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CoA Dismisses PEEPA’s Bid to Block its ex-CEO’s Appeal

mm by Kabelo Adamson
March 15, 2023
in News
Reading Time: 3 mins read
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Moumakwa wins against PEEPA
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  • Says last remaining director formed a quorum

The Court of Appeal (CoA) has dismissed with costs a bid by the Public Enterprises Evaluation and Privatisation Agency (PEEPA) to block its former CEO Obakeng Ezekiel Moumakwa’s appeal against a judgement in the organisation’s favour.

On 3 November last year, Moumakwa filed a notice of appeal against the Industrial Court’s ruling for the government to compensate him with the equivalent of three months’ salary. However, on the 23rd instant, PEEPA, through its lawyers, Armstrong Attorneys, filed its notice of opposition to the appeal. Three days later, court papers indicate that PEEPA filed what purported to be a resolution extracted from the minutes of a meeting of its board of directors which was said to have been held on 22 November 2022.

The opposition to the appeal is said to have been sanctioned by the PEEPA board of directors. However, Moumakwa stated in his supporting affidavit, which was deposed on 27 January 2023, that this cannot be further from the truth because on the day the resolution to oppose his notice of appeal against the Industrial Court ruling was made, PEEPA did not have the constitutionally required number of board members to form a quorum. He revealed that PEEPA’s constitution prescribes that the number of its board members shall not be less than seven or more than 12.

Further, he said the constitution states that the quorum of the board shall be half of the total number of directors who are eligible to attend and vote thereat. “Therefore, at any given point the minimum number of directors that could constitute a quorum would be no less than half of seven directors, which effectively translates into a minimum of four directors,” Moumakwa asserted. He averred that on the day that the resolution is believed to have been taken, PEEPA did not only not have a minimum of seven board members but also did not have, in any event, even as few as four board members.

According to Moumakwa, all of the PEEPA’s board members’ contracts had lapsed at the time, save only the board chairman’s, which lapsed in December 2022. “Not only am I aware of the foregoing in the manner detailed but the respondent’s then Board Chairperson, one Tiny Kgatlwane, testified, before the court a quo, to the fact that she was only one of the two remaining board members as at the time of the trial in March 2022,” said Moumakwa. He stated that the other remaining member then was a certain Ms Motswagole whose tenure lapsed in October 2022.

Moumakwa further said he has also previously engaged the Minister of Presidential Affairs, Governance and Public Administration, Kabo Morwaeng. He said he has been compelled by these circumstances to bring the present application to strike out his former employer’s opposition to his notice of appeal. Moreover, he said, he has afforded PEEPA, through communication, an opportunity to correct, assuming that it was an error. However, he stated that it appeared the Agency had no interest in righting the wrong.

“It is clear that any opposition to the appeal could not have been validly authorised by the respondent’s “Board of Directors” by reason that such “Board of Directors” in fact, does not exist,” said Moumakwa. In his answering affidavit, PEEPA’s Acting CEO, Ishmael Joseph, denied the statements made by Moumakwa. “The summary of the applicant’s contention is that the respondent did not have a properly constituted Board to pass the resolution in question in terms of the respondent’s constitution,” Joseph said.

According to Joseph, Moumakwa failed to grasp the fundamental principles of the company law in that notwithstanding that Tiny Kgatlwane and Patience Motswagole’s terms as directors have expired, according to Section 153 of the Companies Act, a company shall not be without a director and that the last remaining director shall not vacate office until that director has called a meeting of shareholders to receive notice of the resignation, and to appoint one or more new directors. “This, therefore, means that Tiny Kgatlwane is the last remaining director to discharge her duties in the best interest of the company,” said Joseph.

“By virtue of Section 153 of the Companies Act, she forms a quorum until a shareholders meeting is convened to appoint new directors of the respondent.” Joseph stated that the purpose of this section, as read with Section 152 of the Companies Act, is to avoid a situation where a company is in a straitjacket state because currently the company has ‘no board’. In the end, the court ruled that PEEPA’s opposition to Moumakwa’s appeal be struck out because it was not lawfully authorised.

Tags: Armstrong AttorneysCourt of Appeal (CoA)Ishmael JosephKabo MorwaengPatience MotswagolePublic Enterprises Evaluation and Privatisation Agency (PEEPA)Tiny Kgatlwane

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