BG reporter

Gareth Penny, the current chairman of Debswana Board of Directors, is expected to resign from the position when the board meets in the second week of August, Botswana Guardian has learnt.
Last week, Penny surprised the diamond industry when he announced that he would be leaving De Beers where he has been Chief Executive, in the ‘coming months’. In an interview on Wednesday, Debswana’s Public and Corporate Affairs Manager Esther Kanaimba-Senai confirmed that the board would be meeting next month. She however refused to state the agenda for the board meeting. Meanwhile Debswana this week indicated that Penny has not announced his resignation as yet from the board chairmanship. Kanaimba-Senai said no official announcement has been given on his pullout. “He is still a board chairman until an announcement is made,” she said Tuesday night.
Penny was this year appointed chairman for the De Beers-Botswana government owned entity for a two-year period. He took over from permanent secretary in the Office of the President Eric, Molale who took the chairmanship halfway through after Akolang Tombale, former PS at Minerals, Energy and Water Affairs, left the civil service. Government and De Beers share the Debswana chairmanship on an interchangeable basis.
Kanaimba-Senai said over the years the chairmanship of Debswana board has been held by people who were either working for De Beers or government of Botswana. Kanaimba-Senai said it is likely that when Penny finally leaves De Beers, a new person from the Beers side would be appointed to head Debswana board of directors. “But this is a decision which would be made by the shareholders themselves,” she added.
Botswana Guardian has been informed that Penny first made his intention to quit the world’s largest diamond producer at a De Beers board meeting in Lichtenberg last week. The company has since appointed Chief Financial Officer Stuart Brown and Chief Commercial Officer Bruce Cleaver as interim joint CEO’s. Currently, government of Botswana holds 15% shares at the company while Anglo American and the Oppenheimer family hold the rest.
Reached for comment this week, Gabaake Gabaake, a board member of De Beers would not be drawn into discussing the matter. Gabaake is also the permanent secretary at the Ministry of Ministry of Minerals, Energy and Water resources. Currently, PS in the ministry of Finance and Development Planning Solomon Sekwakwa and Gabaake represent Botswana in the De Beers board. In an interview with Botswana Guardian two months ago, Penny said the industry is showing signs of recovery after the US-induced recession that affected diamond sales and production greatly.
Meanwhile, De Beers Botswana office has confirmed that even as Penny is yet to officially leave the company, the search for a suitable candidate has begun. “The recruitment process has began but as Gareth resignation will not take effect until later in the year and by putting in place a transition management team, it means we can take time necessary to identify the right candidate,” said Communications Officer, Chipo Morapedi, in response our questions.
Asked how the sudden pull out of Penny would affect the company Morapedi said nothing changes. “Our current strategy is proving, as the H1 2010 results show, to be very effective. We continue on that course to maximise the value and life of diamonds,” she added. The company’s rough diamond sales surged by 84% to $2,6 billion and production doubled to 15,4% compared to the same period last year.
International Business Times said this week that, Penny might have been blamed for the $1 billion rights issue that was finalised in February this year. As a shareholder, Botswana also forked P1 billion to help inject capital in the company. Did Penny leave the company out of personal or work related reasons? “Gareth said at the start he wanted to do 4-5 years as CEO and then to do something else,” said Morapedi.
She said the idea that Penny would want to take on a completely different challenge was quite understandable given that De Beers has successfully navigated through the economic recession. Penny has served in various capacities at the world biggest diamond producer for the past 22 years.