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Business Times reports that an analyst has described the acrimonious exit of Exxaro Resources CEO Nombasa Tsengwa, who resigned on Thursday after a failed attempt to have her suspension lifted, as “not good for the company”.
Yonelisa Petse of Aeon Investment Management was critical of the way the board of the coal miner handled its disagreement with Tsengwa. “This situation raises questions about the board’s oversight and why these issues weren’t addressed earlier. The oversight of the board has been brought into question with all the allegations which may or may not have credence,” Petse said. He now anticipates that investors will exercise caution when dealing with the company. He went on to say: “While the company’s survival is unlikely to be threatened due to its essential role in the energy sector, investor caution is anticipated, potentially leading to a governance overhang, increased M&A risk and valuation impacts.” But, the fight between Exxaro and Tsengwa might not be over. Her lawyer, Eddie Classen, said his client was aggrieved at how the board had handled the disciplinary process and investigation conducted by the law firm ENS Africa, describing both as unfair. He hinted that his client might go back to court to seek some form of redress. “She is presently considering her remedies and is reserving her rights,” Classen indicated. Tsengwa was placed on precautionary suspension in December pending the outcome of an independent investigation into workplace conduct and governance issues. Tsengwa approached the Pretoria High Court seeking to challenge her suspension, but a judge ruled on Wednesday that the matter was not urgent. The next day, Exxaro announced her resignation as CEO and board member with immediate effect. The company said it had commenced the search for a new CEO.
- Read the full original of the report in the above regard by Dineo Faku at BusinessLive (subscriber access only)
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