This story is part of a special report chronicling events that led to the dismissal of Andrew Okai as the CEO of Letshego Holdings. In case you missed it read here:
“As the opinion of the CDH (Cliffe Dekker Hofmeye, SA lawfirm) was not entirely to the applicant’s (Andrew Okai) liking he proceeded to again engage another firm, Collins Newman & Company, for a third opinion without authority of the board,” Dr Gloria Somolekae wrote in her affidavit, adding that the attorney Collins Newman assigned to attend the opinion was Parks Tafa.
Okai argued that he is empowered by virtue of Letshego’s delegation of authority policy. Somolokae said Okai, without authority, gave Tafa recordings of previous board meetings and with it access to price-sensitive information. Admittedly, Okai argues that Tafa, as the Letshego’s attorney, requested that they were needed to provide the opinion sought.
Somolekae said “the applicant’s irrational responses to the establishment of consideration of expression of interest and establishment of the IB was demonstrated yet again at the board meeting held 25 February 2022”. At this meeting, she said, the main agenda was to urgently address the fact that the tenure of Stephen Price, an independent directors, was set to expire on 3rd March 2022. At the time, Price was Chairman of the Group Audit Committee (GAC) as well as of the Independent Board and had been an independent director for nine years.
In view of the fact that Letshego was still in the process of preparing its annual financial statements and Price was the Chairman of the GAC, a committee that is both vital and instrumental in the preparation of the aforementioned financial statements, Somolekae views that it became apparent to any reasonable person that Price’s tenure ought to be extended. Okai submits that he and Gwen Mutiewa, the Group Chief Financial Officer (CFO) did not support the extension of Price’s tenure.
Their reasons were two-fold. First the process set out in the board charter and in particular clause 5.2.4 (b) (v) had not been followed as no rigorous review of Price’s independence and performance by the board had been undertaken. Secondly, Okai testifies that as there was a replacement being Rose Mwaura, who had been specifically recruited well in advance, in place.
But Somolekae argued that the board was able to solicit prompt advice and guidance and learnt that in terms of King Code IV, independent non-executive directors may serve longer than nine years, if after an independent assessment by the board, there are no relationships or circumstances likely to affect, or appearing to affect, the director’s judgement.
Upon satisfying itself that extension of Price’s tenure would not infringe any regulations of either the BSE or NBFIRA, the director said the board “tabled the extension for a vote but for the applicant, the decision would have been unanimous”. Documents submitted by Letshego show that the applicant voted against the extension of Price’s tenure “notwithstanding that it was in the best interest of the respondent to extend the aforementioned tenure”.
“This notwithstanding the fact that the Board Charter gives the board discretion to extend the tenure,” said Somolekae, who noted that Okai, together with “the Company Secretary, who was supposed to be guiding the board, rather held an expectation that come 3rd March 2022, Price would be shown the door even if it were to the detriment of the respondent”. In any interpretation, Letshego’s view is that “one gets to see the applicant was blinded by disdain for the board and the IB”. Okai said he was entitled to vote against the extension of Price’s tenure.
Tafa lambasts the board
On 18 February, Dr Somolekae said the Company Secretary intimated the Chairman of the Board by email that she had been able to obtain a further opinion on the invalidity of the constitution of the IB. Letshego said the Chairman asked to be furnished with a copy of the opinion but the copy was not forthcoming. Instead, Somolekae said, a special board meeting was called for purposes of considering a presentation by Tafa on the constitution of the IB, on 1st March 2022. Okai said Tafa made a robust presentation to the board and admittedly pointed out the various irregularities with process followed in the formation and constitution of the IB and the actions taken.
But Letshego felt attacked. Dr Somolekae said Tafa lambasted the board and even went to the extent of accusing them of being delinquent and riddled with unethical conduct. “To bring his insults to life, Mr. Tafa went on to liken the board to Dudu Myeni, formerly chairperson of South African Airways (SAA) who was declared by the courts in South Africa a delinquent director for life and had adverse findings made against her by South African then Deputy Chief Justice (now Chief Justice) Raymond Zondo’s commission on state capture for her role in the demise of SAA.”
Following Tafa’s lecture, the board said it requested that he put his opinion in writing and furnish them with it. To-date, Somolekae said, the board has not received that opinion. “The acerbic views and strong accusations expressed by Mr. Tafa about the board being delinquent and acting in disregard of the interest of the respondent were undoubtedly the result of instructions that had been given by the applicant,” Somolekae wrote. While she suggested that the words “mirrored the perception of the applicant about board members”, Okai submitted that this was not true, given that he was not acting for himself but for Letshego. For purposes of completeness, it is noted that at the meeting of 1st March 2022, the Chairman of the Board asked Tafa who he was acting for and he responded by saying he acts for the respondents,” Somolekae told the court, noting that “he was requested to reduce his opinion to writing, but several weeks later it has still not been furnished”.
Continue reading: Board alleges obstruction in its work, Okai denies