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Peter Moyo questions reasons for Old Mutual suspension

‘You can’t just destroy people’s careers like this.’

RYK VAN NIEKERK: Old Mutual suspended its chief executive, Peter Moyo, last week after an apparent breakdown in the trust relationship between the board and Moyo. This flowed from Moyo’s relationship with a company, NMT Capital, which was a recipient of a significant investment from Old Mutual. This relationship, however, was disclosed, and was not a secret.

Read: The investment firm that sunk Peter Moyo to suspension status

Peter Moyo is on the line. Peter, welcome to the show and thanks for talking to us. What is your version? What happened here, what led to this breakdown in trust?

PETER MOYO: Good evening, Ryk, and good evening to your listeners. Ryk, the starting point is that the relationship with Old Mutual and NMT goes back to 2005. At the time that I joined Old Mutual in 2017, the relationship was already in place. We entered into a separate agreement as part of my employment contract on how we managed the conflict of interest if it ever arose between Old Mutual and I.

In addition to this, Old Mutual has always had a director on the board of NMT, and there are people at Old Mutual that have managed this relationship since 2005. In all this time that questions that have been raised, the Old Mutual director voted exactly the same as me. None of the people that managed the relationship ever raised any questions of concern, so I do not understand where the conflict comes from.

RYK VAN NIEKERK: So how did this play out? Did you just get a phone call or an email out of the blue, stating you are suspended?

PETER MOYO: No, firstly, in the nature of their business, NMT would do certain things with Old Mutual and I was told that there is, rightly so, a related-party, the transactions committee, that was looking at the request from NMT Capital, which was normal. So I was asked some questions, which I answered.

And then one day I heard that there were question marks, and I did not know where they were coming from.

RYK VAN NIEKERK: The way Old Mutual came out, it seemed – I don’t want to use the world aggressive, but it was as if there was a big fight within the boardroom and that through the whole process to try and resolve a conflict that a breakdown in trust occurred. What you are saying is that you don’t know of any conflict or any breakdown in trust?

Peter, there seems to be extremely divergent perspectives from you and from the Old Mutual board. Why do you think the parties are so far apart, especially about something I would think is elementary – on exactly how the breakdown in trust happened?

PETER MOYO: Well, this is exactly what I do not really understand, because this is actually a very, very simple matter. There are people at Old Mutual who manage the relationship who will tell you that I have never, ever really spoken to them, or tried to influence anything they do Old Mutual. In fact, all the times that the transactions are being looked at, Old Mutual has always had a director on the NMT board, and that director never voted differently from me. So I really don’t understand it.

RYK VAN NIEKERK: What is the process now? Will you face a disciplinary hearing?

PETER MOYO: I really don’t know. To be frank with you, I don’t know.

RYK VAN NIEKERK: Well, how were you informed that you were suspended?

PETER MOYO: We had a meeting on Thursday. Let’s start with the morning. I was asked to join a board meeting that I’d been rightly excluded from because I’d suspected they were discussing this issue and I was asked to join the meeting and they said let’s actually talk as colleagues and I said is this a question and answer. They said yes, they asked questions and I answered those questions. Then I left. And much later in the afternoon Trevor [Manuel] and two other board members came to me and said, the board irrevocably believes there is a breakdown in trust, and they think we should separate. I said, well, it’s only fair that you give me reasons and then let us take it from there. We are going to come back today.

And then, one or two hours later, they came back to me with a letter of suspension.

RYK VAN NIEKERK: Did it include any reasons?

PETER MOYO: Eventually it just talked about the meeting that we had. Actually in a meeting I had reserved, they listed a few things.

RYK VAN NIEKERK: Can you elaborate on those things?

PETER MOYO: At this point in time, maybe not, because they are things I am going to challenge.

RYK VAN NIEKERK: What are you going to do now?

PETER MOYO: Well, I’m just going to wait on Old Mutual.

RYK VAN NIEKERK: You are not considering any legal steps?

PETER MOYO: Well, they now have to come back to me either with a charge sheet or whatever they think. Honestly, there are things that I don’t understand. You could say to people “trust is broken”, but you actually have to go to them with proper reasons, and they have to be sought through carefully. Having said that, you also may be able to ask yourself the question: what if two directors make a wrong conclusion, what then happens, because you can’t just destroy people’s careers like this and there is no consequence to that – isn’t it so?

RYK VAN NIEKERK:  Peter, thank you for talking to us. We will continue to follow this story. We did approach Old Mutual to participate in this show, but they declined the opportunity.

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Great interview Ryk. All certainly does not look well at Old Mutual. The fact that the AGM rejected the remuneration policy (and actual remuneration) was a rather unusual outcome. This reflects poorly on the directors as a collective who are supposed to work in the best interests of the shareholders. Shareholders rejecting resolutions of directors outright is an indictment on the directors.

At executive leadership level, Khuseni Dlamini only served two years as CEO, Ralph Mupita 5. Peter Moyo has been in the job for 2 years. Old Mutual has just lost its third CEO in 10 years.

Everything points to a potentially serious leadership crisis, at both executive and non-executive level.

Very strange how Old Mutual communicated the suspension. Why impugn their CEOs character? Board and finance team have much more to explain than Peter if you look at the broken earnings promises, the way Zimbabwe was accounted for (Zim was >20% of the 2017 earnings that Old Mutual unbundled with instead of 2% because currency devaluation was ignored), managed separation remuneration structures, the new remuneration structures and targets, the people they hired and lost in recent years etc

“Breakdown in trust” a.k.a “We believe you are lying to us”….

It is very unlikely for a company to fire a CEO that is doing a good job for the shareholders…

Ordinary employees would never be allowed the conflicted situation that Moyo brought into this relationship and which OM accepted. Ordinary employees are expected to be 100% committed to the company but CEOs no, let’s drop the standards for them.

Many years ago I had dealings with a marketing lady at Old Mutual and she and her (self-employed) husband enjoyed a totally corrupt relationship with OM. Related party transactions everywhere and all seemed pretty much in the open. So corruption is nothing new to OM

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