Claims of carrying out purge of blacks

Roger Jardine, former chief executive of Aveng. File photo: Leon Nicholas

Roger Jardine, former chief executive of Aveng. File photo: Leon Nicholas

Published Oct 26, 2014

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Johannesburg - Construction group Aveng has been rocked by allegations of lack of transformation following the removal of a top black executive.

Aveng Trident Steel, a subsidiary of the JSE-listed Aveng Group, is being accused of purging top black executives who disagree with the company’s CEO after the departure of at least four top, black directors in the last two years.

The latest allegations have been sparked by the movement of Alph Ngapo, who has been the managing director but is being moved to a different role in the Aveng group.

Several current and former Aveng executives have supported claims that there appears to be a resistance to black executives at the construction company.

“The employment of black executives at Aveng Trident Steel is done simply to comply with Black Economic Empowerment (BEE) targets, as soon as you become too independent you are shipped out.

“There are many executives who have left the company because they were forced out. Some, especially the female execs, leave because they simply cannot stand being there.

“How does a self-respecting black woman stay at a company where she is undermined simply because they are black and female,” said one executive, who declined to be identified.

A number of black executives and managers have left the company in recent years, with many allegedly being offered hefty settlements to leave.

One former executive, who refused to be named as they had signed a confidentiality agreement, said it was a norm for black executives to be offered payouts to leave the company.

“What we are dealing with here is an entrenched system where blacks are employed to reach (BEE) targets, but as soon as they start thinking independently and questioning some of the things happening in the firm, they are removed.

“Issues like restructuring of the company and its subsidiaries are used as an explanation for people being moved around, but why is it only happening to black executives,” said the former executive.

She said the culture in the company, and the industry in general, was that succession and appointment to top positions were discussed by a few, already powerful individuals in the company.

Several insiders have cited the resignation of at least three top, black executives at the company in the last two years as indicative of a deliberate purge.

These include former director for business development Annie Tsima and two former human resources directors Nomie Ntsunguzi and Lorraine Modise.

Speaking to the Sunday Independent this week, Ngapo avoided answering a direct question of whether issues of lack of transformation within the company had been raised with him during his tenure. However, he said workers and unions had raised “historical issues” which the company was addressing. “The challenge of transformation is an industry-wide one, especially in the streel industry. But banks and the likes are also facing those challenges.

“We have lodged an Employment Equity plan with the department of labour and as a company we believe employees are the main resources that we have and we try to unleash the talent of both black and white employees,” said Ngapo.

He said there was nothing untoward about his move away from Aveng Trident Steel, adding he could not rule out another move in the future as his contract stipulated he could be moved strategically for the benefit of the business.

Aveng is one of the companies that were embroiled in the construction cartel scandal that saw construction firms collectively fined R1.4 billion this year. Allegations of lack of transformation in the construction and manufacturing sector were last year highlighted by Aveng’s former CEO, Roger Jardine, after he quit following the conclusion of the Competition Commission process.

Speaking at a public lecture at Wits University last year, Jardine said it was possible for construction companies to engage in such a large-scale cartel because of the lack of transformation in the industry.

Jardine also alluded to succession planning being done by a “small close-knit group of people, with hand-picked successors in the same circles”.

In his scathing lecture, he urged CEOs of these firms to demonstrate that they were making serious efforts to transform the companies from old organisational cultures.

“These leaders must now make more serious efforts to bring new people onto their teams, black professionals, women, and young bright engineers who do not carry the baggage of this cultural history,” said Jardine.

In its response to questions, the Aveng Group denied allegations of lack of transformation at the company or its subsidiaries. The company said it had an impressive transformation track record.

“Significant progress has been made over a relatively short period of time, with Aveng Trident Steel having improved its overall broad-based black economic empowerment (BBBEE) rating from a Level 6 to a Level 3 in three years by focusing on all aspects of the BBBEE code,” the company said.

The company said it was common practice to move people within the group given changing business requirements.

It said this was the case with the movement of Ngapo.

“Alph Ngapo was initially appointed at the corporate office from where he moved to Aveng Steeldale to stablise the business unit, and subsequently focused on the turnaround at Aveng Trident Steel.

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Sunday Independent

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