The suspended CEO of coal miner Exxaro, Nombasa Tsengwa, has questioned the objectivity of an independent investigation by law firm ENS into allegations against her of corporate bullying.
Responding to questions from Business Times, Tsengwa's lawyer Eddie Claasen on Friday said his client would soon “expose the agenda being served by her unjust suspension”.
“She has little confidence in the objectivity of the investigation, which ENS, who also act as Exxaro’s attorneys, are presently conducting. That too shall be revealed in the fullness of time,” said Classen.
This argument was also advanced in the high court in Pretoria, where Tsengwa sought to have the suspension overturned and described the ENS investigation as a witch hunt.
Tsengwa was placed on precautionary suspension pending the outcome of an independent investigation into allegations related to workplace conduct and governance issues.
Several former Exxaro employees accused the president of the Minerals Council South Africa and deputy chair of the Energy Council of having instilled a culture of fear at the company. At the time of her suspension, nine top executives had either quit in frustration, been fired or placed on suspension.
One of the executives who resigned described working under Tsengwa as “the most horrifying time of my career at Exxaro”.
Following her suspension, the board appointed Sandton-based based law firm ENS Africa to conduct an independent investigation into the allegations. It's understood that employees who have made allegations against her and those who support her have been called to testify before the inquiry.
Business Times was also informed that the board attempted to enter into an out-of-court settlement, offering the CEO millions of rand to quietly leave.
But Claasen said his client did not attend any meeting where such an offer was made. “Neither Dr Tsengwa, nor I, attended a meeting at Exxaro’s office on Wednesday, neither were we invited to attend any such meeting. It is rather curious that such an untruth is being advanced to the media.”
On Thursday Tsengwa was at the North Gauteng High Court arguing for the suspension to be lifted and for the matter to be heard on an urgent basis.
Petrus Louw SC, on behalf of Tsengwa, told judge Mncedisi Khumalo the board was “misguided” and the suspension was unlawful and should be overturned.
He argued the board had no power to suspend Tsengwa given there was no pending disciplinary process. He said the company’s constitution and the memorandum of incorporation (MOI) made no provision for the suspension of a CEO.
He said the CEO was not an employee but an “organ” of the company, and therefore ordinary disciplinary processes did not apply to the holder of the top office. Louw said she could only be suspended if disciplinary charges were imminent.
Exxaro does not have the power to suspend its CEO. It did something it is not entitled to do
— Petrus Louw SC, on behalf of suspended CEO Nombasa Tsengwa
“It's black or white, and no grey; either they have the power, or they do not have the power. Exxaro does not have the power to suspend its CEO. It did something it is not entitled to do.
“What can a board do if they don't like the CEO? They terminate the CEO's appointment, but they cannot suspend the CEO because if they suspend [her] who can manage and control the company? There is no provision made for the acting CEO or anything else. The board can only appoint and remove; it is a light switch, it is on or it is off, you don't suspend it. You don't give someone a torch; you can't have that. It is the CEO or it is not.”
He described the ENS investigation as a witch hunt and said an internal letter Tsengwa wrote to staff after the publication of the story in Business Times had triggered a strong reaction from board chair Geoff Qhena. In the letter, she proclaimed her innocence and told employees the board had conducted an internal investigation after an earlier complaint from an anonymous whistle-blower and found no wrongdoing on her part.
“In plain language, this is a witch hunt. We show you the person, you find the crime. You will get her personal effects, whatever they might be; devices, computers and telephone, etc. You will look through them and find something," Louw said
“If you don’t like the CEO, you remove the CEO but you cannot interfere and tell the CEO which letters the CEO must write and not write. That is not the job of the chair.”
Louw said the suspension of Kgabi Masia, the head of coal operations who was served with a letter while on a work trip to Switzerland, led to Tsengwa offering to resign.
He accused Qhena of having overstepped his powers.
“You have a rogue board and a rogue chair who stops the appointed CEO, an organ who is trusted by the constitution to run the company, from doing the job.
“What we have here is friction between a chair and CEO where there ought to be no friction whatsoever. I say again, if there is a charge that the applicant committed a serious offence, not parking in the wrong spot, we would have understood.”
Terry Motau (SC) for Exxaro argued the matter was not urgent, saying the suspension would not continue for much longer because the ENS investigation was expected to conclude on February 15.
“We are talking about a period of two weeks. So, in two weeks the applicant is going to know whether she has been exonerated. Between now and February 15 she has 100 people who will support her version in the investigation process, which will assist the findings of the investigation. If she has a case to answer she has 100 witnesses to testify in the disciplinary inquiry as to why she should not be found guilty.” He was referring to an online petition signed by 129 employees who pledged support for Tsengwa.
He said there were no grounds for the argument premised on the disciplinary code as the code and procedure applied to all employees of Exxaro.
“A disciplinary code is a guide; it applies to all employees, and it provides for the suspension of employees.”
Motau said a person who is employed as an executive director and who, by virtue of that position is also a board member, is both a director of the company and — as CEO — they are also an employee and are governed by the Labour Relations Act.
Claasen told Business Times they had full confidence justice would be done,
“This matter concerns not only private interests but also the interests of the public at large. Exxaro's shareholders include the PIC (Public Investment Corporation) and the IDC (Industrial Development Corporation), which to some extent represents the interests of government and, accordingly, the taxpayer.”
An Exxaro spokesperson said if the company receives allegations or identifies issues related to conduct, performance or governance it will conduct a thorough and independent investigation in line with its values and policies.
“The board has taken independent legal advice on this matter and stands by its decision to suspend the CEO to allow for an independent investigation to be properly conducted. This process has been handled transparently, fairly, and legally; and Dr Tsengwa has been engaged throughout this process. The board was duly constituted and unanimously decided to suspend the CEO.
“The board has acted reasonably and in good faith throughout this process. It has opposed Dr Tsengwa’s urgent court application on several grounds including that it does not meet the standard for urgency and should fail on this basis alone.
“The CEO, as a matter of fact and law, reports to and is accountable to the board. Accordingly, the board has the full right and authority in terms of the law and the company’s MOI to issue a precautionary suspension of the CEO pending an investigation as this protects the integrity of the investigation,” the spokesperson said.
Judgment on whether the application is urgent has been reserved for Monday.
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