Gordhan plans a PPC comeback

KETSO Gordhan is planning a comeback as chief executive of PPC after his shock resignation this week following a boardroom dispute.

KETSO Gordhan is planning a comeback as chief executive of PPC after his shock resignation this week following a boardroom dispute.

If shareholders back him in pulling off this coup it will make corporate history.

"I remain very committed to PPC - both its staff and shareholders - and would be happy to serve as CEO again ... but under the right circumstances," he said on Friday.

Gordhan would not comment on events that led to this week's dramatic announcement that he had quit as chief executive after less than two years. But he did say he was planning to meet fellow shareholders next week to discuss the possibilities.

However, one analyst remarked that getting the shareholders "to rescue the company" would be a difficult and fascinating challenge. "South African shareholders generally back the incumbent board and management even when it doesn't seem to be the right thing to do. They tend to shy away from taking dramatic action such as replacing most of the members of the board."

Gordhan would not be drawn on what the "right circumstances" might be, but the group's former chief executive, Paul Stuiver, confirmed mounting market speculation that a poorly functioning board gave Gordhan no choice but to quit.

It is likely that board changes will be needed for Gordhan to return . PPC chairman Bheki Sibiya referred questions to Azalo Lohan, head of investor relations at PPC.

"PPC won't be drawn on commenting on individuals' opinions. The board answers to its shareholders and is bound by governance procedures and principles when making decisions," said Lohan.

Stuiver, the CEO of PPC from 2008 to 2012, shed light on the controversial situation by describing the difficulties he had dealing with the board.

"I was very disappointed but not surprised when I saw what happened to Ketso [Gordhan]. I had similar problems with the PPC board. Unfortunately, at times it does not act in the best interests of the company. There seemed to be a lot of conflict within the board. It makes it difficult for a CEO to operate."

Stuiver also referred to problems he had with an executive director.

Before Gordhan's resignation, PPC had only two executive directors. The second was finance director Tryphosa Ramano, who joined the board in 2011.

"The only way to rescue this company from the board is for the shareholders to step in. The problem is the shareholders are often not aware of what is going on at the board," said Stuiver.

He said there had been no disagreement with Gordhan's ambitious plans for growth in Africa, and there had been a remarkable degree of support for his plan to reduce the pay gap. "There was huge support for it, even the executives who were affected by the freeze saw it as a worthwhile exercise."

Shareholders were clearly unhappy with Gordhan's departure, which sent the share price plummeting 7%. By the end of the week it had tumbled 9% to R29.75, wiping about R2-billion off PPC's market cap.

This knock also hit Gordhan, who over the past year has invested about R40-million of his own money in acquiring 1.4million shares. Analysts said this investment reflected his belief in his ability to meet his stated target of doubling the size and profitability of the company within five years.

The Sens announcement by the PPC board on Monday referred to differences of opinion between the board and Gordhan, specifically "regarding board procedures for the approval of certain decisions".

PPC's three major shareholders are Lazard with a 13% stake, the Public Investment Corporation (PIC) with 11% and Foord with 8.5%. The PIC did not respond to e-mailed queries. Foord and Lazard both said they did not comment on individual investments.

Chris Gilmour of Absa Wealth and Investment Management summed up most of the investment community's perspective on Gordhan's resignation. "I find it extremely disturbing. He is a very impressive individual, and when he arrived PPC was languishing. He got it moving."

Gilmour acknowledged that it was difficult to judge someone after two years in the job. However, he said: "He achieved an astonishing amount in that time. He should have had five to 10 years."