EOH mum as three directors resign

Three long-serving executives at EOH have resigned, leaving the struggling technology group as it seeks to clean up its image following corporate governance scandals.

No reasons have been given for the departures and EOH declined to comment.

Since 2017, the company has faced a number of allegations that have sent its shares plunging. About R1.7bn, or 37% of shareholder equity, has been wiped out since January. The bulk of the decline happened after Microsoft cancelled a contract with the company.

In recent months, the group has changed executive leadership, suspended employees, launched an internal investigation into possible corruption in the company’s bidding for several government tenders, and started selling noncore assets all in a bid to strengthen its governance and reduce the size of the group.

EOH is under a new management team that is led by CEO Stephen van Coller and recently appointed chair Xolani Mkhwanazi. Van Coller has been leading the probe into EOH’s past contracts with the state

since he took the helm in September 2018. The findings of that probe will be released on July 16.

The group said nonexecutive director Pumeza Bam; executive director and former group CEO and CEO of subsidiary Nextec Zunaid Mayet; and executive director and CEO of EOH’s ICT business Rob Godlonton had resigned from the company.

All three will be stepping down from their various positions held in EOH and its subsidiary boards. Bam left last Friday, while Mayet and Godlonton will leave at the end of October.

Peter Takaendesa, portfolio manager at Mergence Investment Managers, said it was very surprising to have two divisional heads resigning at the same time, especially as the company tried to streamline its business.

Takaendesa said it was unlikely that Mayet and Godlonton were implicated in the investigations at the company. If so, then they would have been suspended with immediate effect. Allowing for a handover period would go against good corporate governance.

The company said that Van Coller and group financial director Megan Pydigadu would assume a “caretaking leadership role” for the ICT and Nextec business units on an interim basis to “ensure that staff remain engaged and that seamless, high-quality client delivery continues”.