Pretoria High Court rules Sarb, PA acted unlawfully in blocking Sipho Pityana’s Absa chair appointment

The Pretoria High Court determined that the South African Reserve Bank (Sarb) and its Prudential Authority (PA) acted outside the bounds of the law in their objections to Sipho Pityana's appointment as chair of Absa Bank in 2021.

Pityana sought a declaratory order asserting that Sarb’s conduct was unlawful, arguing that their informal interventions breached established legal protocols. According to the legal papers served to the PA, the authority halted his chairmanship bid by conducting an informal process that involved consultation with third parties, including former Absa CEO Maria Ramos, to assess his suitability for the role.

The PA's concerns emerged after Absa's succession committee identified Pityana as the sole candidate to succeed Wendy Lucas Bull, who was set to resign in March 2022. In an unexpected move, Absa ultimately appointed Sello Moloko as chairperson instead.

This situation escalated as discussions regarding Pityana's appointment took place outside the formal procedures laid out in the Banks Act, raising serious questions about adherence to the guidelines governing banking appointments.

Having joined the Absa board in 2019 and elevated to lead independent director by June 2020, Pityana’s career faced a turbulent shift following his resignation from AngloGold Ashanti in December 2020 amidst allegations of sexual harassment, which he has adamantly denied. This earlier controversy resurfaced when Absa dismissed him from its board, claiming he breached his duties as a director by filing suit against the PA.

In 2021, the Absa Group and Absa Bank Boards removed Pityana from their ranks, stripping him of his position as lead independent director and chair of the remuneration committee.

Judge Flatela Luleka, in a compelling judgement, emphasised that there was no credible evidence countering Pityana’s claim of being in line for the chairperson role at Absa. “I conclude that [Pityana] was poised to be nominated for the chairperson position of Absa. There does not appear to be any credible evidence before me to gainsay this position,” Judge Luleka stated.

Furthermore, the judge acknowledged that the matter raised significant legal issues of public importance, necessitating the court’s adjudication. “The relief sought by the applicant is justified,” he pronounced.

Neither Sarb nor the PA were available for comment following the ruling, and attempts to reach Pityana went unanswered. Pityana's legal struggle, however, extends beyond this recent decision; he is also contesting his removal from the Absa board through separate legal avenues.

He contends that the result of his current application could set important precedents for governance and illuminate the relationship between the PA and banking institutions in South Africa.

In concluding the matter, the court affirmed its status as one of public significance, with potential implications for future governance structures—a reminder of the tightrope that regulatory bodies must walk in overseeing corporate leadership.

This article was originally published in Business Report

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