The Zesa Holdings board of directors is divided over a case where the executive chairman Sydney Gata is suing the power utility of US$10m in lost value for a yesteryear severance package that was paid in local currency.
The move has been branded by a certain section of the board of directors as a clear conflict of interest considering that the same board which Gata heads is supposed to defend the lawsuit.
Gata was appointed in November last year with a mandate to rebundle the units he had unbundled during his tenure at the power utility. He left Zesa in 2006.
In 2018, Gata took ZESA to court demanding an additional $10m on his severance pay arguing that his original exit package had been eroded by ZESA’s lack of salary records, hyperinflation and exchange rate movements.
As severance, Gata got payments of ZWL$18,313,477, 606 in 2007, ZWL$59,615,494,451,934 in 2008, US$292,723 between 2015 and 2016, plus two Mercedes Benz vehicles, one SUV, and a home in Umwinsidale.
A well-placed source told Business Times that this awkward situation has since forced the board to excuse Gata in all meetings where this lawsuit issue will be deliberated.
“The board is in a dilemma on how to proceed with this matter considering the conflict involved,” the source said.
Gata told Business Times yesterday he is not going to accept a private settlement on this matter and he rejected such offers on the basis of principle and not value.
“Only the courts will determine who is right or who is wrong. I very much
believe I am entitled to a lawful determination of the dispute under our esteemed constitution and I will not accept a private settlement on this one. I have rejected such offers on the basis of principle and not value,” Gata said.
“I also made a full declaration to the state from when I was first invited to rejoin ZESA and to the ZESA board at its very first meeting. So if you have a “big story” here I suspect it will be a rather short one I am afraid.”
The appointment of Gata came despite strong reservations by proponents of good corporate governance and human resources experts.
Energy and Power Development Minister Fortune Chasi announced a new board of directors for the State power utility and revealed the board will be led by Gata in an executive capacity.
Chasi justified Gata’s appointment and the creation of an executive chairman post saying Zesa needed a chairman who is “in situ on a day to day basis” and that Gata was the best man suited for the job.
Gata was first appointed as chief executive of ZESA in 2000, before assuming more power in 2003 as executive chair.
This was, in fact, his second stint at the helm of the company. Previously, he had been the general manager, before leaving the organisation.
Since his departure, Gata has occupied himself with suing the company he now has to lead.