The University of Fort Hare (UFH) has agreed to let its chancellor Danisa Baloyi "step aside" until the outcome of the investigation into alleged irregularities at Fidentia, the university said on Saturday.
This follows her removal on Tuesday from the board of the Absa Group and Absa Bank, which, according to the bank, was due to public disclosures related to Fidentia.
UFH council chairperson Pepi Silanga said: "Council of the UFH, at its meeting of Friday, March 23, 2007 received a letter from Dr Danisa Baloyi requesting to 'step aside' in her capacity as chancellor of the university until the outcome of investigations into the alleged irregularities with respect to Fidentia and related matters have been completed.
"Dr Baloyi indicated to Council that her decision is based on keeping the interests of Fort Hare 'foremost in her mind', and creating space for the University to 'factually assess the situation'.
"After due consideration, council has granted Dr Baloyi's wish. Council subscribes to the principle of 'innocence until proven guilty' and therefore wishes for same to be duly accorded to Dr Baloyi."
Baloyi intends challenging the Absa move saying: "I stand guilty of no offence under the Company's Act, Banks' Act and Absa's Regulations ."
Fidentia boss J Arthur Brown and fellow Fidentia director Graham Maddock were arrested by the Scorpions on March 6, on fraud and theft charges involving at this stage just over R200-million.
A Financial Services Board report on Fidentia Asset Management (FAM) accused Baloyi of being exposed to a conflict of interest in her role as a trustee on the board of the Living Hands Trust, the Mail & Guardian reported earlier this month.
Baloyi and fellow Living Hands trustee Hjalmar Mulder were both directors of Fidentia Holdings, the sole shareholder of FAM, the company managing the Living Hands Trust, the newspaper reported.
Fidentia's curators uncovered an R8-million loan Fidentia allegedly paid to her - which Fidentia executive chairperson J Arthur Brown denied had been written off, saying that it was a legitimate loan to help her capitalise her business assets. - Sapa