Defiance, loyalty to a ‘phantom’ board and the law

Inside the corporate coup at Naledi Funeral Planners – Will the ‘outsiders’ risk their own careers?

TEBOHO KHATEBE MOLEFI

In the high-stakes world of corporate governance, the board of directors is the supreme authority. It is the strategic brain, the fiduciary shield, and the ultimate decision-making engine of any company.

When a properly constituted board issues a lawful directive, management’s sole obligation is to comply – immediately and without equivocation. To refuse is not an act of loyalty to a previous regime; it is an act of corporate insubordination that strikes at the very heart of legal and operational integrity.

Yet, that is precisely the crisis engulfing Naledi Funeral Planners (Pty) Ltd. Following a reconstitution of its board at the January 16, 2026 Annual General Meeting and subsequent resolutions on April 29, 2026, a new, legally installed board – led by chairman Thabiso Gilden Madiba – has been met not with cooperation, but with a stunning wall of defiance from its own senior executives.

In a decisive, albeit nuclear, option on June 4, 2026, the board suspended Chief Executive Officer, Mosoeu D Mabote and Company Secretary and Head of Legal, Peter Matekane. The charges are damning – failure to attend board meetings, refusal to submit reports, allegedly misleading management that they could ignore board directives pending litigation, and serious concerns including the alleged dual employment of Matekane while on the payroll of the Directorate on Corruption and Economic Offences (DCEO).

This analysis dissects the catastrophic failure of professional judgment by the suspended officers, the looming legal trap they face, and the precarious position of former board members Malefetsane Tlelima and Bonang Phooko, who must now decide – save their own careers or sacrifice them on the altar of a lost cause.

A refusal to accept reality

The crux of the crisis is not merely insubordination; it is a fundamental misunderstanding of corporate law. The suspended executives appear to be operating under the “Phantom Board” syndrome – remaining loyal to an ousted previous leadership despite a new, legitimate board being seated and ratified.

Corporate best practice is unambiguous.

According to the King IV Report on Corporate Governance (internationally recognised as the gold standard) and Lesotho’s Companies Act, once a board is validly appointed, its authority is absolute until set aside by a competent court. The new board is not a suggestion; it is the law.

What did Mabote and Matekane do? According to the Board’s May 29, 2026, Show Cause notices, management publicly adopted a position refusing to implement board directives “pending the outcome of court proceedings under matter number CCA/0010/2026.”

Critically, there is no court order restraining the board. This is a fatal error.

Advising a company that management can ignore the board in the absence of a court order is legal malpractice. It is the equivalent of a police officer refusing to arrest a thief because the suspect has threatened to sue. Until a judge’s gavel falls, the board’s word reigns supreme.

By taking this stance, Matekane – the very Head of Legal – did not protect the company; he exposed it to governance collapse, operational paralysis and potential liability to shareholders for breach of fiduciary duty.

The legal trap: Why the Labour Court is a minefield

The suspended officers are likely considering challenging their suspensions in the Labour Court. If they do, they should beware. The Court of Appeal of Lesotho has already laid a trap for precisely this kind of litigious insubordination.

In the seminal judgment of ‘C of A (CIV) 12/2022 PALESA KHABELE v CHAIRPERSON OF THE DISCIPLINARY HEARING COMMITTEE & OTHERS’ (delivered November 11, 2022), the Court of Appeal delivered a thunderclap of legal realism. Khabele, a suspended director, attempted to interrupt her disciplinary proceedings by rushing to court with preliminary objections. The Court would have none of it.

The core principle from Khabele’s case: Courts will not intervene in ongoing disciplinary proceedings unless there are exceptional circumstances. Disciplinary action is the employer’s (here, the board’s) managerial prerogative. To allow employees to run to court at every objection would result in unnecessary delays and the frustration of justice.

Let us apply this to Mabote and Matekane. What are their prospects?

1. Procedural fairness was observed: The Board issued formal “Notices to Show Cause” on May 29, 2026, giving both officers until June 3, 2026, to respond. According to the suspension letters dated June 4, 2026, neither man submitted a response. Their defence is likely: “We didn’t recognise the board.” But the Court in Khabele’s judgement (para 17) noted that even if objections are dismissed in limine, the employee is not without remedy – they can raise issues later or appeal a final dismissal. Walking out or refusing to engage is not a defence; it is an act of contempt.
2. No exceptional circumstances exist: The Khabele judgement (para 20-21) made clear that a court will decline jurisdiction to interfere mid-process. The allegations against Mabote and Matekane (misuse of assets, dual employment, failure to attend meetings) are standard governance failures, not exceptional constitutional crises. The Labour Court will likely tell them what it told Khabele – Go back, participate in the investigation, and wait for the outcome.
3. The dual employment allegation is a landmine: For Matekane, the allegation that he served as company secretary while allegedly employed by the DCEO is catastrophic. The court will ask a simple question: “Which employer’s time were you stealing?” If the DCEO is a public body, which it is, this could implicate anti-corruption statutes. Running to court will only put this allegation under a judicial spotlight. Prudence dictates silence and negotiation, not litigation.

The Khabele case is a warning. She lost in the Labour Court, lost in the Labour Appeal Court, and was denied leave to appeal to the Court of Appeal. The court found “no prospects of success.” Mabote and Matekane are walking the same plank.

The outsiders’ dilemma

Perhaps the most revealing aspect of this saga is the shadow army being mobilised to fight the board. Reliable sources indicate that two individuals – Malefetsane Tlelimaand Bonang Phooko – who are not employees of Naledi Funeral Planners, have been active in attempting to neutralise the security personnel deployed by Chairman Madiba and interfering with lawful board directives.

The conflict of interest examined:

• Malefetsane Tlelima draws a salary from an entirely different company (a major local enterprise). Yet, he is allegedly spending his working hours at Naledi’s premises, confronting security guards, and trying to “protect” Matekane and Mabote.
• Bonang Phooko is employed by a prominent local insurance company. His primary fiduciary duty is to that insurer. Instead, he is reportedly running to Naledi to act as an enforcer for a suspended management clique.

Now for the hard question: Will they risk their own livelihoods for a lost cause?

Let us conduct a rational risk analysis. Tlelima’s employer pays him for productivity. If that employer discovers that its staff member is absent during core hours, loitering at a funeral planner’s office, and interfering in a private corporate dispute, what will happen? He will be fired for time theft and breach of contract. No company in Lesotho will tolerate an employee using company time to fight another company’s Board.

Phooko faces the same peril. The insurance industry is regulated and conservative. An employee who engages in unauthorised physical interventions at a third-party company is a liability.

The Prediction: When the legal letters start flying and the suspended officers lose in court (as Khabele suggests they will), these “outsiders” will vanish. The cold reality of corporate life is that most people will not torch their own careers to keep someone else’s seat warm. Tlelima will save his job. Phooko will return to his insurance desk. And Matekane will be left to fight alone.

What the board got right (and wrong)

From a corporate governance perspective, the Naledi Board has largely followed best practice, with one notable omission.

What the board did right:

• Procedural fairness: Issuing Show Cause notices before suspension.
• Preservation of rights: Suspending with full pay and benefits (explicitly stated in the suspension letters) to avoid prejudgment.
• Asset preservation: Immediately securing records, deploying independent security (Black Diamond Security), and notifying the Lesotho Mounted Police Service.
• Shareholder communication: Issuing a detailed communique to calm stakeholders.

What remains exposed:

• Speed of investigation: A 90-day suspension is long. If the investigation drags, the Board risks a constructive dismissal claim if it cannot conclude promptly.
• Reliance on outsourced security: By not having internal HR muscle, the board is vulnerable to the very interference from outsiders noted above. A private criminal summons against these individuals for trespassing may be necessary.

A reckoning in the High Court or the Labour Court?

The suspended officers face a classic “Hobson’s choice.”

If they go to the Labour Court, they will face the Khabele precedent. The court will likely decline to intervene, telling them to endure the investigation. That process will take months, during which they remain suspended, their reputations in tatters, and the board will have time to complete a forensic audit.

If they do nothing, the investigation will likely recommend a disciplinary hearing, leading to probable dismissal.

The law is clear. The managerial prerogative is the board’s weapon. Loyalty to an ousted board is not a defence; it is the very definition of misconduct.

As for Tlelima and Phooko? The smart money says they abandon the battlefield long before the first witness is called. One’s own salary is a powerful motivator for sudden amnesia.

The bottom line, in my view –  The Board of Naledi Funeral Planners holds all the legal cards. The suspended executives are not revolutionaries; they are employees who refused a direct order. And in the Court of Appeal of Lesotho, citing Palesa Khabele, that is a losing bet every time.