PPC shareholder says new board needed

090508 Cement companies in South Africa are to increase their prices on cement.picture Simphiwe Mbokazi 8

090508 Cement companies in South Africa are to increase their prices on cement.picture Simphiwe Mbokazi 8

Published Oct 20, 2014

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Johannesburg - PPC, South Africa’s biggest cement maker, needs a new board to keep expansion plans on track following the resignation of former chief executive Ketso Gordhan, according to shareholder Foord Asset Management.

“It’s critical that the board be replaced with a functional board as soon as possible to restore continuity to the operations strategy and employees at PPC,” Carolyn Levin, a portfolio manager at Cape Town-based Foord, said by phone today.

“We aren’t siding with former chief executive Gordhan.”

Gordhan resigned on September 22 after less than two years as chief executive, citing differences of opinion with fellow directors over matters including his intention to fire an unidentified senior executive.

He said on September 29 he would return to his post if he had the backing of shareholders.

The Public Investment Corporation, PPC’s biggest investor with a 12 percent stake, said September 30 it was in “total support” of the board and the company’s strategy.

Foord, which Levin said owns more than 5 percent of PPC, plans to send a second letter to the company this week to demand a special shareholder meeting to elect a new board within a month.

A request sent earlier in October was “rebuffed” by the board, Levin said.

PPC shares traded 3.4 percent higher at 28.70 rand as of 11:12 am in Johannesburg.

They declined about 15 percent after Gordhan’s resignation to the close on October 17.

Under Gordhan’s leadership, PPC has expanded its presence in Africa to offset slowing growth in its domestic market.

The company has boosted its presence in countries such as the Democratic Republic of Congo, Algeria and Ethiopia as it targets 40 percent of sales outside South Africa by 2017.

“PPC is a strategically important company to this country and restoring continuity to strategy and operations is vital,” Levin said.

“If not, there is a risk executives will leave.”

Azola Lowan, PPC’s head of investor relations, didn’t immediately respond to phone calls and e-mails seeking comment.

Chief financial officer Tryphosa Ramano didn’t answer a phone call requesting comment. - Bloomberg News

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