19 Apr 2021

Lobatse High Court judge, Justice Tebogo Tau yesterday dismissed with costs attempts by Botswana Building Society (BBS) board of directors to confirm the sacking of the bank’s managing director Pius Molefe and board secretary Sipho Showa.

Justice Tau ruled that the board meeting of April 5, which took the decision to dismiss Molefe and Showa, was not held in accordance with BBS Limited constitution thus rendering its decisions null and void.

The two executives were recently served with dismissal letters allegedly as a result of an ongoing power struggle between the non-executive board members on the one hand and senior management on the other.

Through attorneys Olebile Muzila and Msiya Kandiano, the BBS board had approached the court to interdict Molefe and Showa, bar them from entering the organisation’s premises in Broadhurst, Gaborone as well as to order them to return any company property in their possession.

In response, Molefe and Showa, represented by attorneys Mboki Chilisa and Charles Batsalelwang of Collins Chilisa Consultants argued that their dismissal was not in compliance with the company constitution and should therefore be rendered null and void.

In her ruling, Judge Tau noted that the current impasse at BBS came to a head after an April 1 board meeting called to discuss audited financial statements.

During the meeting, the board, most of whose members’ contracts expire on April 26, decided to extend their tenure by 90 days thereby deferring the process of electing a new board by three months.

The managing director reportedly advised that it would be unlawful for the board to extend its own tenure without shareholders’ endorsement and proceeded to seek the advice of the company legal counsel, who confirmed his view.

Displeased by the interpretation, the non-executive board members called a meeting four days later and resolved to dismiss Molefe and Showa, who were served with dismissal letters the following day.  Non-executive director James Kamyuka was appointed acting managing director.

But Molefe and Showa gave notice of their intention not to abide by the terms of termination and to continue reporting for duty until such time that there was a valid resolution dismissing them.

The board then sought reprieve from the court contending that Molefe and Showa had reinstated themselves without any court ruling overturning the board decision and asked that they be ordered to return company property, stop acting on behalf of BBS and be barred from accessing company premises as well as social media accounts.

The duo, through their legal representatives, argued that the BBS board’s decision did not meet the threshold of an administrative act performed in the exercise of public power and did not need a court ruling to overturn.

They argued that the board meeting that dismissed them had not complied with Clause 75 of the BBS constitution which required no less than seven days notice issued, including matters to be discussed, to each board member before a meeting.

The board chairperson called the April 5 meeting through email 10 minutes before midday some three hours and ten minutes before the board met on the same day at 3pm.

Concurring,  Justice Tau said she had reached the conclusion that the BBS Limited board of directors meeting of April 5  was in breach of company constitution and its “decision to terminate the contracts of the respondents (Molefe and Showa) are automatically null and void”.

Citing legal precedence, Justice Tau said if an act was void, it did not require a court ruling to set aside therefore Molefe and Showa were within their rights to refuse to abide by the unlawful board meeting resolution even without having first sought a court to overturn such decision. ENDS