NOMBASA Tsengwa, CEO of Exxaro Resources has been temporarily suspended while the firm’s board runs an investigation into her work conduct and governance practices.
“The board believes that this decision is in the best interests of both the company and Dr. Tsengwa,” said Exxaro in a statement to the Johannesburg Stock Exchange. Shares in the company fell 2.4% in mid-afternoon Johannesburg trade.
Tsengwa, who was appointed CEO of the coal producer in 2021, would be replaced by CFO Riaan Koppeschaar, the company said. Tsengwa would “step back from all executive and Exxaro board duties” during the period of the investigation to be led by ENS, a law firm.
“The board takes any such allegations and resultant investigations very seriously but makes no presumption as to its conclusion,” it said. “The company will be guided by the outcome of investigation before taking the appropriate action, if any.”
Exxaro’s board reportedly exonerated Tsengwa last week but ordered a forensic probe amid allegations by former employees, uncovered in two articles by Business Times.
Her critics point to the number of senior staff resignations and suspensions including the company’s head of coal Kgabi Masia who was put on suspension while on a work trip in Switzerland, according to Business Times.
Said Geoffrey Qhena, Exxaro chair: “The board is fulfilling its fiduciary duties by taking decisive steps to act in the best interests of the company and stabilise its leadership, while it conducts an appropriately thorough and independent investigation in line with company values and policies”.
Koppeschaar would be supported by “a seasoned board”, said Qhena who added that the firm’s strategy to diversify into other minerals would continue. Tsengwa said previously the firm was interested in buying certain manganese assets.
Koppeschaar, who has 30 years in the mining sector, is a chartered accountant, and has “a deep knowledge of mining and of Exxaro, where he has been finance director since 2016,” said Exxaro in its statement.
Culture of fear
Senior staff turnover has been significant, said Business Times which first wrote of Exxaro’s turmoil on November 24.
Roland Tatnall, who was the MD of Cennergi, the group’s renewable energy business, Vanisha Balgobind, former executive head of human resources, and the person who replaced her in an acting capacity, Hemuna Bhola have all left the company, the publication said in its first report.
Others who resigned are Alex de Angelis, executive head of strategy; Bathabile Ponu, the chief internal auditor; and Louis Retief, executive head of information management, said Business Times. Andiswa Ndoni, the company secretary, is on suspension, while chief investor relations officer Ling-Ling Mothapo has been placed on gardening leave, and it wasn’t clear if she would return to work, the newspaper said.
Former and current executives who spoke on condition of anonymity to Business Times alleged Tsengwa had created a culture of fear. They also bemoaned the slow pace of executing on group strategy to diversify into green metals, including manganese, to reduce Exxaro’s over-reliance on coal revenue, said the publication.
Despite announcing its diversification strategy more than three years ago the company is yet to make any progress. Tsengwa told Bloomberg News recently that it was interested in buying manganese assets in South Africa.
Responding to the Business Times article, Tsengwa said in November: “I have served the Exxaro family with humility and dignity for over 21 years with an unblemished record working in many different roles.
“Therefore, I am committed to continuing to serve the interests of our shareholders, stakeholders, and you our employees; fostering a healthy culture within the organisation while striving to set very high-performance standards”.
