‘Pay back the money, Ketso’

Showdown looms as former boss says he won’t repay R5m

KETSO Gordhan’s bruising public battle with his former employer PPC is not over yet.

PPC chairman Bheki Sibiya told Business Times this week that the cement group would be asking Gordhan to give back the R5-million he was paid after he resigned unexpectedly last year over differences with finance director Tryphosa Ramano.

Gordhan’s departure spooked investors and caused a governance crisis healed only partly by this week’s AGM at which a new board was appointed. PPC’s share price has shed 34% since he quit, dropping to R21.40 this week.

Now it seems PPC wants Gordhan to pay back R5-million he was given when he left, supposedly for a “consultancy” deal.

Sibiya said that despite having struck the consultancy deal after quitting, Gordhan “wrote us an e-mail and said he has taken a unilateral decision not to tender his services”.

“We accepted that. So we are going to want him to refund the company for the prepayment [of R5-million] we gave to him,” he said.

Sibiya said the deal was struck only because PPC’s international team asked that he continue to provide “consultancy services” for countries where the company was expanding.

But there is no mention of any “consultancy” agreement in PPC’s annual report.

The report says that Gordhan was paid R21.7-million last year, including R5-million “notice pay” which incorporated a restraint of trade; another R5-million for another “restraint of trade”; and R6million for his share awards.

Contacted this week, Gordhan said he had “no intention to pay back any money” — which suggested a showdown was looming.

He said his payout was for a twoyear restraint of trade, and “consulting in the Africa projects was a gesture of goodwill. I am under no obligation.”

Instead, Gordhan said he planned to use that money to fund a housing scheme to benefit PPC employees.

“I do not want that element of the money for myself. I am a financially independent person,” he said.

This suggests that, although this week’s AGM was meant to draw a line under the bust-up of the last few months, the clash is likely to continue.

This spat over pay raised new questions about a board that has been branded as “dysfunctional”.

Remarkably, only 51% of PPC’s shareholders voted to approve the remuneration policy. It is a nonbinding vote, but nevertheless an important indicator of shareholder sentiment.

At the AGM, six new directors were appointed, which brought a better skills balance to the board. But the unexpected reappoint-

MY WAY: Ketso Gordhan ment of Ramano as finance director has raised concerns about continued boardroom dysfunctionality.

Prolonged tension between Gordhan and Ramano, who is described as having good financial skills but poor interpersonal ones, were behind Gordhan’s decision to resign.

So central was Ramano’s role in PPC’s boardroom difficulties that activist shareholders — including Foord Asset Management and Visio — insisted on her resignation from the board as part of a “settlement” agreement.

In addition to Ramano’s resignation from the board, the activists nominated six candidates for the board. Chairman Bheki Sibiya said he would resign from the board as soon as “stability has been re-established”.

But not only was Ramano reappointed at the first board meeting on Tuesday after the AGM, but Sibiya said he too would retire only at next year’s AGM.

And, after a spate of withdrawals, only one of the activists’ candidates made it to the board — suggesting their efforts to hold the board to account have yielded little for four months of work.

One of the activists said Ramano’s reappointment was not surprising because “the board must be respectful of Ramano’s rights”.

Still, Patrice Moyal of Visio, one of those activists, described the new board as “good”.

“They have issues they must deal with. We must wait and be patient and let management get on with the business,” he said.

At Tuesday’s board meeting, newly appointed CEO Darryl Castle recommended Ramano’s reappointment to the board. Sibiya said this recommendation was unanimously supported.

Said Sibiya: “The appointment of Ramano vindicates the board’s stance in the months before the AGM: that Ketso Gordhan was wrong and Tryphosa Ramano was right.

“There’s no law [that Ramano] has broken, no offence committed. She needs to be given the space to do the job for which she was employed,” he said.

Tito Mboweni, one of the newly elected directors, has been tipped as most likely to succeed Sibiya.

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