As if the drama surrounding the goings on at PPC didn’t already read like a soap opera, now you have a very clear and direct accusation of racism. Let me remind you that this is 2014 and PPC is a JSE-listed company. Precious little else matters to shareholders other  than performance, but …enter Gregory Mofokeng, general secretary of the Black Business Council. He is claiming that this most recent and preemptive PPC board shuffle was to scupper the racist inclinations of white shareholders. Watch this fellow South Africans. – CPÂ
ALEC HOGG: Gregory Mofokeng, who’s the General Secretary of the Black Business Council, in the Built Environment, joins us in the studio to talk about that. The last point (made in a pre-recorded interview with Bheki Sibiya) is exactly what Ketso Gordhan was asking for: ‘Let me shape my own team’. Now Bheki says ‘well, the next CEO will be able to shape their own team’. It seems as though, sometimes, we in South Africa have to hit a crisis before we change.
GREGORY MOFOKENG: Well, I think the issue was the approach – the manner in which he wanted to do it – and I think that’s where the disagreement arose, between him and the Board. This is what has led us to where we are today so I think the difference, really, was in the approach.
ALEC HOGG: It’s not a line in the sand. This is has been going on for two years. For two years Ketso has sat in that chair and he told us ‘for two years’ someone else, who threw their hat in the ring to become the CEO, had been white-anting him and had been cutting him down at every opportunity. He’s been saying so all along. It isn’t something that, all of a sudden, there’s an approach that he wants to fire her. It has been a buildup, but I guess we are all human beings, aren’t we.
GREGORY MOFOKENG: We are all human beings but there are rules that we have to play by, and I think the Board has been clear to say that the manner in which Ketso wanted to go about firing the person that he wanted to fire, was not following due process. Therefore, one can have a wish, in terms of the strategy, but there are rules to play by and I think this is where, really, what it came down to. That the Board wanted a particular process to be followed and Ketso wasn’t playing ball.
GUGULETHU MFUPHI: The process that’s been followed, and the result that we hear of, this morning; does it show that the power truly does lie, in the hands of the shareholders?
GREGORY MOFOKENG: Well, the power will always lie in the hands of the shareholders. I think for us, we are glad that sanity has finally prevailed but however we also wanted this to go all the way. We are obviously, glad that the Board managed to convince the shareholders that this Special Shareholders meeting should not go ahead, as originally planned. However, we wanted this to go ahead, so that those, in our view, are people who are there to ensure that, because our view is that the issue here is that the Board was under attack. Precisely because of its demographic makeup, this has never happened before, and we think that the cause that was taken by Ketso, and some of the shareholders, really said to us that because of the demographic make-up of the Board, they could do this.
ALEC HOGG: What?
GREGORY MOFOKENG: This is something that has never happened before.
ALEC HOGG: I’ve never heard that part.
GREGORY MOFOKENG: Well, we have issued statements to that effect.
ALEC HOGG: You might have, but the PPC Board hasn’t.
GREGORY MOFOKENG: Well, the Board does not have to. We have our own view.
ALEC HOGG: Shareholders haven’t. Are you saying Dave Foord is a racist? Are you saying that Visio and Nedbank took this on from a racial perspective?
GREGORY MOFOKENG: We are saying; show us an instance where this has happened, where a CEO has a fallout with the Board, and runs to the shareholders and the shareholders then support the CEO, to then topple the Board. Where has this happened? Our view is very simple that, when you look at the racial…
ALEC HOGG: That’s a black CEO.
GREGORY MOFOKENG: Well, I can assure you that there are more black people out there, who will side with Ketso. In fact, who are more under transformation than we’d ever think. We encounter them every day, where you find that even where there are transformation strategies that must be employed; the very black people will be the first to, not support those. At the end of the day, just because you are black, it does not mean that you support transformation, it doesn’t.
ALEC HOGG: So what are you saying? I want to get what you’re saying now because it’s a little confusing to me. You’re saying the shareholders decided to support Ketso Gordhan because he’s anti-transformation.
GREGORY MOFOKENG: Precisely, let me just reinforce my point. When you look at the proposed Board, in fact, the net effect of Ketso’s strategy would have made sure that overnight, you have a majority white board, at PPC, so at the end of the day, we’ll look at the demographic make-up of the proposed Board and we say ‘hang on. What is happening here?’ I think our analysis was very clear that overnight you will have a majority white board, replacing a majority black board, and I think when you look at where we are, as a country, the transformation gains that we have arranged that, as a country, we cannot afford to have that…
ALEC HOGG: That’s extraordinary.
GUGULETHU MFUPHI: How do you strike a balance between transformation, as well as having people who are able to do the job, sitting at the Board?
GREGORY MOFOKENG: Well, that’s a very interesting point because when you look at the narrative, around this story, in fact it evolves from delegation of authority, between the Board and the CEO then later on we were told that, in fact, the CEO thinks that the Board is incompetent. We were then, later told about a Board that is imbalanced.
When you look at the proposed Board tell me, if there is anybody, who has any cement experience that was supposed to be replacing the current Board? In fact, when you look at the current Board they have far more experience, in running a cement company than the proposed Board. Therefore, we think that this was just trivial reasons that were given. This was just an attack on the Board, as an opposition.
ALEC HOGG: Are you saying that the board that was proposed by Ketso Gordhan, in other words, not the board that is now being proposed. Are you saying Bobby Godsell is a racist, I mean seriously?
GREGORY MOFOKENG: Well, I’m not saying Bobby Godsell is a racist, what I’m saying…
ALEC HOGG: Come on, you know.
GREGORY MOFOKENG: No, give me a chance let me respond. What I’m saying is that Bobby Godsell should have thought twice, before agreeing to serve on a Board that was going to transform the racial make-up of the PPC Board. This is what we are saying and, in fact, the very interesting issue with Bobby Godsell is that Bobby Godsell was, in fact, one of the leaders in this business leaders, in this country, who was doing a lot for transformation, and BEE.
In fact, our view was that should he have applied his mind properly, he should have at least advised those that were putting the board together that, ‘look, let’s not undermine the racial composition of the new board’.
ALEC HOGG: So that’s the key to racial compositions of the boards. Not necessarily, what the shareholders were wanting, the perhaps more efficient running of the business.
GREGORY MOFOKENG: Well…
ALEC HOGG: I’m saying that, that the shareholders are not interested in race. Shareholders are interested in returns but you are saying that these shareholders were only interested in race.
GREGORY MOFOKENG: No, that’s not what we are saying.
ALEC HOGG: Well, what are you saying?
GREGORY MOFOKENG: When you look at the current Board. Give us an instance, where in fact, in the past any one of the CEO’s or anyone of the shareholders has gone out and said ‘our Board is incompetent’. In fact, the Board members that are there were appointed by the shareholders. The shareholders were comfortable with their CV’s. They know their level of education. They know their experience and that’s why they are appointed to this Board.
Our view is that it is not about competence. It’s not about the competence. These people know what they are doing. If that was not the case, since 2005, when the transformation started happening on the PPC Board, then I’m sure that all the black directors that have sat at that Board, some of them would have been taken out of the Board, if they were incompetent but you look at some of the people there. They’ve been there, some, since 2005 and that says something.
If the shareholders were not happy, they should have replaced them a long time ago. Our view, therefore, is that this is normal competency. It is not and as I said; if you are looking for a balanced board, the current Board, in our view, is far more balanced than the board that was proposed by Ketso. Look at their CV’s. Look at their experience and tell me if anybody on that list has more experience of running a cement company, than the current Board.
ALEC HOGG: So who, on the current list, has experience of running a cement company? The new Chair, Zibo Kganyago, has been involved in property, not cement – the new Chair, who is going to take over from Bheki Sibiya.
GREGORY MOFOKENG: Well, I’ve just said to you that the Board member that has sat the longest on that Board has been there since 2005. Show me somebody, in the proposed board, who has been there. Who has run a cement company, and others were appointed a long time ago.
ALEC HOGG: Ketso Gordhan is one.
GREGORY MOFOKENG: Well, Ketso Gordhan, remember, was appointed 18 months ago and he found the rest of the Board Members there already. In fact, it was only two that were appointed after his appointment.
ALEC HOGG: Why do you have to make this a racial thing?
GREGORY MOFOKENG: Well, because we are picking up racial undertones on this.
ALEC HOGG: But come on. We are 20 years into a democracy. We are trying to build this country together.
GREGORY MOFOKENG: Then how do you explain…
ALEC HOGG: Why must it be a racial thing?
GREGORY MOFOKENG: Then how do you explain a board that is black, which we view as competent, being transformed overnight to a majority white board? Can you explain that to us?
ALEC HOGG: I would suggest that the shareholders looked at this board and believed that it had not performed, in the manner of returning, or making returns to shareholders, and I just wanted to have a look at the share price performance, over the past three years, which I’m sure you could tell me, better. It is down 19 percent in the last year at a time when the JSE is up in double figures. Now that, at least you have to acknowledge is not a sparkling performance.
GREGORY MOFOKENG: It is not a sparkling performance but you also have to look at the environment within which PPC is operating, at their results presentation a couple of weeks ago. They made this very clear and I’m sure you’re aware that especially in South Africa; the market in which they are operating is quite tough. You can see that even from the results of the construction companies that have been reported recently. That their results are also not sparkling and this is obviously, something that the shareholders have to take into consideration.
GUGULETHU MFUPHI: Your expectations for the CEO?
GREGORY MOFOKENG: Well, we hope that a competent CEO will be appointed and we are hoping that, whoever gets appointed will, you know, continue the good work of ensuring that PPC remains one of the most transformed companies, in our sector, as far as the JSE listed companies are concerned.
ALEC HOGG: The share price today is lower than it was three years ago. Thank you Gregory, and what a fascinating discussion, but let’s get the race thing out of it, please.
GREGORY MOFOKENG: No, we are not. We are not going to get it out. There is no way that we can replace a majority black board with a majority white board, in 2014, in South Africa. We are not going to take that, never, especially when the people are not incompetent.
If you were telling me that the Board is useless and they don’t know what they’re doing, then that’s something. Then let’s have a discussion about competence and say, ‘who are we replacing these people with, who is competent’? I’m saying that when we look at all the annual reports, when you look at all the engagements within the management of PPC and the investors, throughout the years, from Paul to Ketso. There was no issue about the board not being supportive. There was no issue about the board not understanding the direction that the company is taking.
Now, all of a sudden, just because you have Ketso, who has got an issue, now you want to paint the whole Board as ‘useless’ as not knowing what they are doing. This was not an issue of incompetency. If you want us to have a discussion about competency then let’s do that and tell us that those people don’t have the necessary qualifications, they don’t have the necessary experience.
ALEC HOGG: I get what you are saying and I get where you are coming from but I can tell you, as a person who’s followed investment markets for 35 years, investors don’t give a toss about race.
GREGORY MOFOKENG: Yes, and that’s what we need to change.
ALEC HOGG: That was Gregory Mofokeng, the General Secretary of the Black Business Council, in the Built Environment.
