'Disappointed' Sipho Pityana takes Absa to court for firing him from board

24 November 2021 - 11:31 By THABISO MOCHIKO
Former Absa director Sipho Pityana has described his firing as disappointing and unlawful, and is going to court. File photo.
Former Absa director Sipho Pityana has described his firing as disappointing and unlawful, and is going to court. File photo.
Image: Simphiwe Nkwali

Sipho Pityana, who was fired from Absa's board after refusing to resign, will take the bank’s decision to court. 

On Wednesday morning Absa announced that Pityana, who joined the board in May 2019, would cease to be a director of the Absa Group and subsidiary boards with immediate effect.

Pityana described this as “disappointing and unlawful”, and said he had “instructed my legal team to take the decision of the boards to terminate my directorship on review with the courts”.

Absa said that through his conduct, Pityana had neglected or been derelict in the performance of his functions. This comes two weeks after the board removed him as lead independent director and chair of the remuneration committee.

Absa's move follows Pityana’s decision to take the Reserve Bank’s prudential authority (PA) to court for alleged interference in his nomination as chair of Absa, a claim the Reserve Bank denied in its answering affidavit. It said Pityana was never nominated by the Bank.

In his statement released on Wednesday morning, Pityana said: “My reading of the reasons for the board’s resolution is that my alleged neglect or dereliction of the performance of my functions all comes down to the fact that I took, or had the temerity to take, the PA to court, seeking a declaratory order that its conduct was unlawful, and I addressed the media about this application and my reasons for believing the PA’s conduct was unlawful.”

Pityana said that, according to Absa, his decision to seek a declaratory order against the PA “has created a material and sustained conflict of interests” between him and Absa; amounts to a dereliction of his duties as director; and led him to neglect his duty of due diligence and care in protecting the interests of Absa. He said the board believes that by bringing the application against the PA, Pityana implied the Absa board acted unlawfully because it participated in the PA’s conduct, which he alleged was unlawful. This is though no relief is sought against Absa, and “I have never stated or even implied this”, said Pityana.

The bank, according to Pityana, believes the litigation against the PA “has occasioned negative publicity for the institution, which has caused reputational risk and harm”.

At issue is an allegation of sexual harassment made against Pityana, which he has denied, while he was chairperson of AngloGold Ashanti (AGA). Pityana resigned as AngloGold chair in December, but the allegations surfaced when the Absa board began its process to nominate a new chair.

For those who may be desperately looking for an example of ‘another black failure’ in the corporate boardroom, this is not one.
Sipho Pityana

The PA said in its court document that it did not tell Absa through an informal process that it would object to Pityana’s nomination.

Rather, it said: “The authority continued to assert that the allegations of sexual harassment and the findings in the Barnes report [commissioned by AngloGold Ashanti into allegations of sexual harassment against Pityana] were serious concerns the Absa board must deliberate on, including its potential impact on Absa’s reputation.”

In court papers filed with the high court in Pretoria, Kuben Naidoo, CEO of the PA, said the AngloGold Ashanti investigation found “there was sexual harassment on the part of Mr Pityana and that his utterances and actions were inappropriate”.

Pityana said he was asked to resign from the board on November 2 because his court action against the PA had resulted in a misalignment of interests between those of the bank and his.

He refused to resign because to have done so “would have meant succumbing to corporate bullying and intimidation tactics that should have no place in our society”.

Pityana said he was elected by shareholders who showed “confidence” in him.

He said it is demonstrably clear his removal from his roles as the lead independent director and chair of the remuneration committee had nothing to do with competence or performance.

“For those who may be desperately looking for an example of ‘another black failure’ in the corporate boardroom, this is not one. The board, in its wisdom or lack of it, never made public the reasons for its decision to remove me from these roles, as it is required to do. So much for transparency.

“Only in exceptional circumstances may the board remove one of its members, exactly to prevent such abuse. If I believed such circumstances prevailed, I would have resigned without having been asked to do so,” he said. 

While the board asserts that his interests and those of Absa are misaligned, they have “not advanced any plausible reason for their view”. Pityana said there is no misalignment because he has not sought any relief against Absa, nor has he sought to interdict Absa’s nomination or its appointment of a new board chair.

“I have accepted his appointment.”

Absa has appointed Sello Moloko as chair to replace Wendy Lucas-Bull.

In its answering affidavit, Absa’s outgoing chair Wendy Lucas-Bull denied improper influence by the PA. She said the board did not “supinely react to the concern” from the PA by terminating all consideration of Pityana for the position. Instead, the subcommittee tasked with the appointment of the chair worked with her to investigate the issues that had been raised.

Absa was cited as the respondents in Pityana’s court action against the PA.

Lucas-Bull said Pityana had placed himself in an “adversarial position” to the PA in a matter that was personal to him, “had utilised an adversarial tone in his correspondence with the authority and did not seem to appreciate the difficulty with that approach”.

“He also ignored — on two occasions — my request, as chair of the Absa board, not to engage in such an approach with the authority.”

She said that though the view of the authority was an important factor in the ultimate decision of the Absa board not to support Pityana's candidacy, there was a host of other factors.

“It was Pityana's reaction to the authority, the way in which he answered the questions put to him, coupled with his prior lack of candour with the subcommittee, that led the Absa board to the ultimate conclusion that Pityana's candidacy could not be supported.”

Lucas-Bull said there was a lack of transparency regarding the circumstances of his departure from AGA, the fact that he did not choose to vindicate himself by remaining on the board of AGA until the complaint against him had been finally resolved, and that Pityana “now chooses to focus his attention on the authority and Absa, rather than addressing the source of the reputational risk”.

“It is problematic that Pityana made the choice not to pursue the matter to conclusion at AGA,” she said.

She also said the proposal of Pityana as a candidate for the chair position would likely result in an objection by the authority which would create a reputational risk for both Absa and Pityana. It was therefore not in the best interests of Absa to propose Pityana.

The relief sought by Pityana, according to Lucas-Bull, has significant consequences for Absa.

“It is incorrect to suggest that Absa has merely an 'interest' in the matter. The declarator sought, if granted, would be an indictment on Absa and its conduct. From Absa's perspective, the relief sought implicates it in conduct which is potentially unlawful,” she said.

Business Times


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