S.Africa’s PPC taking legal action against former CEO - CNBC Africa

S.Africa’s PPC taking legal action against former CEO

Southern Africa

by Reuters 0

Sibiya says in terms of Gordhan being a delinquent director, PPC is taking legal action. PHOTO: Citizen

This is after he made comments the board considers defamatory, PPC’s chairman said in a television interview on Wednesday.

The acrimonious public row between PPC and former chief executive Ketso Gordhan has undermined investor confidence in the company and become one of South Africa’s biggest corporate spats in recent memory.

(READ MORE: S.Africa’s PPC shareholders to consider board overhaul)

“In terms of him being a delinquent director, we’re taking legal action. We’re not going to be hasty about it, but we’re going to do a thorough job,” Chairman Bheki Sibiya told CNBC Africa.

Gordhan resigned from PPC in September over the board’s refusal to back his decision to fire a senior executive. He later rescinded the resignation but the board declined to reinstate him.

He has since launched a public campaign to return to the company as either a board member or chief executive, and to have the board reconstituted.

Gordhan told Reuters in an interview on Tuesday his exit could cost PPC a 200 million dollar loan from a development finance institution, which he did not name.

The board retaliated with a statement on Wednesday, saying the assertion was “factually unfounded and damages the image of the company”, adding that Gordhan’s recent comments were “defamatory”.

[DATA PPC:PPC]’s share price has fallen 13 per cent since Gordhan’s departure.

Gordhan said on Tuesday he has the backing of three shareholders who have called for a general meeting next month that could see the board reconstituted.

He has said the spat started after he was “undermined” by the senior executive, whom he tried to fire.

On Wednesday the board identified the executive as CFO Tryphosa Ramano, adding that Gordhan had sought to fire her for five reasons, including that her office was bigger than his.

Additionally, Gordhan wanted to fire her because she refused to join other senior executives in taking salary freezes to close the wage gap between workers and management, the board said in a statement.

“The board was of the view that the reasons advanced by Mr Gordhan were not substantive and did not warrant the termination of the CFO,” it said, adding it remained committed to appointing a new chief executive as a matter of urgency.

Gordhan was not immediately available for comment.

(READ MOREPPC acquires additional 20% stake in Ethiopia’s HCSCo)

Separately, the company said on Wednesday it had lifted its stake in Ethiopia’s Habesha Cement to 51 per cent, after acquiring 20 per cent from South Africa’s Industrial Development Corporation, a state-run finance institution for 13 million dollars.

The deal makes PPC a rare foreign firm with a majority stake in an Ethiopian company.

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