Former PPC CEO Ketso Gordhan
Cement producer PPC has set December 8 for holding a general meeting to consider the proposed removal of the entire board of the company, as well as the proposed election to the board of certain other persons.
The company had resolved to convene the meeting following a requisition from shareholders Foord Asset Management, Visio Capital Management and Nedbank Private Wealth, which together held 10.36% of PPC’s shares.
In terms of the request to remove all current directors, the requisitionists had stated that “the current board needs to be replaced with a functional board with the correct expertise to run the company. This needs to be done as soon as possible in order to restore continuity to the operations and strategy of the company and is in the best interest of all stakeholders including shareholders and employees”.
PPC strongly denied the allegation that its board was “not functional” adding that, as no detail had been given of the respects in which the requisitionists alleged that the current board was not functional, it was impossible for the board to give a specific response to this general allegation save to say that the board was carrying out its duties appropriately and fully.
Further, with regard to the statement that the current board did not have the “correct expertise to run the company”, PPC said the individual board members had multidisciplinary skills, which were complementary and led to robust and effective board deliberations.
“The board has always carried out its duties with due care, skill and diligence, being cognisant at all times that its duty is to do what is in the best interest of the company as a whole,” PPC said.
The cement producer also strongly denied that there was “no continuity as regards the strategy of the company” and stated that it would clearly not be in the interest of all stakeholders to lose the entire institutional memory of the board members.
Meanwhile, the company said it understood that, should the removal of the board take place, the intention was for former PPC CEO Ketso Gordhan, who had resigned in September, to be reinstated.
“The current board unanimously maintains that Gordhan should not be reinstated in his position as CEO,” PPC noted, stating that the trust relationship between Gordhan and the board had finally broken down.
“The CEO’s resignation in September was the second occasion in his 20-month tenure that he had threatened to resign and resigned. This breakdown in trust was further exacerbated by the behaviour of the former CEO, particularly his disregard for complying with the terms of his resignation agreement immediately following his resignation,” the company stated.
It further said that, by running a “self-serving media campaign” to be reinstated as the CEO, he had not acted in the best interests of the company, nor had he complied with his continuing fiduciary duties as a former director.
For the resolution to replace the board to be passed, votes in favour of the resolution had to represent more than 50% of the voting rights exercised at the meeting.