The Pretoria high court has ruled that the Prudential Authority (PA) acted unlawfully and exceeded its powers when it told Absa that it objected to Sipho Pityana’s nomination as the bank’s chair.
The judgment on Friday is the latest twist in a protracted legal battle between Pityana, the bank and the PA over Absa’s decision not to appoint him chair in 2021.
Pityana went to court to seek a declaratory order that the PA had acted ultra vires (beyond its legal authority) when it adopted an informal process in considering his nomination as chair of the Absa board.
This, he argued, circumvented the procedures set out in the Banks Act and denied him the right to challenge its decision to oppose his nomination.
On Saturday Pityana said he had been vindicated. “I’ll be making a statement on Monday,” he said.
The PA said: “We are studying the judgment and will respond once we have concluded that process.”
Absa said it was aware of Friday’s ruling, but: “Mr Pityana’s application for the court to review the Absa board’s decision to remove him as a director is still pending before the high court.”
In his judgment, justice Luleka Flatela said the PA had “acted unlawfully and in excess of its power per the Banks Act 94 of 1990 by engaging in an informal process with [Absa Group and Absa Bank] in connection with the nomination of Pityana as chairperson of the board of directors, and in particular by notifying the Absa Group and bank of its objection [or its] intention to object to Pityana’s nomination”.
Flatela ordered the three respondents to pay Pityana’s costs.
The judge noted that Pityana had initially been Absa’s favoured candidate to take over as chair from Wendy Lucas-Bull, whose retirement was scheduled for March 2022.
In his application, Pityana argued that “while neither the authority nor the Absa board has made a formal finding that I am not a fit and proper person by communicating to Absa that it would object to my nomination, the authority effectively conveyed a firm conclusion that in its view I am not a fit and proper person to take up the position as Absa chair. It reached this conclusion despite not having afforded me an opportunity to be heard on this matter.”
Pityana was removed as lead independent director of the Absa board in November 2021 because of his litigation against the banking regulator.
He alleged that the then head of the PA, Kuben Naidoo, held behind-the-scenes talks with Lucas-Bull and former Absa CEO Maria Ramos over his candidacy.
Pityana argued he was blocked from the Absa chair role over sexual harassment allegations against him — which he has denied — stemming from his time as chair of AngloGold Ashanti.
Absa eventually appointed Sello Moloko as its chair.
Additional reporting by Business Day
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