The CE who refused to go quietly when he got the boot
ZILLA EFRAT Looks at the biggest unfair dismissal case yet in SA
MANY a company director has left early "to pursue other interests" or on early retirement for "health reasons".
But Peter Brereton, 53, the former head of Batecor - an engineering equipment company in the Edward L Bateman (ELB) stable - refused to roll over quietly when he was told that his services were no longer required.
This week he sat in the Sandton labour court fighting what is believed to be the biggest unfair dismissal case in SA history.
His claim against the ELB group tops R20-million and his allegations against it include nepotism, not following proper procedures and using a "Kangaroo court" to dismiss him.
This time last year, however, Brereton was seemingly riding high as he travelled the world checking on Batecor's offshore operations.
The would-be artist appears to have built up a solid career which began when he sailed through an engineering degree (cum laude) at Natal University, where he received a prize as best engineering student.
After studying for an MBL part-time, he headed many of the ELB group's operations and helped list Batecor in December 1994.
He earned R800 000 a year and, he claims, he had no reason to believe his employers of 18 years were unhappy with him. Yet mounting business problems were giving him - and his bosses - sleepless nights. First, the earnings forecasts he had made when Batecor listed failed to materialise for the year to June 1995 because of a delay in two contracts.
Second, Batecor's information technology subsidiary Computer Alliance was becoming a problem.
According to evidence given in court this week, Computer Alliance had moved from profits of R3.1-million at end-June 1993 to a loss of R32.8-million at end-June 1996 after overheads rose faster than sales and provision for obsolescence in computer stock escalated over time.
Despite at least three top management changes made by Brereton, Computer Alliance's performance was not improving - a major reason why Batecor warned in May 1996 it would not meet its profit forecasts for the year to June.
Still, Brereton was taken aback when he returned to work on June 19 last year from a business trip to find that his job was in danger.
His legal team claims that ELB chairman Bill Bateman said to him: "Now that Anthony Fletcher has sold out of Rhoex, I want him to take over."
Brereton was told that Fletcher, who is Bateman's son-in-law, would become chairman of Batecor and Errol Gregor its MD.
The possibility of promoting Gregor, formerly chairman of Batecor's infrastructure division, had been under discussion for some time but Brereton was assured by Bateman that his position was not in danger.
Fletcher had previously worked for stockbroking firm Ivor Jones Roy, as well as the ELB group, and was a non-executive director of ELB before resigning in 1995. He had become chairman of vanadium producer Rhoex before selling out.
In the 1996 annual report, Bateman says: "He (Fletcher) has now had good experience in operating in a high risk cyclical business, and brings with him a mature business risk assessment ability."
After Brereton's departure - recorded in the annual report under "resignations/terminations" - it was announced that Batecor had incurred a R22.3-million loss for the 1996 financial year, against a profit of R21-million the year before.
Problems at Computer Alliance and Metquip, a process plant and equipment operation in Australia, were to blame. Together these accounted for losses of about R40.3-million while the rest of Batecor turned in a profit of R18-million.
Batecor's share price has fallen from 400c at the time of listing to an all-time low of 120c, despite a rights issue, which reduced gearing, and the sale of Computer Alliance to Q Data.
ELB was registered in 1930 by Bateman's grandfather, Edward Latrobe Bateman, an importer of mining equipment, and has been headed by Bateman family members ever since.
Bateman, who joined the group in 1960 and is believed to have three daughters, turned 61 earlier this month - an event which must have tongues wagging about succession. He has, however, kept silent since news broke of Brereton's official suspension at a Batecor board meeting on July 18 last year. At the time he said no fraud was involved but declined to comment.
In September he wrote in the ELB annual report that because of problems, "it was deemed essential to make management changes at the highest level in Batecor".
He continued: "Amazingly the incumbent is convinced this is unfair, and the matter will now have to follow the legal course, unpleasant as it may be for all concerned.
"However, we are confident we have not acted in any manner that is not in the interests of shareholders."
The main objective of Brereton's legal action, says his attorney, is to be reinstated in his former position. Failing this, he will seek R13-million for lost rights on a share incentive scheme and R7-million for the loss of employment and injury to his reputation.
ELB's defence is focused on Batecor's performance and who should be held responsible for it. It also denies any conspiracy or "smoking gun" in the case.
After the opening addresses made in court by each side the previous week, proceedings started on Monday with the ELB team calling its first witness, ELB financial director John Hooper, who had been part of an inquiry that led to Brereton's dismissal.
In its cross-examination, Brereton's lawyers homed in on the issues of culpability and responsibility.
Hooper claimed that Brereton had taken Batecor into the IT business in a big way. "He was chairman of Computer Alliance. The results are to be found in the numbers. And when the numbers are poor there is no doubt that the chief executive will be held accountable for that."
However, when asked what Brereton had done that was inconsistent with what a reasonable chief executive would have done, he said: "That is not a question I can answer. I am not a chief executive of an organisation and I am not in a position to say what chief executives should or should not do."
Hooper could not recall any warnings made about "malperformance" on Brereton's part at any ELB or Batecor board meetings.
He agreed that the ELB group's boards were structured in a way that ensured all members were privy to information relating to - and problems experienced by - its subsidiaries.
He said Computer Alliance's problems often came up at board meetings. At one stage the Batecor board debated selling it but decided not to.
Hooper said he was aware of comments made by his colleagues in the inquiry that "provided Mr Bateman has lost confidence, that's it, (Brereton) will go".
However, Hooper maintains he went into the inquiry "with an open mind, seeking to understand, to be impartial, to be fair".
The inquiry had been called by Bateman to look into the adequacy of Brereton's managerial ability and competence.
Brereton has, however, objected to the three people heading it, alleging that each had a conflict of interest related to the task at hand.
In their opening address, Brereton's lawyers describe the inquiry as a Kangaroo court, claiming that witnesses were withheld, cross-examination of witnesses was not permitted and speed was emphasised throughout the process.
They also allege that a decision to recommend a dismissal had been reached before the inquiry started.
Bumping into Brereton at the golf club the day before the Bateman board was to consider his position, Bateman is said to have suggested that Brereton still had a last chance to do the "honourable thing". He is alleged to have said: "Come in tomorrow and resign."