Absa removed me unlawfully from the board – Pityana

Written by Ciaran Ryan. Posted in Journalism

Absa says it took this step because Sipho Pityana had neglected or been derelict in his duties. From Moneyweb.

Image: Bloomberg
Image: Bloomberg

Sipho Pityana has fired back at Absa, saying the banking group “disappointingly and unlawfully” removed him from the Absa Group and Absa Bank boards on which he served – this after he refused to resign.

He added that he was given just 48 hours’ notice to resign as director due to legal action he had instituted against the Prudential Authority, claiming it had gone outside legal processes to block his appointment as chair at Absa.

Pityana 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.”

Absa on Wednesday said Pityana had been neglectful or derelict in his duties as a director.

Read:
Absa fires Sipho Pityana as a director (Nov 24)
The escalating woes at Absa as Pityana removed as lead independent director  (Nov 15)

This comes barely a week after Absa removed Pityana as lead independent director and as chair of the bank’s remuneration committee. Pityana recently filed a suit in the Gauteng High Court, claiming the Reserve Bank’s Prudential Authority had run an informal selection process which denied him possible selection as chairman of the Absa board. Also cited in Pityana’s court application is Absa.

Pityana was investigated over sexual harassment claims while chairman at Anglogold Ashanti (AGA), a position from which he resigned in December 2020. In his papers before the court, Pityana denies the sexual harassment claims and says the investigation at AGA was improperly conducted.

In a Sens statement released on Wednesday (November 24), Absa says the termination follows a meeting with Pityana in which he was provided an opportunity to address the Absa group and bank boards on the issue. “The boards considered Mr Pityana’s responses and came to their decision after extensive deliberation.”

In response to the Absa announcement, Pityana says the Absa boards “disappointingly and unlawfully” resolved to terminate his directorship of those boards in terms of the Companies Act. Pityana didn’t get the position of chair, which went instead to Sello Moloko, who replaces Wendy Lucas-Bull at the end of March next year.

“This arises out of my decision to take the Prudential Authority (PA) to court, which according to Absa, has created a material and sustained conflict of interests between Absa and me, amounts to a dereliction of my duties as director and led me to neglect [my] duty with due diligence and care in protecting the interests of Absa,” says Pityana.

“They believe that by bringing my application against the PA, I have implied that the Absa boards acted unlawfully because they participated in the PA’s conduct which I allege was unlawful. This is despite the fact that no relief is sought against Absa, and I have never stated or even implied this.”

Pityana’s termination comes a day after the Prudential Authority’s CEO and deputy governor of the Reserve Bank, Kuben Naidoo, filed his response to Pityana’s affidavit in which the latter asks the Gauteng High Court for a ‘declarator’ that the authority failed to follow the process for nominating a senior bank official as outlined in Section 60 of the Banks Act.

Naidoo denies Pityana’s claims and says the Absa board chose to engage with the Prudential Authority on any potential concerns it might have with potential candidates for chairperson. This was before any written submissions had been received by the authority. Naidoo says the interactions initiated by Absa are not unlawful, nor are they precluded by the Banks Act. Pityana makes clear in his affidavit that he is seeking a declarator from the court as a prelude to a potential claim for damages “as a consequence of (the authority’s) unlawful conduct.”

Firm stance

Pityana’s court papers lay out a sequence of events where AGA chair Maria Ramos is purported to have shared information about the sexual harassment investigation into Pityana at AGA. Pityana says the investigation did not call as witnesses bodyguards who corroborate his version of events.

In a statement release on Wednesday (November 24), Pityana says he was elected by shareholders who showed continued confidence in him when he was elected at the June 2021 annual general meeting. “Only in exceptional circumstances may the board remove one of its members, exactly in order to prevent such abuse. If I believed that such circumstances prevailed, I would have resigned without ever having been asked to do so.”

Pityana adds that he was proud to have led the transformation of Absa’s remuneration framework, which won it the 2020 SA Remuneration Award from the South African Reward Association, after having been the recipient of negative feedback from shareholders in prior years.

As an independent director of Absa, Pityana says he was required to bring independent thinking and perspective. Though Absa is cited as a respondent in his case against the Authority, Pityana says he has made no allegation that it acted unlawfully.

“The message from Absa’s actions to date – removing me as the LID (lead independent director) and Remuneration Committee – and removing me today as a director is clear: ‘If you take on the regulator and exercise your legal rights, you will be punished and removed’. This is unlawful because it discriminates against me and prejudices me for exercising my legal rights set out in the Constitution and the Banks Act,” Pityana says in his statement.

Ciaran Ryan

The Writer's Room is a curated by Ciaran Ryan, who has written on South African affairs for Sunday Times, Mail & Guardian, Financial Mail, Finweek, Noseweek, The Daily Telegraph, Forbes, USA Today, Acts Online and Lewrockwell.com, among others. In between he manages a gold mining operation in Ghana, and previously worked in Congo. Most of his time is spent in the lovely city of Joburg.