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Manuel happy to move on from Moyo drama

As court rules in Old Mutual’s favour.

After the Johannesburg High Court ruled on Tuesday that Old Mutual does not have to give axed CEO Peter Moyo his job back, its chair Trevor Manuel acknowledged that the past seven months had been “very difficult”.

“The judgment is very important for us and we can finally move forward,” he said.

The long-drawn-out war between Moyo and Old Mutual started last year, with Moyo being suspended in May and subsequently fired in June. Old Mutual accused him of wrongfully pocketing dividends worth R30 million linked to NMT Capital, an investment holding company co-founded and partly owned by Moyo in which Old Mutual holds a 20% stake.

The firm cited a breakdown of trust and conflict of interest related to a payout of dividends by NMT Capital.

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

Old Mutual claimed in its court papers that ordinary dividends were declared and paid to Moyo without sufficiently providing for and servicing Old Mutual’s preference shares as required, something Moyo disputes.

On July 30, the Johannesburg High Court ruled that Moyo should be temporarily reinstated as CEO, blocking Old Mutual from appointing his successor, but Old Mutual fired him for a second time in August. The court then dismissed the insurer’s application for a declaratory order seeking to prevent Moyo from getting his job back.

Read:

It’s Moyo versus Manuel as Old Mutual drama escalates
Old Mutual fires Peter Moyo (again)
Old Mutual: ‘Moyo won’t be returning to work in the interim’

The court has now upheld the insurer’s appeal against Moyo, with costs.

“The judgment is very detailed and very thorough and it places us in a new position because it reaffirms corporate governance,” Manuel told Moneyweb on the sidelines of Business Unity SA’s Economic Indaba on Tuesday.
 
“One of the issues was what are the rights of the board? And the judgment that was handed down in July raised serious questions about that,” he said.

Read: Is Manuel truly independent?

The search for a permanent CEO

Old Mutual spokesperson Tabby Tsengiwe says the court’s ruling affirms that Old Mutual was right in terminating Moyo’s contract the first time.

“It also speaks about the upholding of corporate South Africa in general, concerning executive leadership in broad stewardship – in this instance the CEO,” she says.

Tsengiwe adds that Old Mutual can now start with the recruitment process for a permanent CEO to replace Iain Williamson, who has been the interim chief executive since June 2019.

Moyo is not backing down

Moyo, on the other hand, is not backing down. He says he will be appealing the judgment. As for when he plans to start the appeals process, he says: “I really do not know.”

He would have to lodge an application with the Supreme Court of Appeal (SCA) in Bloemfontein.

According to the SCA website, the court generally sits in panels of three or five judges, depending on the nature of the appeal. The president of the SCA is entitled, given the importance of a matter, to direct that it be heard before a panel of more than five judges.

Mitigating bad PR

The market reacted positively to the high court ruling, with Old Mutual’s shares closing 3.25% higher at R19.69 on Tuesday.

Old Mutual share price over three months

“The positive indication in the market therefore indicates that the market does welcome the ruling and we hope it will continue,” Tsengiwe says.

Wayne McCurrie of FNB Wealth and Investments says the fact that Old Mutual’s share price increased indicates how it is bigger than an individual.

“The future of the company was never going to be decided by whoever is CEO,” he says.

McCurrie adds that the firm’s victory mitigates some of the bad PR Old Mutual received during the back-and-forth court battle.

Read: Old Mutual feud with fired CEO risks thwarting growth ambitions

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Should never have been appointed in the first place. At the first potential chance for a conflict of interest he got conflicted.

Happy to move on because there’s no chance for an appeal. Ok, I get it.

Methinks this isn’t the end of the saga. OM was, apparently, in contempt of court.

I disagree. The ongoing dispute is costing shareholders money. What a waste! The judge ordering Moyo to be reinstated clearly erred as now confirmed. He delivering a judgement that appeared rediculous to me. To prolong the agony serves no purpose.

doesn’t matter how one look at the om mess – one thing is sure – wherever an outsider, especially politicians, with zero on-the- ground experience of an organization’s core business to show, problems / big problems will arise.

There is always a revolving door between politicians and corporate execs. They both need each other to milk the general public.

I would be very surprised if Mr Moyo’s appeal to the SCA (if it happens) is successful. Having read the judgement (especially paragraphs 63 and further) a court of appeal would find it very difficult to rule that the court misdirected itself or erred on a point of fact or law. A court of appeal does not have the liberty to impose it’s own views on the matter. It can only intervene on one of the grounds mentoioned above.

I fully agree – the probability that the Supreme Court would overturn this appeal is vanishingly low.

Maybe Mr Manuel should consider moving on. Notwithstanding the judgement it is clear that he did not cover himself in glory in (mis) managing Mr Moyos departure.

Would he really be a loss to shareholders? This is after all the man who strutted around Davos dispensing advice to all and sundry while conflating his ability with a commodity boom.

trevor Manuel’s name is restored in honour. he did right by O.M.

Not really – this case brought to light the fact that he caused or allowed Old Mutual to pay his personal legal fees in a matter that had nothing whatsoever to do with his position at Old Mutual. The self-serving argument that Old Mutual needed to pay the fees to defend the Old Mutual brand is beyond feeble. Trevor Manuel and Old Mutual come out of this whole affair looking very muddled and compromised.

Moyo is only there to line his own pockets, waiting for the payoff.

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