Donna Block and Mungo Soggot
Jonty Sandler and Nthato Motlana, the two founders of New Africa Investments Limited (Nail) who quit this week, were threatened with being summarily axed unless they accepted a R50-million golden handshake each, market sources said.
The two executives announced they were quitting their executive positions at the flagship empowerment group, although Motlana will stay on as non-executive chair until September.
Sources say Nail’s heavyweight institutional investors insisted on Sandler’s departure as a prerequisite for their continued support of the group. It is understood there was little pressure on Motlana to leave, but the 74-year-old physician, who is perceived as the godfather of black empowerment, felt it was time to go and he should support Sandler, his long-time friend and associate.
It is believed that after round-the-clock negotiations this week the two men walked off with about R50-million each – considerably less than the R250-million each they sought when discussions about their departure were first tabled.
Last week the two men were on the verge of bagging about R100-million each in departure pay, but when news of the deal leaked, it was scuppered by shareholders of the group’s institutional investors. That led to this week’s “take it or leave it” negotiations and the R50-million package.
Motlana told the Sunday World he and Sandler were quitting, but Sandler denied this on Monday morning in Business Report, in what some Nail watchers perceived as a last-ditch negotiating ploy.
Shareholder hostility towards Sandler intensified last month when it emerged that he and his three co-directors were in line for a R135-million share option boon which had not been adequately broached in the group’s annual report. After shareholders revolted, the directors backed down, but the damage was done.
This places MD Dikgang Moseneke in control, along with his right-hand man Zwelakhe Sisulu. They are also expected to have to renegotiate their remuneration and benefit packages – in particular what are believed to be generous restraint-of-trade pay-outs.
Moseneke, who joined Nail after the share option bonanza was negotiated, has signalled unease at the way it was organised and insisted that the debate over the share options be conducted openly. He has admitted that the opprobrium unleashed at Nail directors in the wake of the debacle had been a “salutary lesson”.
Moseneke is understood to have been willing for Motlana to stay. His position regarding Sandler is unclear.
Motlana is a medical doctor and President Nelson Mandela’s personal physician. He has had a long and respected career as a community leader. His departure from Nail and the front-line of the South African business community will be a loss for black empowerment. However, he is still a director of many of South Africa’s leading companies, including oil giant Sasol.