Kelly Group came under fire at its year-end results presentation on Tuesday for not disclosing how much former director and deputy CEO Mthunzi Mdwaba was paid in a settlement.

The group reported its results for the year to 30 September 2010 showing a knock in profits, including R12,5m in legal expenses.

Kelly Group has been caught up in a legal wrangle with Mdwaba since August. The two parties finally settled during an arbitration process a few weeks ago, which resulted in Mdwaba leaving the group.

Part of the settlement agreement was that both Kelly and Mdwaba would keep the payout confidential.

During the presentation on Tuesday, Kelly Group CEO Grenville Wilson again declined to say how much Mdwaba had been paid, despite being questioned by an investor on the matter. Other shareholders expressed concern that the Mdwaba may have been paid most of the R12,5m in reported legal expenses.

“Unfortunately, we agreed to keep the settlement confidential, and that is the way it is,” said Wilson.

However, in a bid to deflect investor concerns, Wilson said part of the money was fees paid to retain legal council and manage the arbitration process. He would not say whether any of the “legal expenses” went towards the actual settlement to Mdwaba.

Mdwaba joined the Kelly Group in 2008 when it bought out his IT training business, Torque IT. He was tipped as Wilson’s successor until he was mysteriously suspended in August and stripped of his directorship on the group’s board.

Very little is known about why the board decided suddenly to suspend Mdwaba. The group said it was because Mdwaba did not disclose a debt that he had personally accrued in an earlier failed business venture.

Mdwaba has subsequently paid the debt.

As part of the settlement, Mdwaba would also leave his position as the CEO of Torque IT, which was one of the better performing subsidiaries in Kelly Group during the 2010 financial year. It increased revenue by 6% over the same period last year.

Wilson said he had not yet found a replacement CEO for Torque IT. However, Kelly Group as a whole was in the process of restructuring, which Wilson said would be finalised over the next few weeks. — Candice Jones, TechCentral