‘Pay me what you paid the white men’
Documents may shed light on black exec’s huge racism claim
Dimension Data chair Jeremy Ord ‘‘discovered’’ crucial documents related to a huge racism-based claim brought by Andile Ngcaba on the same day that a former board member contradicted Ord’s claim that the documents never existed.
The new twist in the saga, which has pitted Ngcaba, a former executive of Dimension Data, against Ord, the veteran chair of the IT giant, emerged in a supplementary affidavit filed by Ord, which explicitly reverses his earlier claims.
Ngcaba is seeking R271m from his former employer, claiming he was not paid the same as members of the team that reported to him. He cites as respondents Dimension Data, Japanese parent company Nippon Telegraph and Telephone (NTT) and Ord. The case is due to get under way in the Johannesburg high court on Tuesday.
Ord’s claim that minutes of the company’s remuneration committee (Remcom) never existed were contradicted by former Dimension Data board member Wendy Lucas-Bull, doyenne of corporate governance in SA and the current Absa chair.
Her affidavit drew a quick reversal from Ord, who nonetheless downplayed the significance of the development.
Ord, responding to Lucas-Bull’s claims, states that before delisting in 2010 he and Brett Dawson, acting Dimension Data CEO at the time, would be invited to Remcom meetings.
“Although I had no independent recollection of this prior to seeing Lucas-Bull’s affidavit, I now know that there were indeed minutes taken of the Remcom meetings …”
Ord says initial inquiries found no minutes, but subsequent investigations ordered by him turned up minutes from NTT’s company secretary in the UK.
He said there had been no “mala fides” in not initially providing the minutes.
“None of the defendants were in possession of minutes of the meetings of Remcom prior to delisting,” he says.
The case is one of the biggest claims of its kind against a South African company and could open the floodgates for aggrieved employees seeking pay parity, with experts saying cases of discrimination in large and small organisations in SA are becoming prevalent.
Ngcaba, an information and communications technology specialist who was a director-general of the department of communications under president Thabo Mbeki, has described the lawsuit as the biggest case of corporate racism and BEE irregularities in SA to date.
In court papers, he claims that over a period of 12 years after his appointment in 2004, some white executives who reported to him were, unbeknown to him, paid large bonuses from which he was excluded.
Ord, Dimension Data and NTT expressed surprise that Ngcaba would accuse a company he led for years of racism.
Lucas-Bull served as a Dimension Data board member between 2005 and 2011.
She says in her affidavit: “On 8 May 2006 I was appointed as chairman of the remuneration committee, which position I held until I ceased to be a member of the board.
“Minutes were taken of all meetings of the remuneration committee … that I chaired. Accordingly minutes of those meetings of the remuneration committee do exist.”
Ord found the minutes the day Lucas-Bull signed her affidavit. The minutes have now been handed over to Ngcaba’s legal team.
In his particulars of claim, Ngcaba says Convergence Partners Investments, of which he was the controlling shareholder, acquired an equity shareholding in Dimension Data Middle East and Africa at a mutually agreed price.
Before that BEE shareholding agreement was concluded in 2004, he says, he and Dimension Data concluded a separate agreement in which he was appointed to the “ostensibly” most senior position of executive chair.
He says he also concluded a separate oral agreement in terms of which Dawson gave him an assurance that he would always be remunerated in a manner that was equal to or better than the other senior executives.
Ngcaba says in April 2016 he became aware that Dimension Data was in breach of the equal treatment agreement in that, between 2004 and 2016, it had paid other senior executives — who were mainly white — more than him.
As a result of this, he says, he suffered damages of R261m.
In his second claim, for R10m, Ngcaba says that when he started to demand equal treatment as agreed, Ord said words to the effect that Ngcaba was in line to make “extraordinary amounts of money out of his BEE shares” and had made a “lot of money” from them.
“Such utterances and articulations were received … as constituting racially discriminatory slurs and insults specially and unfairly reserved for black businesspeople such as himself,” Ngcaba’s lawyers say in his particulars of claim.
His lawyers say Ngcaba’s feelings and dignity were, as a result, injured, harmed and impaired.
Dawson this week declined to comment. Ord, in his supplementary affidavit, says a distinction must be drawn between the functioning of the company’s Remcom before and after the company delisted.
“Following the delisting, Remcom was comprised of the CEO of NTT, Hiroo Uncura (based in Japan), Brett Dawson and me. No minutes were taken at those meetings.”
In their initial affidavits, Dimension Data, NTT and Ord denied that theywere indebted to Ngcaba, claiming that even if there were any debt, it would have been extinguished given the time that has elapsed.
The three also deny that an equal treatment agreement was concluded between Dimension Data and Ngcaba, claiming Dawson had no authority to conclude such agreement on behalf of the company.
And they deny that remuneration paid to Ngcaba between 2004 and 2016 was less than that paid to other senior executives.
They say in order to compare the remuneration paid to Ngcaba and other senior executives during the period, the value of Ngcaba’s beneficial interest in Convergence has to be taken into account.
They say that members of the Convergence Consortium, which included Ngcaba Holdings, held 1,930 ordinary shares in Dimension Data upon the expiry on September 30 2011 of the shareholders agreement concluded in respect of the BEE equity ownership transaction with Dimension Data.
At the expiry of the empowerment period, Dimension Data purchased some of the consortium members’ ordinary shares.
Ngcaba Holdings received R135m for these shares.
The trio say Ngcaba Holdings had received a loan of R300m from Dimension Data on the basis that the 436 ordinary shares in Dimension Data retained by Ngcaba Holdings after the expiry of the empowerment period would be held as security.
They say the agreement was that, if at a future date when the 436 shares were purchased by Dimension Data from Ngcaba Holdings and their value did not exceed R300m, the 436 shares would be transferred by Ngcaba Holdings to Dimension Data in discharge of the loan balance.
There were settlement negotiations pertaining to the termination of the relationship between Ngcaba Holdings and Dimension Data. These negotiations culminated in a settlement agreement concluded in June 2017.
In terms of that agreement, a value of R5.15bn was ascribed to 100% of the ordinary shares in Dimension Data for the purpose of Ngcaba Holdings’ exit from the BEE equity ownership transaction.
They say Ngcaba Holdings was to receive payment of R204m for the residual equity stake in Dimension Data.
They argue that Ngcaba’s claim should be dismissed on the grounds that his enrichment as a result exceeded the R170m he claims as being the amounts by which the other senior executives benefited from bonus schemes.
Employment attorney Dunstan Farrell said cases of discrimination are becoming prevalent in many organisations, big and small, in SA.
“The main points of contention are that legislation has failed to deal adequately with unequal levels of remuneration on the basis of race as a consequence of the travesties of apartheid. Many employees and directors continue to benefit from the injustices of apartheid.”
Wits University School of Governance professor William Gumede said salary discrepancies between white and black executives and employees are “very common” in corporate SA. “I think we will be seeing more people taking it on. It is a rising trend. Something has changed the psyche of the people. People are more prepared to go to courts to fight their grievances,” he said.