R36,7-m claim against Pepkor
Alida de Beer
Mr. Tekkie CEO Bernard Mostert is claiming R36,7-million from Pepkor for income forfeited as a former director of Pepkor Speciality. He filed his claim in the Western Cape High Court on 19 February, alleging breach of contract by Pepkor.
Mostert was the CEO of Tekkie Town when the business was sold to Pepkor Speciality in September 2017. Pepkor was then known as Steinhoff Africa Retail (Star). At that stage Steinhoff International had a 76% stake in Star. Shortly after the sale of Tekkie Town, on 1 October, Mostert was appointed by Pepkor Holdings as a director of Pepkor Speciality for a term of five years.
The employment contract stipulated that his employer would not, without good cause, hinder or undermine him in his duties as CEO. According to Mostert's submission, this is what started happening as from 19 April 2018 through the conduct of Pepkor's chairman Jayendra Naidoo, the CEO Leon Lourens, CFO Riaan Hanekom and other executives. This they did by intentionally excluding him from operational meetings dealing with the businesses of Pepkor Speciality and Tekkie Town.
They furthermore awarded a contract to Steinhoff Risk Solutions "without reasonable commercial basis" and despite his (Mostert's) objections. A decision to award share grants to him and senior members of his executive team by the Pepkor remuneration committee was also "unreasonably" overruled.
Mostert submits that he was moreover instructed by Pepkor Holdings to vote in favour of a board resolution binding Pepkor Speciality as a guarantor in respect of a R16-billion refinancing arrangement. This was to pay off a loan Pepkor owed Steinhoff whose shares had by then plummeted amid allegations of massive fraudulence. According to the court papers, Mostert was expected to vote without Pepkor providing him with the information and documentation he needed to determine if Pepkor Speciality could validly pass these resolutions in compliance with the rules on financial assistance to "related / inter-related" companies and directors
in accordance with the Companies Act. This was despite his requests for this information.
Pepkor also disregarded his request that members of Pepkor Speciality's board of directors with a personal financial interest in the refinance arrangement disclose it and abstain from voting on the resolution, in accordance with the Companies Act.
He furthermore says they also went back on an undertaking they gave him that they would not replace employees of Tekkie Town with employees of Pepkor.
They also told David van Niekerk, Pepkor Speciality's COO and a senior member of Mostert's executive team, that there was no place for him (Mostert) at Pepkor Holdings or Pepkor Speciality.
On 25 June 2018, Mostert says he accepted this repudiation of Pepkor Holdings and notified them that he chose to cancel the contract.
The amount he claims includes his annual salary as agreed for a period of five years, two incentive bonuses, and an amount he would have earned in terms of a retention agreement.
Pepkor said it refutes these allegations and will defend its position through the legal process.