The board of coal miner Exxaro, which has placed CEO Nombasa Tswenga on suspension, was in overdrive on Thursday explaining reasons for the drastic move to staff and shareholders.
Tsengwa, who is also president of the Minerals Council South Africa, was placed on precautionary suspension two weeks after Business Times reported that nine executives had left the company since her appointment, either through dismissal, suspension or resignation, many citing a culture of fear created by the CEO.
She has also been accused of failing to implement an existing strategy for Exxaro to diversify from coal.
It is understood that an e-mail Tswenga wrote to employees, claiming that an independent law firm had cleared her after an anonymous whistleblower wrote a letter of complaint to the board, had angered many of the non-executive directors. According to insiders, the board had first written to the CEO asking her to provide reasons why she should not be suspended.
At a meeting with staff at Exxaro's head office in Centurion on Thursday — also beamed through a virtual link to employees at mining operations in other provinces — chair Geoffrey Qhena is said to have hinted that the board wasn't aware of such an investigation.
“He [Qhena] said [the board] knew nothing about employees reporting her to them,” said a senior manager who was at the meeting.
But responding to questions, Exxaro's investor relations manager, Sonwabise Mzinyathi, said a complaint was investigated by an independent law firm in July, which concluded that the allegations could not be proven.
“The current investigation, which gave rise to the suspension, relates to a new and separate allegation, which the board is dealing with as set out in our Sens [Stock Exchange News Services] announcement,” Mzinyathi said on Friday.
The current investigation, which gave rise to the suspension, relates to a new and separate allegation, which the board is dealing with as set out in our Sens [Stock Exchange News Services] announcement
— Exxaro's investor relations manager, Sonwabise Mzinyathi
“The board takes any such allegations and resultant investigations very seriously, but makes no presumption as to its conclusion. Our intention is to conclude the investigation as quickly as thoroughness allows. The board believes this decision is in the best interests of both the company and Dr Tsengwa.”
Qhena told employees he would be meeting shareholders the same afternoon because they were asking questions.
In the e-mail to staff on Monday, Tsengwa said the board had expressed full confidence in her leadership to execute the group’s sustainable growth and impact strategy, at the centre of which was the need for the coal miner to diversify its portfolio through acquisitions. The company has a R12bn-R15bn cash pile.
“I have served the Exxaro family with humility and dignity for more than 21 years with an unblemished record, working in many different roles. Therefore, I am committed to continuing to serve the interests of our shareholders, stakeholders and you, our employees; fostering a healthy culture within the organisation while striving to set very high performance standards,” she wrote.
Two days later, the board placed her on suspension pending the outcome of an independent investigation into allegations related to workplace conduct and governance practice, the company said on Wednesday.
“While on suspension and for the duration of the investigation, Tsengwa will step back from all executive and board duties. The independent investigation will be conducted by a reputable law firm, ENS,” the statement said.
Riaan Koppeschaar, Exxaro's director of finance, has been appointed acting CEO.
An insider who attended the meeting on Thursday said staff members were unhappy with the contradictory public positions adopted by the board and the suspended CEO.
“Employees were asking, 'What’s the truth here? Are these new allegations? Are you resuscitating the old ones?' He [Qhena] sidestepped it; he said it was a precautionary suspension and the company needed to be careful as the allegations were still under investigation.”
The source said employees were concerned about the psychological impact on them of the goings on at Exxaro.
“They live in fear, nothing feels safe any more for them. They asked if he [Qhena] could please, as chairman, seeing as how he invited them to the meeting today, talk to them before they hear it from the media. They asked if he could please call them back for feedback and address them,” the source said.
Business Times reported how nine executives had resigned in frustration or were suspended since Tsengwa took over in August 2024. Things came to a head when the head of coal operations, Kgabi Masia, was dramatically suspended while on a work trip to Switzerland.
The executives who have left since Tsengwa assumed the top office include Vanisha Balgobind, former executive head of human resources; the person who replaced her in an acting capacity, Hemuna Bhola; and Roland Tatnall, who was the MD of Cennergi, the group’s renewable energy business.
Others who resigned are Alex de Angelis, executive head of strategy; Bathabile Ponu, the chief internal auditor; and Louis Retief, executive head of information management.
Andiswa Ndoni, the company secretary, is on suspension. Ling-Ling Mothapo, the chief investor relations officer, has been placed on gardening leave and it is not clear if she will return to work.
One of those who resigned described it as “the most horrifying time of my career at Exxaro”.
“The way she [Tsengwa] was leading and managing was against my value system. She was disempowering and controlling. She did not want to stand by governance practices and we continued butting heads about what was right.
“Every day was a different story. I took the decision to resign; I just could not work with her. It was the most horrifying time of my career at Exxaro,” the former senior manager said.
Another executive who left in frustration also questioned Tsengwa's statement that she had been cleared by an independent law firm.
“How can you be cleared? There were no interviews to ask the people who left. No forensic ([investigators] or board member interviewed a single person who had left Exxaro. Who did [they] speak to? If you say forensics have cleared you, based on what? Is it not feedback? You are not going to find fear written on a piece of paper, you are going to find it by talking to people and understanding what is going on,” said the source.
But someone who's privy to Exxaro issues and is sympathetic to the CEO accused the chair of targeting her.
“The way he handled this case leaves so much to be desired. She has served for two years, and the company did not fall apart in the two years. There were no complaints of incompetence.”
The executive, who asked not to be named, said there was nothing wrong in the e-mail Tsengwa wrote to staff members. “If you feel you need to allay the fears of your staff members, there is nothing wrong with that.”
The Government Employees Pension Fund (GEPF), a significant shareholder, said the Exxaro board had a fiduciary responsibility to act in the best interests of the company, to ensure that corporate governance standards were adhered to, and to maintain the trust of shareholders.
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