Gordhan set for fight over PPC leadership

By Nick Hedley

Ketso Gordhan‚ who resigned as CEO of PPC (PPC) effective a week ago‚ is gearing up for a battle for his reinstatement‚ lining up a series of meetings this week with shareholders to build support.

PPC said last Monday that Mr Gordhan had resigned “due to differences of opinion with the board regarding board procedures for the approval of certain decisions”. But Mr Gordhan said in an interview on Sunday that he resigned because he had lost confidence in PPC’s board after it prevented him from dismissing a senior executive he believed was “undermining” the company’s strategy.

The purpose of this week’s meetings is for Mr Gordhan to garner support among shareholders to back him in forcing the PPC board to return him to his former position. This could put investors in conflict with the board‚ leading potentially to a shareholder revolt in favour of Mr Gordhan.

Before his resignation‚ the company had only two executives — Mr Gordhan and finance director Tryphosa Ramano.

Mr Gordhan resigned on Friday September 19 but said he met the board late that weekend‚ “where I explained in detail why I wanted to retract my resignation”. The board declined and the announcement of his resignation was made the next day.

His reasons for wanting to stay included seeing through various employee initiatives he started‚ together with what had become a “more tangible” African expansion strategy which needed continuity‚ and his belief that he was “the right person for the job”.

According to Mr Gordhan‚ he was paid a R10m settlement fee as part of his resignation‚ although he had put the money into a trust account for PPC employees and would use a small portion of it for his “shareholder activism”.

After being appointed CEO in January last year‚ Mr Gordhan announced several large deals elsewhere in Africa and cut his pay from 120 times that of PPC’s lowest-paid worker to 48 times.

PPC’s shares lost 8% last week‚ with some analysts citing concerns about continuity and the effect on the implementation of projects elsewhere in Africa.

“Managing the execution is all about having the right relationships on the continent — unfortunately for the business‚ I still hold most of them. I told the board they can’t take me out and expect that the risk profile of those projects will remain the same‚ and I said the newer projects are going to be scuppered.”

Mr Gordhan also recently implemented a new black economic empowerment deal that gave employees 12% share ownership in the company. “Seeing it through is where the real shareholder value is going to be created‚ and one of the shareholder groups that I’m very passionate about is the employees. If we’re successful in doubling the size of the business workers stand to make north of R1.5bn by 2019.”

He said he had not spoken with the board since his resignation‚ “but I am actively engaging with shareholders — I have a series of meetings lined up ... for Tuesday and Wednesday”. Some of these were at the request of the shareholders‚ while he had also sought to meet other significant investors — specifically those with more than a 1% stake in PPC.

Mr Gordhan said he had no intention of pursuing other positions or of selling his 1.4-million directly held shares in PPC‚ worth about R42m on Friday.

He said the board required “stronger representation” and that shareholders could put forward recommendations for vacancies in areas such as governance‚ industry representatives‚ and finance.

“There’s an AGM (annual general meeting) in January where I think we could make normal rotational changes to the board. Over a six-month period‚ I think you can very successfully create a more stable environment.”

Former CEO Paul Stuiver told Business Times he had “had similar problems with the PPC board”. “At times it does not act in the best interests of the company. There seemed to be a lot of conflict within the board. It makes it difficult for a CEO to operate‚” Mr Stuiver said.

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