ARBITRATION FAVOURS ADCORP AND DISMISSES SENIOR EMPLOYEES
Johannesburg – Friday 6 November 2009
Human capital management firm Adcorp has been cleared in arbitration by a senior
advocate in the dispute regarding the suspension of the Group CFO, Faunce Burd, along
with five other employees.
The arbitrator Advocate Roland Sutherland SC, has found in favour of the company in
respect of all issues dealt with in terms of the arbitration agreement and has ruled that all sixemployees be summarily dismissed.
The employees had previously brought an action in the Labour Court requesting an urgent interdict to prevent the company from instituting any disciplinary action against them and demanding their immediate reinstatement following their suspensions.
The employees claimed they had been victimised having made a number of serious but
unsubstantiated allegations of fraud, corruption and racism against two senior company
officials which they claimed to be a “Protected Disclosure” in terms of the Protected
Disclosures Act.
In this regard, the arbitrator found that the fact that “they purported that what they were doing was covered by the Protected Disclosures Act has no merit and it is doubtful that they ever actually believed that it did”.
In addition, the arbitrator found against the individual employees to the dispute who made
these unsubstantiated allegations.
With regard to Faunce Burd, Peet Bierman, Lodewyk Koch, Jaco Boonzaaier and Francois van Emmenes, the arbitrator ruled that, “based on the evidence led and the conduct of these persons who have acted collectively and with a common cause, they are culpable of breaching the relationship with their employer”.
Citing aggravated circumstances, Advocate Sutherland SC said that, “They acted with self interest and spiteful conduct and they are all summarily dismissed”.
In addition, with regard to Anna Ramsden, Group Human Resources Manager, the arbitrator found that she acted in bad faith, improperly and outside of her authority, and contrary to the best interests of Adcorp.
He also found in favour of the company, with regard to her failure to disclose a personal
relationship with, and awarding business to a consultant Werner Barkhuizen.
In this regard, Advocate Sutherland SC ruled that “her conflicting interests made her act
inappropriately and she is guilty of misconduct”.
Adcorp CEO, Richard Pike said he was relieved that both the company as well as the two senior officials, against whom this vendetta was targeted, had been totally vindicated by the arbitrator’s ruling.
“This has been a particularly difficult time for the company as well as for the two senior
employees and their families who were targeted by these unscrupulous people.
“These individuals placed the interests of their own vengeful vendetta above the interests of the company and with no regard for the ruinous impact their actions would have on the reputations of good people.
“To achieve such an emphatic arbitration ruling should hopefully silence any critics who have doubted those against whom this conspiracy has been waged, the good name of Adcorp or my role in this matter,” said Pike.
In a bizarre twist, the six employees failed to show up at the arbitration hearing despite being signatories to the binding arbitration agreement. In this regard, a letter was submitted to the arbitrator immediately prior to the commencement of the arbitration stating that all six employees refused to subject themselves to the arbitration proceedings as they believed that they had been given misleading advice by their lawyers and indicating that they would attempt to resurrect their challenge in the CCMA in direct breach of the arbitration agreement which they had all signed.
“This sort of rogue behaviour has characterised these people from the outset. They have consistently and vicariously persisted in bringing wave upon wave of unsubstantiatedallegations against those people whose dismissal they sought and whose integrity they endeavoured to undermine.
“As each allegation has been systematically disproven, they then abandon that allegation
without so much as a retraction or an apology and replace it with a new allegation of equal folly. “With regard to the independent investigation I initiated in September to deal specifically with the concerns raised by this group of employees, they were happy to endorse and cooperate with the investigation until such time as the investigation found that there was absolutely no shred of evidence to any of their allegations of irregularity after which, they then refused to cooperate any further and turned their attentions to personally attacking the good reputation and integrity of the investigator.
“Similarly, two weeks ago, five of the six employees verbally agreed to accept a financial settlement with regard to concluding this matter and then subsequently reneged on that undertaking in what was now becoming an all too familiar pattern of behaviour totally lacking in accountability.
“Following this trend, they then duly signed an arbitration agreement ten days ago and
agreed to the appointment of a highly respected arbitrator, agreed to dates for the arbitration as well as to terms and then failed to pitch up, once again totally disregarding an agreement.
“In addition, they have consistently sought for their own personal gain and, as a highly
selfish extortion tactic, to trash the company’s fine reputation and good standing in the press. “Clearly these people don’t believe that the rules apply to them,” said Pike.
One of the issues that the arbitrator heard evidence on related to an allegation of “material misrepresentation and fraud” relating to an alleged overstatement of profit by Adcorp of R1,88m with respect to a profit share arrangement relating to a supplier of employee benefit products, Crestfin.
In this regard, the arbitrator accepted evidence that was led by Deloitte partner, Roy
Campbell, who testified that, based on the evidence submitted to the arbitration proceedings, there were no grounds to suspect either material misrepresentation or fraud with regard to this transaction.
“This particular issue seemed to be the allegation that gained the most prominence in the
press. As such, it is comforting to be able, once and for all, to dispel any suspicions with
regard to this matter and to finally put it to bed,” said Pike.
In addition, Adcorp also recently commissioned a further investigation by auditing firm KPMG to deal primarily with new allegations made by these employees subsequent to the initial independent investigation.
Although their investigations are not yet complete, no concerns regarding any of these
allegations have been raised by KPMG.
Given that the scope of KPMG’s investigations also covers certain suspicious transactions entered into by one of the employees now dismissed, the final report is still pending. Whilst Faunce Burd has been summarily dismissed as an employee of Adcorp in terms of the arbitration ruling, she has yet to be formally dismissed as a director of the company. The process to have her removed as a director will commence in due course.
Pike said that the focus of the management team was to concentrate on the business of
Adcorp given that the major distraction caused by this matter was now behind them.
“In this regard, the ruling by the arbitrator gives us the opportunity to move on and focus on the business of business.
“This incident has had the effect of pulling the group together. The support of our
shareholders, board, clients, suppliers, senior management and staff has been
overwhelming and, for that reason, I am hugely optimistic about the way forward.
“We now need to put this unfortunate incident behind us and concentrate on the exciting
opportunities our great business offers,” said Pike.
For further enquiries, please contact:
Mandy Jones
Adcorp Group Marketing Manager
Telephone : 011 244 5325