the remuneration committee.
This week, it emerged that he was asked to resign early this month but refused, saying that doing so “would have meant succumbing to corporate bullying and intimidation tactics that should have no place in our society”.
In a strongly worded statement, Pityana said his statement that the PA may have acted unlawfully “is not one I make lightly. It is my view that a regulator that breaks the law sets exactly the wrong tone for respect for the rule of law; I say so having been a regulator.
“The message from Absa’s actions to date is clear: ‘If you take on the regulator and exercise your legal rights, you will be punished and removed’.”
Pityana argued that his legal rights were being curtailed.
In their answering affidavits, Absa and the PA denied his allegations about interference, saying he had never been formally put forward for the position of Absa chair.
The PA said it would appear that Pityana assumed that his nomination as chair of Absa was a fait accompli even before the board had taken a final resolution on the matter.
In court papers, Absa’s outgoing chair, Wendy Lucas-Bull, took issue with Pityana for not fully disclosing the sexual harassment matter he faced at AngloGold Ashanti. Pityana initially told Lucas-Bull about a “false sexual misconduct complaint” and said the complaint was unfounded and was part of a scheme to ensure his departure from the company. Pityana did not disclose that a senior advocate was involved in investigating the allegation, nor that there was a final report in which his version of events was rejected, Lucas-Bull said.
In court papers, PA CEO Kuben Naidoo said the AngloGold Ashanti investigation found that “there was sexual harassment on the part of Pityana and that his utterances and actions were inappropriate”.
Pityana has maintained that he was not found guilty of anything.
Kocks said: “The real meaning of governance is about demeanour, the way you act in life and in business. Sadly, it would seem like Pityana is on the side of those who could be criticised for their demeanour.”
He said companies have a duty to to be transparent with high-profile resignations instead of protecting the individual or the business.
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