This story is part of a special report chronicling events that led to the dismissal of Andrew Okai as the CEO of Letshego Holdings;
Court exposes foiled hostile takeover by Bayport
Board alleges obstruction in its work
During an impasse between Letshego’s ex CEO Andrew Okai and the board, the company alleged that the board was not getting any information from Okai about the performance of the business.
According to an affidavit by Dr Gloria Somolekae, an independent director, prior to November 2021, the board used to get monthly performance reports from the CEO. “The sharing of these reports stopped,” Somolekae told the court. But Okai made a submission detailing the challenges with providing timely information.
“An email was sent to the applicant by Mr van Heerde asking for information about performance of the respondent,” wrote Dr Somolekae. “The applicant’s conduct and attitude towards the board impelled it to act urgently and decisively. Given the statutory oversight role imposed on it by both statute and the common law, she believes the board was compelled to act urgently and ensure that it resumes the discharge of its oversight role. As attempts to normalise relations with Okai were not bearing any fruit, she said the only way the board could again discharge its oversight role involved separating with the CEO and replacing him with someone who understands that he/she is accountable to the board. As the Board considered a permanent appointment, Aupa Monyatsi, the current Chief Operations Officer of the company, was appointed as the Group CEO and Executive Director for an interim period.
“The removal of a Group Chief Executive Officer is not a decision that the board could ever undertake lightly. It is a decision of last resort because it creates jitters in the market and may unsettle funders,” said Somolekae. In the above circumstance, she submitted that the board had a responsibility to bring a separation of Okai and Letshego.
While Letshego considered that it was obliged to act urgently, Okai contends that it never once approached him to discuss the issues that it was now raising after the fact. “If the respondent wished to dispense with my services, it was obliged to act lawfully and fairly.” Dr Somolekae said Letshego was left in no doubt that the conduct of the former CEO rendered him liable for summary dismissal. She submitted that this route was however regarded as the least attractive one because of the following:
“A disciplinary enquiry would take several days to organise and conclude and given his erratic conduct, he could in the time between receipt of the disciplinary notification and the outcome of the disciplinary enquiry engage in conduct that is harmful to the company and may result in funders calling in loans extended to the respondent,” she wrote. In response, Okai said no factual basis has been provided for the subjective views expressed nor for alleged conduct which he denied. “Despite the respondent’s unfounded claims, I was and I am entitled to due process and to be treated fairly,” he replied.
Evenso, Somolekae claims that “a suspension pending disciplinary enquiry was also considered not ideal because of the uncertainty it would bring as regards the executive leadership of the respondent”. She said this would have affected shareholder confidence and with it shareholder value. “There was also fear that if the applicant was suspended as opposed to being dismissed, he could cajole members of the respondent’s staff not to corporate with whoever was appointed as interim GCOE.”
A disciplinary enquiry followed by summary dismissal would have left a stain in the service record of Okai and make it difficult in future for him to find employment, Dr Somolekae claimed. Okai argued that it is self-serving for Letshego to state that he was spared a disciplinary enquiry and summary dismissal to save staining his service record. “It is clear that the respondent had determined that I was guilty and abrogated to itself the role of judge, jury and executioner and for expediency purposes made the conscious decision not to charge me and afford me a hearing.”
Somolekae claims that the route that was chosen involved immediate separation with the applicant and immediately appointing an interim GCEO so that there is seamless transition. “It involved invoking a clause that did not require the respondent to put the applicant through a disciplinary process. The board was advised that the termination of contract of employment of a senior executive who has negotiated his contract of employment with his employer on equal footing has been regarded by the highest court as constituting a termination for just cause and procedurally fair.” Okai does not agree with the advice furnished to Letshego nor that it was entitled to act in the manner it did. “I have been manifestly prejudiced by the respondent’s callous and wrongful actions.” The board thus on 3 May 2022, at around 6 pm terminated the applicant’s contract of employment.
But transaction fails
The exit of the CEO had already sparked speculation in the market that Letshego was in negotiations with a third party in the region to give effect to an unsolicited offer to acquire a portion of the ordinary share capital of the company. While the company admitted it was approached, Banda issued a statement to the effect that it did not materialise into a firm intention to make an offer.
“Therefore, the Board confirms that there are currently no ongoing negotiations between the company and any third party to acquire a portion of ordinary share capital of the company,” said Banda, who added that should a firm intention to make an offer be received, the company’s board will consider the offer in the interests of shareholders and address the offer as prescribed in the takeover regulations of the Botswana Stock Exchange. “The Board will issue all necessary announcements in accordance with the applicable listing rules. Shareholders are advised not to rely on any information other than information disclosed formally by the company,” said Banda.
Read more: Parks Tafa persuaded fund managers to remove Letshego board
