EOH Holdings said two of its founders resigned in a board shake-up as CEO Stephen van Coller races against time to restructure the South African technology firm and calm investors and lenders.
The exodus, which saw four of EOH's seven directors quit, comes on the day the members were up for re-election at the Johannesburg-based company's annual general meeting.
It also comes after an anonymous complaint prompted Microsoft to abruptly cancel a contract, causing the shares to plummet.
Chair Asher Bohbot, the firm’s CEO for 19 years, will step down at the end of this month and remain on as an adviser until July 31, EOH said in a statement.
The other departures include Rob Sporen, also a founding member of EOH, Tshilidzi Marwala, a non-executive director who has served on the board for 11 years, and Tebogo Maenetja, the human resources executive director, who will leave at the end of April.
"EOH is refreshing the board," spokesperson Debbie Millar said by phone. "The board members that are leaving have been there for many years" and new directors will be appointed by the end of March.
The stock slid as much as 11% before paring losses to trade 4.2% down by 09:28 local time Wednesday. That extends losses this year to 55%, the biggest slump in the 164-member South African all-share index.
Van Coller, a former executive at Absa Group and MTN Group, was brought in last year to turn the troubled business around. He plans to break the company into different parts, to ensure investors see the full value of EOH, that consists of more than 270 companies.
EOH said in July it would split the company into two independent units, with its information, communications and technology business operating under EOH and the new NEXTEC brand focusing on industries such as technology for renewable energy, health and water sanitation.
The banker is aligning the firm closer to a code of good governance known as King IV, which recommends term limits for directors and that a former CEO shouldn't serve as chair until after a three-year cooling-off period.
Bohbot returned as chair when Sandile Zungu resigned after more than four years in the position in March last year.
EOH shares have plunged since Microsoft ended its association with the South African company. Johannesburg's TechCentral website reported that a whistle blower's allegations about a South African government software deal were behind the US software giant's decision.