Is Ketso back in favour?

2014-11-02 15:01

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Former PPC chief may be on his way back after company calls special meeting with a view to sacking the board

Former PPC boss Ketso Gordhan might be a step closer to getting his job back after the company agreed to hold a special meeting to consider the election of a new board.

The company said on Friday it had received a request from three shareholders, understood to be – Foord Asset Management, Visio Capital and Old Mutual, who collectively hold more than 10% of the shares – to call the meeting where they will consider the removal of the entire board and its replacement.

The meeting will take place next month.

Foord’s Carolyn Levin said: “We have nominees for the board, but I can’t say who they are.”

Gordhan is reportedly on the list.

“I think this is a positive development,” said Gordhan. “Shareholders have the right to ensure the board is looking after its interests.

“I will be honoured to serve PPC in any way the shareholders or board feel I can.”

But the minority shareholders face a big challenge: the Public Investment Corporation, which holds about 11.6% of the shares, has publicly said it supports the current PPC board after it dug in its heels following Gordhan’s resignation after his fallout with the board two months ago.

The PPC boardroom battle began at the end of last month when Gordhan resigned after the board failed to support him in axing an obstructive senior manager, believed to be financial director Tryphosa Ramano.

He handed in his resignation and then retracted, but the board refused, prompting an 8% drop in the share price.

The share price has not recovered since, but went up above 5% on Friday ahead of the late-afternoon news from PPC.

At the time of his resignation, Gordhan indicated he would fight back. “I have received significant feedback from shareholders, as well as colleagues,” he said at the time. “I feel encouraged to engage in some shareholder activism,” he added, suggesting that he might try to rally other large shareholders to act against the board.

Gordhan is the largest individual shareholder in PPC and holds about 1.4?million shares. However, between Gordhan and the three shareholders, it seems unlikely there will be enough shareholder support to change the board and reinstate Gordhan.

Since becoming CEO last year, Gordhan took a salary cut of R1?million and encouraged another 60 senior employees at PPC to forgo increases to fund a higher wage increase for the lowest-paid PPC employees.

He has also been an outspoken critic of high cement prices across Africa and has vowed that PPC’s planned new cement plants in Rwanda, Ethiopia, Zimbabwe and Algeria would drastically reduce the cost of the most basic construction projects.

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