Adapt IT CEO takes leave of absence amid divorce battle, assault allegations — share price tumbles

Technology firm Adapt IT said its long-serving CEO Sbu Shabalala will take a leave of absence for three months to “attend to personal matters”. This comes in the wake of media reports at the weekend that he allegedly hired thugs to beat up the partner of his estranged wife. 

Adapt IT didn’t specify the “personal matters” that Shabalala had to tend to when the company made his temporary departure known on Monday 10 May in a JSE stock news announcement. 

However, the Sunday Times reported at the weekend that Shabalala allegedly hired armed thugs to threaten the partner of his estranged wife, Neo Shabalala. Neo’s partner, according to the newspaper, is suspended eThekwini city manager, Sipho Nzuza, who is in critical condition at a Durban hospital.  

The attack was so serious that Nzuza reportedly had to have his spleen and part of a kidney removed. Nzuza was suspended from the eThekwini municipality over corruption allegations. Read more here.

The Sunday Times cited an affidavit submitted by Neo at the Durban High Court, in which she claimed that five “heavily armed” men “brutally” assaulted Nzuza and threatened her and her friends at her upmarket Zimbali estate home near Ballito on 1 May. The couple have reportedly been estranged for the past four years and are undergoing divorce proceedings.  

The fallout from Shabalala’s drama has come in thick and fast.  

He has now taken leave from the top job at Adapt IT. Chief commercial officer Tiffany Dunsdon, who is also a long-serving executive director of Adapt IT, will take over as CEO on an interim basis, the company announced. 

The share price of Adapt IT reacted to news reports about Shabalala’s personal life. Adapt IT shares finished 13.14% lower on Monday at R6.15 — levels last seen in January 2019. 

The timing of these allegations against Shabalala is bad for Adapt IT. 

Two companies — JSE-listed Huge Group and Canada’s Volaris Group — are duking it out to acquire Adapt IT, which provides software solutions to the education, manufacturing, energy, financial services, communications and hospitality sectors. 

Huge Group is offering R5.52 a share to Adapt IT shareholders, in Huge shares, while the Volaris offer is an all-cash offer at R6.50 per share. Volaris is putting more cash on the table and its offer is preferred by Shabalala.

Both acquisition offers value Adapt IT at nearly R1-billion. The group is valued at just above R1-billion on the JSE. An Adapt IT independent board is expected to soon make a recommendation to the company’s shareholders about which offer to accept or reject. DM/BM