By David Dolan and Tiisetso Motsoeneng
JOHANNESBURG (Reuters) – The largest shareholder in South African cement maker PPC will vote against a resolution next month to remove the entire board, the acting chief executive of the $126 billion state-owned fund said on Thursday.
Investors in South Africa’s biggest cement manufacturer are due to meet early next month to consider removing the entire board. The meeting’s resolution was requested by three shareholders with a combined 10 percent of the company.
But the vote of the Public Investment Corporation (PIC), which owns around 12 percent of PPC and is one of South Africa’s most influential investors, will likely be critical.
“In terms of corporate governance principles, the PIC would like to see continuity on company boards. It is within this context that the PIC does not favour the removal of an entire board,” Matshepo More told Reuters.
The PIC manages more than $126 billion in pension assets for government employees.
His comments came after PPC Chairman Bheki Sibiya told Reuters the board had the backing of its largest investor.
“They are looking at the company and they don’t feel anything untoward about the company,” Sibiya said.
The board has been locked in a public row with former Chief Executive Ketso Gordhan, who has been lobbying to return to PPC since resigning in September when the board refused to back his decision to fire an executive.
Gordhan told Reuters on Tuesday he wants to return as either a board member or as chief executive, adding he has the backing of the three shareholders, which include Foord Asset Management and Visio Capital.
He said his exit prompted one development finance institution, which he did not name, to reconsider lending PPC $200 million for an Algerian acquisition.
But PPC Chairman Bheki Sibiya said on Thursday the company will be able to secure financing if it decides to go ahead with the acquisition of 49 percent of Hodna Cement.
“We are lining up the funding,” he said in an interview with Reuters. “I am very confident that we have that under control.”
PPC’s board said Gordhan’s comment about the $200 million loan was “factually unfounded and damages the image of the company”. Sibiya has said the company is taking legal action against Gordhan for being a “delinquent director”.
The spat, a rarity in South Africa’s usually tight-knit business community, has undermined PPC’s share price, which slumped to a more than 12-month low of 27.11 rand in October. The stock was down 0.4 percent at 28.30 rand by 1241 GMT.
($1 = 11.1236 South African rand)
