No matter how it is dressed up, it is becoming quite clear that the Pioneer Foods boardroom shake-up is the start of a house-cleaning process that is being driven by shareholders.
Pioneer Foods announced this week that five non-executive directors, including chairperson Boy Blanckenberg and vice-chairperson Nols Louw, had voluntarily resigned.
This followed the resignation of executive director Tertius SwaneÂpoel last week.
Last month PSG chairperson Jannie Mouton, who is also a Pioneer Foods board member, called for the entire 14-member board to resign after the company received a R195-million fine from the Competition Tribunal for its involvement in the bread cartel.
The PSG Group owns 41% of Kaap Agri through Zeder Investments, and Kaap Agri owns 40% of Pioneer Foods. Mouton was quoted as saying the call for the board’s resignation was aimed at fixing the management structure at the company.
Questions have been raised about why the non-executive directors of Pioneer Foods have resigned, when the executive members oversaw the company’s day-to-day business, including its involvement in the bread cartel and its alleged participation in a wheat-milling cartel.
A source close to the Pioneer Foods board suggested to the Mail & Guardian this week that the spotlight would now turn to the executive management of the company.
“I think the board should look at the executive management now,” said the source. “The new board must evaluate them.”
This was reinforced by Pioneer’s new chairperson, Zithulele Combi, who told the M&G this week that the new board would fully investigate the company’s involvement in the bread and wheat cartels, because the old board obviously had “difficulty investigating itself”.
Combi said there would be a full investigation and disciplinary action would follow for staff members found to be complicit in collusion.
At the announcement this week of the board members’ resignations, Combi apologised for Pioneer’s involvement in the bread cartel.
“I also want to apologise for the fact that a settlement of various matters was not more successfully pursued earlier, which may have settled matters sooner,” said Combi. “It is of little comfort that legal advice made Pioneer Foods resist the competition authorities in what some might say was an arrogant fashion and created the impression that Pioneer Foods was obstructive and did not want to cooperate with regulators.”
“Today we turn a page and commit ourselves anew, as board and management, to the principles of transparent competitive behaviour and the sustainable growth of our business for the benefit of all stakeholders,” he said.
Top of the list
Top of the new board’s list for investigation will probably be Sasko Bakeries’ general manager, Charl Goosen, who admitted to lying to the Competition Tribunal during the hearing into Pioneer’s involvement in the bread cartel and who is still employed by Pioneer.
Goosen could still face perjury charges, with the Competition Commission’s Shan Ramburuth admitting that the commission was currently considering its options.
Goosen was accused in the tribunal’s judgment of lying under oath, misleading the tribunal and providing false testimony.
“We should be clear that we believe that Goosen has lied to the tribunal,” said the judgment.
“Whether or not Goosen chose to mislead this tribunal of his own volition or was asked to protect other persons in the organisation is not clear to us,” stated the judgment. “What is clear to us is that Goosen’s lack of credibility as a witness was put beyond doubt.”
But Goosen was not singled out on his own. The tribunal argued that Pioneer’s conduct had left “much to be desired” and that its attitude towards the tribunal and the commission had been “downright disdainful”.
When the M&G asked Pioneer Foods whether any disciplinary action had been taken against Goosen or any other employee implicated in collusion, it responded that the board was in the process of taking appropriate disciplinary action and would report on the outcome once it had been concluded.
The investigation will not be the only major item the new board will have to deal with: Pioneer Foods still has to defend itself against charges by the Competition Commission that it was involved in a wheat-milling cartel. If it is found guilty, it could face a fine of R1,5b-illion.
Combi announced this week that Pioneer Foods was looking to settle the matter with the Competition Commission, which would result in a substantially reduced fine.
Further to this, the Competition Commission has taken the tribunal’s decision on the bread cartel hearing on appeal, arguing that the tribunal erred in fining the company R195million. The commission is pushing for the maximum fine of R1,5-billion.
Pioneer’s spokesperson, Johannes van Niekerk, said the resignation of the board members occurred voluntarily to make way for new leadership at Pioneer Foods.
“There is broad-based shareholder support for the board changes announced,” said Van Niekerk. “It was an opportune time to introduce new leadership capacity to take the company forward in this new chapter of growth.”