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Gloves off in board brawl as Manuel confronts Moyo

Neither is backing down.
Trevor Manuel, Old Mutual chairman.The feud has been marked by accusations and counter-allegations of conflicts of interest by both parties. Picture: Bloomberg

The nastiest boardroom bust-up in recent South African-corporate history has left the chairman and chief executive officer of the nation’s oldest insurer with bloodied noses. Neither one is backing down.

Nor would they, it’s not in their character. But their fight is now hurting the reputation of Old Mutual, a financial-services company started in 1845 that has businesses spanning money management to consumer lending, and operations in 12 other African countries.

As an anti-apartheid activist, Trevor Manuel, 63, was jailed several times, and was eventually appointed finance minister, where he oversaw the country’s longest stretch of economic growth. Zimbabwean-born Peter Moyo has worked in the top tier of South Africa Inc for more than a decade, and has sparred separately with the nation’s top mobile-phone network operator and biggest retirement-fund administrator.

“I cannot see a scenario where the two gentlemen who are on opposite ends of the ring, so to speak, survive this saga,” said Morris Mthombeni, faculty director at the University of Pretoria’s Gordon Institute of Business Science. “It’s not helpful. People are paralysed because of the leadership vacuum created when a board and its CEO are in a public spat.”

Moyo, 56, emerged victorious in their first round in court and arrived for work on Wednesday morning after a ruling temporarily reinstated him. Old Mutual immediately fired back by seeking leave to appeal the judgment, sending Moyo back home that same afternoon. The drama continued when a bomb scare at the company’s headquarters had staff standing on the pavement, according to CNBC Africa.

A second case brought by the on-and-off CEO to declare Old Mutual’s board as delinquent directors, still has to be heard.

The battle spilled into the public arena at the end of May when Old Mutual announced it had suspended Moyo, citing a “material breakdown in trust and confidence.” It later clarified that the dispute involved a conflict of interest related to an investment firm Moyo founded before joining Old Mutual. Moyo was dismissed three weeks later.

Read: Peter Moyo’s return to Old Mutual starts with lawyers meeting 

The feud has been marked by accusations and counter-allegations of conflicts of interest by both parties. The stock is down 11% since Moyo was first suspended, the biggest drop in the five-member FTSE/JSE Africa Life Assurance Index, and is at its lowest level since the company moved its main listing back to Johannesburg from London last June.

‘Taking a hammering’

“We’re saddened that our reputation is taking a hammering,” Old Mutual spokeswoman Tabby Tsengiwe said by phone. “But we have maintained all along that this isn’t our choice. We’re trying to speak to the issues at hand, which is that there has been an irreparable breakdown in trust and confidence.”

Old Mutual is a “good company and that’s why I am desirous of going back,” Moyo said. Manuel directed questions back to Old Mutual.

“I imagine people are taking sides within the organization and that is informing their behavior as things unfold,” said Mthombeni at GIBS Business School.

There are many examples of leadership fall outs which result in an irretrievable breakdown in relationships and “one of the parties bowing out in one way or another,” he said. “In this case it’s on steroids in that both have gone to court and ventilated issues in court. That just makes life untenable for everyone.”

© 2019 Bloomberg L.P.

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Just exactly where does “Manuel confronts Moyo”?

Manuel knows how to fight dirty – you get others to do it for you!!

From my limited knowledge of the matter, Manuel should go.
Moyo Should be reinstated and then Discipline Inquiry held to see if he needs to be reprimanded or terminated.
This is the least expensive option for OM Shareholders – – – – I hope the Board forgets about the personal war between Manuel and Moyo and remember us – the people they work for!!

Manual should go? Your limited knowledge is really your limited intellect

Manual has done pedigree service for South Africa as finance minister

Perhaps enlighten what Moyo offerings to service to the country were?

One of them smelt “poo” first

Leah Buchanan,

Your Manual must go, common sense.

@ Leah Buchanan.
I agree Manuel was a good custodian of SA’s finances while the world was throwing praise & money at the rainbow nation. However he’s now a conflicted chairman of 2 companies servicing each other not the finance minister.
Moyo I have no idea what services he has rendered SA.
Play the ball not the man.

@ Leah Buchanan – “Manual has done pedigree service for South Africa as finance minister”. That’s your opinion. In my opinion all he did was leave things alone. He took what was working already and let it work the way it was before. Don’t be fooled into thinking that the growth was taking place because he was minister. LOL. The pedigree service was to leave everything alone. Your comment about Illphil’s intellect isn’t witty or funny, it’s rude. Grow some manners, please.

Manuel must be the most successful person to have ever attended Peninsula Technikon in CT!!!

@ llphil

If I had to choose on reputation then it’s hard to see how Moyo is irreplaceable.

I also think the case went Moyo’s way because OM did not follow the right process in dismissing him, he rightly won because of that but the cause of dismissal was that he was investing OM funds into his own fund. Perhaps Manuel should face a similar process but if he declared the interest and removed himself from the decision making process then I don’t see an issue. Same would apply to Moyo of course but that is a more direct conflict.

Boards across the country have conflicts as board members are often on numerous boards. That is why you have conflict disclosure and a process to manage that.

Lastly and to the biggest point, SA labour laws really need to be looked at, we cannot continue to be completely inflexible when it comes to firing staff. If there is a good reason and fair process then it shouldn’t result in one sided CCMA/court battles.

Doesn’t Manuel have connections with gangsters? His connection with politics taints him. It doesn’t put him on a pedestal. In my mind it has been Manuel who has brought Old Mutual into disrepute. Being in the board and acting against the interests of the company like this is unforgivable. 1 vote against Manuel!

A microcosm of SA / ANC politics; ANC cadres doing what ANC cadres do best. As I see it, pigs fighting for access to the trough; stuff the shareholders (taxpayers and citizens in SA’s case)

Let them keep on fighting and causing the share price to drop, while it keeps dropping i shall be buying it(share) at a bargain because such issues 10 to 20 years from now will be forgotten.

The minute it went down I am bought. Easy win.

@zinger & Co. You want to buy a company’s shares that can’t even get its board and chairman nominations correct. Goodluck. OM aren’t exactly in an innovative space. Their slip-up will cause many to take a step back and remove themselves from the company.

aye triple it does not look good for OM but I reckon both these clowns were just figureheads with the right political connections. I doubt they did much for or at OM except cost the company cash. I wouldn’t trust feeding a cat regularly to either of them.

Manuel only looked good because of the commodity boom and rainbow nation honeymoon. He helped blow that cash on the Arms Deal and its corrupt children.

How much governemt bonds are on Old Mutuals balance sheet? What will be the impact if bond yields increase by 2,3,4,5%?

Remember they need to mark-to-market their bond holdings (albeit mostly outside of the P&L), you could have massive writedowns if SA gets junked and if debt/GDP keeps ballooning. Will they have sufficient capital to take those hits.

How much of their products are guaranteed products? What will the impact of higher yields be there?

I dont know the answers, but it might be worthwhile to look at those things rather than corporate handbags between two figureheads that has preciously little to do with actual day to day ops. Dont think either of these gents will be able to price even the simplest life policy so what they are doing there is one great mystery

OMSA should allow Moyo to return to work sit in his office from dawn to dusk but with the caveat that he may neither engage or instruct staff to perform any functions and he must be kept out of all decision making. There is a clear distinction between returning to work and performing work functions.
Feel sorrier for OMSA staff than the senior management and their laundering of their washing in the public domain

Dont believe that will be massive change from what he was doing beforehand

When people, like Moyo, think that they are bigger than the employer, then that indicates the lack of leadership. The issue of conflict of interest besides.

Our parents used to say “Don’t wash your dirty linen in public”.

Our country will be far better off if people do the right thing and retain their dignity.

Every conflict does not need to end up in the media and the courts. This way we get to focus on building a future instead of surviving in a cesspool.

When companies, like Old Mutual, think that they are bigger than employment laws and fairness, then that indicates the lack of leadership. The issue of conflict of interest besides.

The economic wrecking ball called B-BBEE is merely doing the only thing it knows – destroying value. What is the value lost in rands to shareholders ?

Now you are talking! ” Every tree shall be known by his own fruit”

BEE is a perversion of the law, an infringement on property rights, theft, or legalised plunder. Only the most naive spectators can expect the beneficiary of legalised plunder to act in a civilised manner. Criminals never respect the rights of others. BEE legislation forced people of questionable ethics and capability into the boardrooms. Now, we reached the logical consequence when the different competing plunderimg factions begin to fall out. The boardroom brawl will resemble the local shebeen. That is the tree, so that is the fruit.

Moyo was appointed because they believed he was competent to do the job. Experienced and qualified. Where in his appointment did OM refer to BEE? And if OM supports BEE what’s the problem there?

I recently switched my salary from existing bank account to Old Mutual Money Account.. and now there’s fight within the company.. should I return back to my account.. would this affect me as a new old mutual banker?

A foreigner allowed to compromise a 174 yo SA company. Also what happens to Old Mutual going forward is less of a priority than their egos. Why would the Judge reinstate him?

Peter and Trevor need to sort their issues far away from Old Mutual. Perhaps its time for the two,… to vacate their post coupled with all members of NomCom.

I agree, both should leave, surely they are replaceable. Old Mutual should start to think about the most important people, the customers and investors.
I know the court for now sided with Moyo but the relationship between him and Manual is toxic.

Were OM a family business or majority family owned, the they can argue all they like. I wonder why the institutional shareholders are silent. After all its their customers value that is being eroded.

All this talent. Not fighting to quid ESKOM or SAA, name a few, but O.Mutual. One of the few, looks like, having survived the financial rape others have experimented. All legal, with following the line of, I did it my Gupta way.

I can’t help wonder if more of corporate South Africa is about to go through the OM hell. There seems to be a growing breakdown of ethics and standard maybe from tainted leadership then.

End of comments.





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