Seven days of tension
Mpho Mokwape | Friday April 23, 2021 16:34
To use an exhausted cliché, it was already raining for the BBS Ltd directors this week, when it began pouring. BBS shareholder and Botswana Centre for Public Integrity executive director, Pusetso Morapedi sued the directors at the High Court seeking to prevent them from using the upcoming AGM to extend their terms.
Justice Mercy Garekwe will deliver judgement on the lawsuit on April 30, 2021, the same day directors will face off against other shareholders in a meeting that will decide their fate.
Events have moved briskly at BBS Ltd in the past two weeks. Seven directors, five of whose terms elapse on April 26, attempted to extend their tenures by 90 days, sparking a clash with managing director, Pius Molefe and company secretary, Sipho Showa. The duo had issued a notice to shareholders indicating that new director nominees would go up against the five directors at the April 30 AGM and backed up their decision with a legal opinion against the directors’ move. The board resolved to dismiss the pair, secured an interim order at the Lobatse High Court, then watched as the same court overturned their decision.
Molefe and Showa then also secured another victory at the Industrial Court insulating themselves from further ouster attempts from the board, a decision the MD said was due to a fresh bid led by the board chair, Pelani Siwawa-Ndai.
“As MD, it had been my intention following the High Court order to reach out to my fellow board members to request for calm minds and emotions to prevail leading to the 2020 AGM,” Molefe told shareholders in a statement on Monday.
“Unfortunately, I was disappointed when I received a draft document from the board chair via WhatsApp to the effect that she and other colleagues would be approving a resolution by round-robin to dismiss me and the company secretary from office again without giving us a hearing as stipulated in the BBS Ltd conditions of service.” The recent court defeats have seen the board box itself into a corner in its battle with the MD. With days to go till their terms expire, the board, with its five affected directors, appears to have little wriggle room to pursue its goal of amending the AGM to replace the directorial election with an extension of terms.
Under the BBS constitution, all directors, who include the MD, must be given not less than seven days’ notice of a board meeting, which should also include the matters to be discussed. With their terms ending and the AGM looming right after, the round-robin was the only avenue left for the directors to dismiss Molefe and Showa.
The round-robin clause states that “a resolution in writing, signed or assented to by the majority directors is as valid and effective as if it had been passed at a meeting of the Board duly convened and held”.
Analysts say while the Industrial Court has effectively blocked the use of the round-robin to fire Molefe and Showa, in the days ahead of the AGM, directors may use their numbers to push another round-robin to change the April 30 agenda to their liking.
This is where Morapedi’s urgent suit comes in. “It is critical now more than ever for shareholders to be allowed to exercise their constitutional and statutory right to elect directors of their choice at an AGM,” Morapedi’s papers before Garekwe read. “A deferment of the election of directors will deprive shareholders the opportunity to vote on pertinent issues in connection with the business of BBS Ltd and definitely resolve the current impasse so that BBS business resumes with no interruptions.”
Which way Morapedi will vote on April 30 appears apparent.
“I do not trust the current crop of board members to continue to properly run the affairs of BBS because the manner in which they have handled this entire situation evinces a blatant disregard for my rights and interests as a shareholder which the board is appointed to uphold, advance and protect,” she submitted to the court.
The board meanwhile, appears to have given up the fight, as it is not challenging Morapedi’s suit, except on the issue of costs. Even as Garekwe’s judgement looms, the final decision, it appears, will lie in the hands of shareholders after all.