(Bloomberg) -- In just two weeks, Mark Lamberti swapped his long-held membership of South Africa’s business elite for the status of a pariah.
The 67-year-old Harvard Business School alumnus is stepping down as chief executive officer of Imperial Holdings Ltd. after a court ruled on April 4 that he had insulted a former employee by referring to her as a “female employment equity” appointment, a reference to a South African requirement to hire non-white staff to address inequalities built up during apartheid. He has already resigned from the board of state-owned power utility Eskom Holdings SOC Ltd. and an influential business lobby group.
The departure represents a dramatic fall from grace for Lamberti, who just three months ago was appointed by President Cyril Ramaphosa to help clean up Eskom after years of corruption and mismanagement allegations during the era of former President Jacob Zuma. He left the company adamant that the social-media backlash to the judgment had been overblown and “fueled by a political agenda,” yet Public Enterprises Minister Pravin Gordhan accepted his resignation without public comment.
Though he apologized for his remarks, Lamberti had little choice in a society still overshadowed by the legacy of white-minority rule. While apartheid ended in 1994, white South Africans account for more than 68 percent of top management positions even though they represent less than 10 percent of the economically active population, according to a study on behalf of the Department of Labour.
‘Had to Go’
And while the Pretoria High Court didn’t find the CEO guilty of racial or gender discrimination, the suggestion that the head of a company with an overwhelmingly white male leadership would be biased against an Asian woman was always likely to provoke a reaction.
“If we are looking to clean up shops in corporate South Africa, he had to go,” Owen Nkomo, the founder of Johannesburg-based money manager Inkunzi Wealth Group,” said by phone. “It’s important that this has happened. It says to the rest of the CEOs out there that they should behave themselves.”
A spokesman for Imperial didn’t immediately respond to a request for a comment from Lamberti.
Lamberti rose to prominence in the 1980s as the founder and CEO of Massmart Holdings Ltd., a general goods retailer that was sold to Wal-Mart Stores Inc. in 2011, by which time he had become chairman of the Johannesburg-based company. He’s also served as an executive and non-executive director for computer-services company Datatec Ltd., fixed-line operator Telkom South Africa SOC Ltd, and technology group Allied Electronics Corp.
As head of Imperial, a vehicles and transportation business, he’s overseen an almost 40 percent rise in the share price in his four years at the helm and was in the process of splitting the company in two when he resigned. The stock slipped as much as 2.8 percent before rebounding to trade 0.8 percent higher by the close in Johannesburg Wednesday.
Imperial is addressing failures in the company’s broader gender and race relations culture as highlighted in the judgment, it said in a statement announcing Lamberti’s departure. In the court ruling, Judge Pieter Meyer found that it was “undisputable” that AMH, the Imperial division where Adila Chowan, who brought the complaint against the CEO, worked as a senior financial manager, had “fared very badly in redressing the balances and wrongs of the past.”
Osman Arbee, Imperial’s chief financial officer from 2013 to 2017 and the current CEO of the vehicles division, will replace Lamberti on May 1. He’ll be responsible for completing the planned split of the company into separate logistics and autos companies, with the latter due to be spun off into a newly listed entity.
Lamberti is directly involved with a number of South African educational institutions, including Wits Business School in Johannesburg, according to Business Leadership South Africa, which he quit on Monday.
“Lamberti has done the right thing for Imperial shareholders in terms of being politically correct in this current environment,” Ron Klipin, a senior analyst at Cratos Wealth in Johannesburg, said by phone. “He is a really strategic thinker and is in a class of his own. I am sure Lamberti will give back to society in a different way.”
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