Boas Seruwe, chief executive officer of poultry producer Daybreak Farms, has been sent packing by the company’s board following months of rising tensions between the two parties.
In the termination letter sent to Seruwe dated May 11, 2021, the board says its relationship with Seruwe has “irretrievably broken down, and there exists no prospects whatsoever that the employer/employee relationship can be salvaged or improved in any way”.
“The employment contract has become unbearable for the company in that it will no longer be in the interests of the company to have an unworkable relationship between the board and its management – with the latter being led by you,” the board said.
Daybreak Farms is one of the country’s leading poultry producers. It is wholly owned by the Unemployment Insurance Fund (UIF), the Compensation Fund, and the Government Employees Pension Fund (GEPF) and is represented by the Public Investment Corporation (PIC) as an agent.
Seruwe’s axing follows the finalisation of a forensic report titled ‘Fox in a chicken coop’ in March by business advisory firm Schaefer Schmidt following Seruwe’s suspension in February. The report was adopted by the board shortly after its finalisation and was also shared with Daybreak’s agent the PIC.
The report looked into various allegations against Seruwe including gross insubordination, fraud and corruption, and gross dishonesty where he is accused of circulating a report to the board which allegedly detailed damning findings against the company’s manager for legal and compliance. Investigators also looked into allegations of flouting procurement policies and the irregular appointment of some employees.
The report made various adverse findings against Seruwe including the irregular appointment of employees and that he was a part of a scheme that allegedly siphoned funds out of Daybreak Farms to the tune of R136 million.
The report indicated that there should be further steps taken by the board in its remedial action plan to submit the forensic report to the law enforcement agencies who will further investigate possible money laundering, racketing, and fraud at the company.
In a notice sent to Daybreak’s employees on the same day Seruwe was fired, Daybreak chair Lerato Nage said the company’s chief financial officer, Cobus van Niekerk, will continue in his role as acting CEO while the company searches for a permanent CEO. The notice has been seen by Moneyweb.
Van Niekerk was named as acting CEO despite him being named along with Seruwe as one of the beneficiaries of the scheme that allegedly syphoned funds out of Daybreak over a period of a year.
In emailed responses to Moneyweb, Nage said: “the board is cognisant of the need to be fair and non-selective in implementing the findings of the forensic report. It must be noted, however, that that includes putting the long-term sustainability of the company first and ensuring that it continues to be a going and thriving concern. This means that the board has a duty to implement the findings of the forensic report in a responsible manner that will ensure minimal disruption to operations.”
Seruwe, who was appointed as Daybreak’s CEO in May 2018, has rubbished the findings of the report saying that they are “devoid of truth”.
“I am not corrupt and have never been corrupt. I have been suspended because I did not want to be involved in corrupt activities,” Seruwe said.
He previously told Moneyweb that the relationship between himself and the board broke down after he, together with other senior managers at Daybreak, sent a letter to the PIC to “complain about the board”.
He said the PIC acknowledged the letter, which was sent to the fund manager last year before his suspension.
The PIC has previously told Moneyweb that it is aware of the forensic investigation against Seruwe.