A source close to Alexander Forbes said between six and eight strategic meetings were held between African Rainbow Capital (ARC) co-chief executive Johan van Zyl and Alexander Forbes non-executive directors between January and September last year. Both Darfoor and Ford-Hoon were allegedly excluded from such meetings.
The source said the September meeting was probably the one that sealed Darfoor’s fate.
“I am not aware of any other shareholder that got a specific meeting with the entire board (less executive directors) to discuss strategy,” the source said.
“To say this approach to engaging with an external shareholder is highly atypical would be an understatement, and smacks of poor judgement, not to mention questionable governance, given that ARC already had a shareholder representative in Bridget Radebe on the Alexander Forbes board.”
The Alexander Forbes board in September abruptly informed the market of Darfoor’s exit, citing “loss of confidence and trust”.
Darfoor has taken his case to the Commission for Conciliation Mediation and Arbitration.
Nonkululeko Nyembezi, Alexander Forbes’s chairperson, did not directly respond to questions on whether it was appropriate to have a key strategic meeting and discussion involving non-executive directors in the absence of both the chief executive and the chief financial officer, who were both board members and executive directors.
“It is a critical part of my role as independent chairman to ensure the segregation of shareholder and board matters, as well as the proper handling of any potential conflicts of interests of any of the directors on the Board, which principles are supported by documented processes,” Nyembezi said.
However, ARC spokesperson Ainsley Moos confirmed the said meeting.
“Dr Johan van Zyl was invited by the board of Alexander Forbes to present his views on company strategy. It is not for ARC as a shareholder to decide who is invited to the meeting. That is the prerogative of the board. The board by virtue of the chairperson decides who is invited and who is asked not to attend,” Moos said.
Darfoor fell out of favour with ARC when it questioned his Ambition 2022 strategy for the group focused on driving growth through expanding its retail business segment, alongside expansion in sub-Saharan Africa through selective bolt-on acquisitions.
Van Zyl in his letter to some board members nine months before Darfoor’s exit made it clear that Alexander Forbes must stay out of the insurance business and curtail its retail ambitions to minimise the overlap with Sanlam.
“I would urge you to rather than play in the capital intensive areas like insurance (both life and general) and credit directly, partner with people who are credible and proven players in this area, where Alexander Forbes only/mainly focuses on advice and distribution as its core contribution. Of course, we have a bias here in that we want to minimise overlap between Alexander Forbes and Sanlam,” Van Zyl wrote.
Van Zyl is also Sanlam’s chairperson and the chief executive of Sanlam’s biggest shareholder, Ubuntu-Botho.
Darfoor’s exit saw a rapid management exodus, with Ford-Hoon resigning just a week after his departure. This was followed by group risk officer Vishnu Naicker, chief human resources officer Christian Schaub, chief executive of Alexander Forbes Investments Leon Greyling, chief executive of corporate and employee benefits Tony Powis, the head of retail financial services Sugendhree Reddy and chief empowerment and transformation officer Thabo Mashaba in a period of less than four months.
Sources at the group said these resignations were all forced, with trumped-up allegations made against the individuals, with them being given the choice to resign or address the charges.
They chose to resign. These allegations have been denied by Alexander Forbes.
ARC bought a 10 percent stake in Alexander Forbes in January 2017.