CEO battle is bad look for R62 billion giant in South Africa

The recent resignation of Nombasa Tsengwa as CEO of Exxaro is not a good look for the company.

Tsengwa resigned with immediate effect from her position on Thursday, 6 February, after failing to get a suspension she was placed under in December lifted.

Tsengwa has served as CEO of the group since August 2022 and was a previous winner of the Standard Bank Businesswoman of the Year Award.

She was placed on precautionary suspension in December 2024 until an investigation into allegations by ENS over her conduct was finalised.

The allegations were related to workplace conduct and governance practices.

Although she approached the Pretoria High Court seeking to challenge her suspension, a judge on Wednesday, 5 February 2025, ruled that the matter was not urgent.

As reported by the Business Times, a source close to Tsengwa said that personnel information was included in the charge sheet delivered earlier in the week, which was not part of the investigation’s scope.

The source called the investigation a personal attack on the former CEO. The investigation is expected to be concluded soon, with a report set to be submitted to the board.

Moreover, the source claimed that the board supports Kgabi Masia, the head of coal operations, who was served a suspension notice by Tsengwa while on a work trip to Switzerland in November.

The CEO and board conflict could have bad results for the coal miner, which has a market cap of R62 billion.

Yonelisa Petse of Aeon Investment Management criticised how the board of the coal miner handled its disagreement with Tsengwa.

Petse said that the situation raises questions about the board’s oversights and why these issues weren’t addressed earlier.

The oversight of the board has thus been brought into question with the allegations, which may be true or not.

He said that investors will likely exercise caution when dealing with the company. 

Although the company’s survival is unlikely to be threatened due to its essential role in the energy sector, investor caution could lead to a governance overhang, increased M&A risk and valuation impacts.

The battle between Tsengwa and the company may also continue, with the former CEO unhappy with how the disciplinary process was handled.

Meanwhile, the fight between Exxaro and Tsengwa might not be over.

Her resignation also comes amidst a major shift from the company as it looks to diversity away from coal, which is the dirtiest fossil fuel.

Following the failure to purchase a copper mine, the company is looking into investing in manganese, which is essential for steel, iron and electric car production.

The company has reportedly discussed the potential acquisition of the Tshipi Borwa mine in the Northern Cape.

CFO Riaan Koppeschaar will continue as acting CEO until a permanent replacement is found.