Sipho Pityana takes legal action against Absa over board removal

22 December 2021 - 19:02 By Business Times
Sipho Pityana
Sipho Pityana
Image: Dorothy Kgosi

Sipho Pityana, former lead independent director of Absa, has initiated legal action against the group , saying that his removal from the board of directors last month was punishment for challenging the Prudential Authority.

In a statement issued on Wednesday, Pityana said he had applied to the North Gauteng High Court for a ruling that the removal was irregular and requested compensation for this breach of the Companies Act.

Pityana either wants to be reinstated as a director or awarded “just and equitable compensation”.

Absa spokesperson Phumza Macanda confirmed on Wednesday evening that the bank had “received notification of Mr Pityana’s application”.

“Mr Pityana has a right to take the board’s decision on review in terms of section 71 of the Companies Act. We have no further comment at this stage,” she said.

Pityana was removed from the Absa board in November after he launched legal action against the SA Reserve Bank’s Prudential Authority (PA), alleging it had interfered in his candidacy for the position of chair of Absa.

It emerged through court papers that Pityana had resigned from his position at AngloGold Ashanti in December 2020 after allegations of sexual harassment, which he has denied.

These allegations surfaced during the Absa board process to nominate a new chairperson, for which Pityana was initially a strong contender. 

Pityana said in his statement on Wednesday that Absa, in removing him from the board, alleged he had neglected his functions as a director or had been derelict in performing his duties.

“There is no basis at all for this decision. On the contrary, it is clear from the events leading up to my removal that I am in effect being victimised for legitimately exercising my rights.

“It is my firm belief that Absa removed me from the board as punishment for applying for a declaratory order against the SA Reserve Bank’s PA over its interference in my nomination as chairperson of the Absa board,” Pityana said. 

This application is still before the courts. 

It was previously reported that in court papers the PA said 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 that the Absa board must deliberate on, including its potential impact on Absa’s reputation.”

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

In separate 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. 

Pityana said on Wednesday “the decision to challenge the PA was not taken lightly. But it was necessary to protect my own reputation, as the PA took its decision without providing me with an opportunity to defend my name.”

What is clear, though, is that the PA application has now served as a trigger for Absa to remove me from its board ... the Absa board believes my application against the PA has caused a conflict between my own interests and those of Absa. I strongly dispute this. I believe Absa has demonstrated a fundamental misunderstanding of my application against the PA.”

“I also deny that there has been any conflict between my own interests and the interests of Absa,” Pityana said.  

“I firmly believe that my removal was motivated by a desire to punish me for challenging the lawfulness of the PA’s conduct. This is not a valid basis for the removal of a director in terms of section 71(3) of the Companies Act, and I intend to ensure that justice prevails,” Pityana said. 

Business Times