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Moyo wants the entire Old Mutual board to be purged

Axed CEO wants a new interim board to be appointed.

Old Mutual’s board will be on shaky ground if axed CEO Peter Moyo’s high court bid to get his job back is successful. Moyo is not going down without a fight and wants a new interim board to be appointed should he be reinstated.

Moyo was suspended from the life insurer on May 23 on the grounds of “a material breakdown in the relationship of trust and confidence”. He was later dismissed on June 18, four-and-a-half years before the end of his employment contract.

Moyo has launched an urgent application at the high court in Johannesburg to declare his sacking as unlawful, which would pave the way for him to be temporarily reinstated as CEO. He also wants Old Mutual chair Trevor Manuel and about 12 non-executive directors to be declared delinquent under Section 162 of the Companies Act.

There are two parts to his court application; part A deals with his “unlawful” firing and part B details his request for the court to declare Old Mutual directors delinquent. The full merits of part B have not been heard yet.

Hearings in the case started on Thursday, with Moyo’s legal counsel adding a new twist to the saga. Acting for Moyo, Dali Mpofu SC told the court that if Old Mutual directors on the board are declared delinquent, then a new interim board would have to be appointed.

Reasons for axing ‘manufactured’

Mpofu accused Old Mutual of flip-flopping on the reasons it gave for firing Moyo and said the breakdown in the relationship between both parties was “not real” but “manufactured” by the insurer. And, because of this, Old Mutual directors neglected their fiduciary duties.

When Old Mutual initially suspended Moyo, it cited a breakdown of trust and confidence between both parties. Manuel said there was no financial misconduct on Moyo’s part. The insurer later said there was a conflict of interest due to Moyo’s involvement with investment holding firm NMT Capital, which he co-founded in 2002. Old Mutual owns a 20% stake in NMT.

When Old Mutual eventually fired Moyo, it said he wrongly pocketed dividends worth about R30 million, while preference share dividends to Old Mutual were in arrears, which the insurer said was in breach of its rights as a shareholder.

Leadership vacuum could result

If judge Brian Mashile rules in Moyo’s favour, the move could thrust the insurer into a leadership crisis. It would have no permanent board or group CEO. After Moyo was sacked, Old Mutual appointed chief operating officer Iain Williamson as acting group CEO.

Mpofu said that even if Moyo is reinstated as Old Mutual CEO, he will still forge ahead with his application to censure the board through delinquency status.

Old Mutual and Moyo were close to settling when Mashile proposed that both parties should negotiate the reinstatement of Moyo as CEO for six months with full pay, after which he would leave the insurer. There was a caveat to this proposal: Moyo would have to drop part B (the court order to declare Old Mutual directors as delinquent) of his court application.

Give-and-take rejected

It was a proposal that was intended to restore Moyo’s dignity as he said his battle with Old Mutual had been “instantly damaging” to his reputation and “good name in the business world”. On Old Mutual’s part, it would admit to handling Moyo’s dismissal poorly.

However, neither party agreed to the proposals. The reasons were not disclosed to the court.

Hamilton Maenetje SC, acting for Old Mutual, asked the court to not grant Moyo’s application to be reinstated as Old Mutual CEO, pending part B of his application. He said court cases usually take a long time and that part B could take more than 60 days to be heard and concluded.

Regarding OId Mutual flip-flopping on its reasons for firing Moyo, Maenetje said the board lost confidence in the way in which the conflict of interest was managed and, as his employer, was not entitled to give reasons for terminating his contract on notice.

“When he [Moyo] said he has lost respect for the board and they are bullying him, we [Old Mutual] are then entitled to terminate his contract on loss of trust and confidence. It’s clear that there is no mutual respect left between both parties,” he said.

Maenetje will continue his arguments on Friday.

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There’s nothing like a good fight to see what all the fat cats get up to with other people’s money. I would not like to see Moyo back as CEO in this environment, but it will be good to get a glimse at how this board really functions!

Good point.
Reinstatement will not happen in practice, it will simply force OM to pay out large settlement to Moyo
And guess who will eventually pay????? Shareholders!!
No sanction against Manuel and his merry men who used shareholder funds irregularly (whether Moyo went along is not important to me – they used money indiscriminately to cover their own interest – not the company/shareholder interest.)
New board is probably not a bad idea.
BUT – if board members must be declared delinquent, then Moyo must also suffer same fate – he was, after all the CE and did not resign (as he is supposed to) when he sees irregularities and can not remedy the situation.
Who needs Netflix when you have this

Netflix actors are better looking ….

The board probably should hang their heads in shame for bringing on this fiasco. One thing for sure though, is that this little opportunist carpetbagger, Moyo, should be sent packing,never to return.

this is what money,greed and the yearning for power does to people.

And what does this say about Manuel? I would like to hear the full story. I have no skin in the game other than a very small annuity.

It’s the old part A and part B ploy: oldest trick in the book- trying to scare old mutual into a settlement by scaremongering with the part B relief – old mutual should not be bullied by the Part B. It’s just a ruse and a tactic to squeeze a settlement by avoiding more litigation. It’s all a trick. Fight on. Destroy the scourge! Must make an example of these rogues!

Good – OM now reaping harvest of a BEE appointment.

It’s the shareholders and policy holders left sucking the hind teat.

That Moyo wants to drag this into the public domain and forget about the shareholders points to why Old Mutual and its subsidiaries have been known in the market place to be so dysfunctional.

Where is the leadership??

The board members responsible for appointing this turkey should resign in shame.

It tells you everything about Moyo that he is prepared to stoop so low and use the EFFs Mpofu to represent him.The EFF leadership represents the greatest threat to the democracy of the country and its a matter of time before those thugs start demanding that people cancel their OM policies .And whats with wanting most of the board members out?You and NMT are going to take a hiding …a golden rule is to never take on Goliath unless all your ducks are in a row

and just to add,is that the EFF and Mpofu are on a bit of a hot losing streak at present,so you may want to rethink your position,Peter?

I disagree – IMO, Part A is a win (based also on Judge yesterday wanting parties to compromise). Part B is not that clear – if granted, Moyo should suffer same fate.

Fat cats or not, Moyo could not have been much of a leader when he displays behaviour like this. More concerning to me is how the likes of Manuel and Moyo can be accused of conflict of interest, yet FSP’s are so stritcly governed regards COI. Double statndards, yet again.

How come shareholders don’t have a say in this. Old Mutual is a public company, let the shareholders decide on what to do with Peter Moyo.

Dali Mpofu, Winnie “Necklace” Nandela’s adulterous lover, now EFF royalty, representing this (beautifully said above) carpetbagger! OM, if you want to appoint such people, the consequences are inevitable

Seems to me like SA has a serious shortage of capable, honest Top management, able to perform when the chips are down and market conditions tough!? This appears to be across the board judging by this sites daily reporting(Steinhoff, Tongaat Hulett, EOH, Hulamin,Group Five, Old Mutual, etc, etc, etc) and is becoming a huge concern for us shareholders whilst custodian’s of our investments are just treading water or even floundering with our capital. Salary packages are not structured to our benefit in the least, and certainly not how I would structure the package of someone managing my own business! Time to pull out methinks as we have too little say in the matter, once again other structures out of our control!

What a wonderful time to be a lawyer in South Africa! Unending work! Hopefully eventually the bills will be settled if there is any money left.

Based on this issue I think they – Moyo and the OM board – are all delinquent and actually deserve each other.

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