Latest news with #Pityana
IOL News
5 hours ago
- Business
- IOL News
High Court upholds Pityana's challenge against Sarb's authority in Absa's chair appointment
Having joined the Absa board in 2019 and elevated to lead independent director by June 2020, Pityana's career took a controversial turn after his resignation from AngloGold Ashanti in December 2020 amidst sexual harassment allegations, which he firmly denied. In a landmark ruling on Friday, the Pretoria High Court determined that the South African Reserve Bank (Sarb) and its Prudential Authority (PA) acted outside the bounds of the law in their objections to Sipho Pityana's appointment as chair of Absa Bank in 2021. This ruling marks a significant turn in a case that has highlighted the tension between regulatory authorities and corporate governance in South Africa. Pityana, who sought a declaratory order asserting the unlawfulness of Sarb's conduct, argued that their informal interventions breached established legal protocols. Pityana served legal papers to the PA citing that the authority blocked him from becoming chair of Absa bank by conducting an informal process and consulted with third parties, including former Absa bank CEO Maria Ramos, about whether he was 'fit and proper' for the role. This as the PA had raised concerns after Absa's succession committee identified Pityana as the sole candidate to succeed Wendy Lucas Bull, who was set to step down in March 2022. Absa instead appointed Sello Moloko as chairperson. Crucially, these discussions were meant to be separate from the formal procedures outlined in the Banks Act. Having joined the Absa board in 2019 and elevated to lead independent director by June 2020, Pityana's career took a controversial turn after his resignation from AngloGold Ashanti in December 2020 amidst sexual harassment allegations, which he firmly denied. This earlier controversy resurfaced when Absa later dismissed him from its board, contending that his decision to file suit against the PA constituted a breach of his duties as a director. The Absa Group and Absa Bank Boards removed Pityana as a director of the Boards, with immediate effect, in 2021 following a decision to remove him as lead independent director and chair of the remuneration committee. Judge Flatela Luleka, in his ruling, underscored that there was no credible evidence to dispute Pityana's assertion of being on track for the chairperson position at Absa. 'I conclude that [Pityana] was poised to be nominated for the chairperson position of Absa. There does not appear to be any credible evidence before me to gainsay this position,' reads the judgment by Judge Flatela Luleka. 'I am of the view that this matter raises a discrete legal issue of public importance that would affect matters in the future and requires the adjudication of this court, notwithstanding the mootness of the issues between the parties. The relief sought by the applicant is justified.' Neither the Sarb nor the PA were available for comment on Tuesday, and Pityana's phone ran unanswered. Pityana's legal battle extends beyond this ruling; he is also contesting his removal from the Absa board through separate legal proceedings. He asserts that the outcome of his current application could set important precedents for governance and the relationship between the PA and banking institutions in South Africa. The court concluded that this matter was of public importance, and its resolution could significantly influence governance structures in future, rendering the relief sought by Pityana justified despite the ongoing friction between the parties. BUSINESS REPORT
IOL News
5 hours ago
- Business
- IOL News
High Court upholds Pityana's challenge against Sarb's authority in Absa's chair appointment
Having joined the Absa board in 2019 and elevated to lead independent director by June 2020, Pityana's career took a controversial turn after his resignation from AngloGold Ashanti in December 2020 amidst sexual harassment allegations, which he firmly denied. In a landmark ruling on Friday, the Pretoria High Court determined that the South African Reserve Bank (Sarb) and its Prudential Authority (PA) acted outside the bounds of the law in their objections to Sipho Pityana's appointment as chair of Absa Bank in 2021. This ruling marks a significant turn in a case that has highlighted the tension between regulatory authorities and corporate governance in South Africa. Pityana, who sought a declaratory order asserting the unlawfulness of Sarb's conduct, argued that their informal interventions breached established legal protocols. Pityana served legal papers to the PA citing that the authority blocked him from becoming chair of Absa bank by conducting an informal process and consulted with third parties, including former Absa bank CEO Maria Ramos, about whether he was 'fit and proper' for the role. This as the PA had raised concerns after Absa's succession committee identified Pityana as the sole candidate to succeed Wendy Lucas Bull, who was set to step down in March 2022. Absa instead appointed Sello Moloko as chairperson. Crucially, these discussions were meant to be separate from the formal procedures outlined in the Banks Act. Having joined the Absa board in 2019 and elevated to lead independent director by June 2020, Pityana's career took a controversial turn after his resignation from AngloGold Ashanti in December 2020 amidst sexual harassment allegations, which he firmly denied. This earlier controversy resurfaced when Absa later dismissed him from its board, contending that his decision to file suit against the PA constituted a breach of his duties as a director. The Absa Group and Absa Bank Boards removed Pityana as a director of the Boards, with immediate effect, in 2021 following a decision to remove him as lead independent director and chair of the remuneration committee. Judge Flatela Luleka, in his ruling, underscored that there was no credible evidence to dispute Pityana's assertion of being on track for the chairperson position at Absa. 'I conclude that [Pityana] was poised to be nominated for the chairperson position of Absa. There does not appear to be any credible evidence before me to gainsay this position,' reads the judgment by Judge Flatela Luleka. 'I am of the view that this matter raises a discrete legal issue of public importance that would affect matters in the future and requires the adjudication of this court, notwithstanding the mootness of the issues between the parties. The relief sought by the applicant is justified.' Neither the Sarb nor the PA were available for comment on Tuesday, and Pityana's phone ran unanswered. Pityana's legal battle extends beyond this ruling; he is also contesting his removal from the Absa board through separate legal proceedings. He asserts that the outcome of his current application could set important precedents for governance and the relationship between the PA and banking institutions in South Africa. The court concluded that this matter was of public importance, and its resolution could significantly influence governance structures in future, rendering the relief sought by Pityana justified despite the ongoing friction between the parties. BUSINESS REPORT
The Citizen
14 hours ago
- Business
- The Citizen
Reserve Bank unlawfully interfered in Absa chair appointment, says court
Costs were awarded against the respondents, Absa and the PA. Sarb's Prudential Authority exceeded its powers by notifying Absa of its objections to appoint Sipho Pityana as chair. Picture: Moneyweb The South African Reserve Bank's (Sarb) Prudential Authority (PA) broke the law and exceeded its powers in raising objections to the appointment of Sipho Pityana as chair of Absa in 2021, the Pretoria High Court ruled on Friday. Costs were awarded against the respondents, Absa and the PA. Pityana had approached the court for a declaratory order, claiming the PA had acted outside the law by pursuing an informal process that interfered with his potential nomination as chair of the Absa board. He was appointed to the Absa board in 2019 and became lead independent director in June 2020. He had previously served as chair of AngloGold Ashanti from 2015 until his resignation in December 2020. A succession committee within Absa tipped him as the preferred candidate to replace the outgoing Absa chair, Wendy Lucas Bull, who was due to vacate the position in March 2022. Read more Manufacturing PMI falls to lowest level since April 2020 — bad news for GDP The succession committee then held informal engagements with the PA, which had started to look into the circumstances surrounding Pityana's resignation at AngloGold Ashanti. ALSO READ: PSA bays for Pityana's blood Sexual harassment allegations The case stems from accusations of sexual harassment against Pityana by an employee while he was serving as chair of AngloGold Ashanti, a charge he has steadfastly denied. Two investigations were carried out into the allegations, the first by AngloGold Ashanti, which was unfavourable to Pityana, and a second, commissioned by Absa itself, which found flaws in the first report for not considering corroborating evidence. Following its engagement with the PA, Absa decided not to appoint Pityana as chair. Pityana took the matter to court, arguing that the PA had acted outside the law and that he had been condemned as an unfit and improper person to hold the position. The informal process between the PA and Absa had also denied him a fair hearing, and should have been conducted under the procedural safeguards built into the Banks Act. ALSO READ: Absa fires Sipho Pityana as its lead independent director Proceed with caution Maria Ramos had been appointed chair of AngloGold Ashanti in December 2020, and was later contacted by Kuben Naidoo, the then deputy governor of the Sarb and CEO of the PA, to enquire about the circumstances surrounding Pityana's resignation from from the gold miner. Ramos advised Naidoo to submit a formal written request which would then be forwarded to Absa's legal team. Naidoo suggested that Absa share a shortlist of candidates with the PA to provide a 'comment or caution on the candidates to ensure that Absa did not go too far into the process before identifying a potential problem'. This was the informal process of that Pityana complained about, which appears to be the norm in the banking industry. Naidoo decided not to write to Ramos but call Lucas-Bull instead, advising that there were concerns over the manner in which Pityana resigned from AngloGold Ashanti, and urged Absa to thoroughly investigate the matter. Lucas-Bull relayed these concerns to Pityana, who said he was bound by confidentiality and non-disparagement agreements that limited his ability to discuss the specifics of his departure from AngloGold Ashanti. Pityana disclosed that there was a preliminary report on the sexual harassment allegations against him, which he disagreed with and had countered. AngloGold Ashanti decided not to take the matter further. ALSO READ: UPDATE: Sipho Pityana to drag Absa to court for sacking him from board Reputational risks Absa then commissioned a second report by senior attorney Peter Harris who found that the first report from AngloGold Ashanti failed to consider all the relevant evidence and was flawed in that it did not obtain corroborating evidence from independent sources. Absa nevertheless decided against the appointment of Pityana, fearing the reputational risks that could arise. Absa claimed that Pityana did not have a right or entitlement under the Banks Act to be nominated for the position of chair. 'I conclude that [Pityana] was poised to be nominated for the chairperson position of Absa. There does not appear to be any credible evidence before me to gainsay this position,' reads the judgment by Judge Flatela Luleka. 'I am of the view that this matter raises a discrete legal issue of public importance that would affect matters in the future and requires the adjudication of this court, notwithstanding the mootness of the issues between the parties. The relief sought by the applicant is justified.' Pityana is also challenging the legality of his removal from the Absa board in a separate case. This article was republished from Moneyweb. Read the original here.
