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Moyo was comfortable with Manuel’s potential conflict of interest – Old Mutual

Insurer turns the tables on its former CEO, saying he was also responsible for the company paying Trevor Manuel’s legal fees in his battle against the Guptas.
The blame game … Old Mutual’s response to Peter Moyo's allegations reminds one of a tenet in Navajo culture: 'When you point a finger there are three fingers pointing back at you.’ Picture: Moneyweb

The spat between Old Mutual and its former CEO Peter Moyo has intensified, with the insurer accusing him of personally approving governance procedures that would manage any potential conflict of interest of board chair Trevor Manuel during the separation of the South African business from its UK operations.

Moyo, who was suspended on May 23 and fired on June 18 over a conflict of interest involving dividends that were paid by his investment holding firm NMT Capital, accused Manuel of having a “triple conflict of interest”. This was because Manuel was chair of Old Mutual Group SA, Old Mutual plc and advisory firm Rothschild & Co during the insurer’s managed separation.

Read more here: It’s Moyo versus Manuel as Old Mutual drama escalates

This allegation was contained in Moyo’s urgent court application at the Johannesburg High Court in which he seeks to be temporarily reinstated as CEO and claims damages for being fired four years before the end of his contract with Old Mutual.

Moyo said he raised concerns in March 2018 about Manuel’s “triple conflict of interest” involving Old Mutual’s managed separation, which would see the insurer move its primary listing from the London Stock Exchange to the JSE. Manuel ignored Moyo’s objections and “from that point on, Mr Manuel’s attitude towards me deteriorated”.

Millions in fees

Moyo alleged that a proposal to transfer a R5 billion contingent liability from Old Mutual plc to what is known today as Old Mutual Limited – a key aspect of the managed separation – was at the heart of Manuel’s conflict of interest. Rothschild & Co was one of the advisors on the transaction and “stood to gain [and eventually did gain] hundreds of millions of rands in fees”.

Considering that Manuel was a director of Old Mutual SA, Old Mutual plc and Rothschild, Moyo believes that he should have recused himself from the managed separation transaction.

In its affidavit that responds to Moyo’s court bid, Old Mutual company secretary Elsabé Kirsten says the company finds his allegations “astonishing” because Moyo – while he was CEO – was “fully aware” that all questions and concerns regarding Manuel’s potential conflicts of interest were “carefully considered through proper governance structures”.

Kirsten said Moyo was involved in a meeting of the board’s related party transaction committee on March 23, 2018, in which the R5 billion contingent liability from Old Mutual plc to present-day Old Mutual Limited was approved.

“Not only was the applicant present at that meeting,” said Old Mutual, but Moyo supported and approved a resolution to implement the contingent liability.

Old Mutual said Manuel’s relationship with Rothschild began before he joined the insurer’s board. And Rothschild’s mandate to advise Old Mutual on the managed separation process “predated the board chair [Manuel] joining the Old Mutual board”.

“These relationships were known and disclosed,” it added.

Gupta legal fees

In another incident, Moyo questioned why Old Mutual was paying Manuel’s legal fees in his matter against the controversial Gupta family and their associates as it didn’t have “anything to do with Old Mutual”. This resulted in a further breakdown in the relationship between Moyo and Manuel.

Old Mutual called Moyo’s allegation a “hypothesis” that has “no factual basis”. The company claimed that it was Moyo himself who approved and supported the payment of Manuel’s legal costs.

“As a matter of fact, the applicant himself [Moyo] was involved in the decision in 2017 regarding legal costs of the board chair [Manuel], because this was in the interests of Old Mutual,” said Old Mutual’s Kirsten.

“I am advised that the decision to pay for the relevant legal costs and manage the legal strategy was initiated by Old Mutual and not the board chair [Manuel].”

To be specific, Moyo, according to Old Mutual, instructed the company’s chief legal officer Craig McLeod to proceed with Manuel’s legal battle – thus payments for legal fees were processed. Old Mutual said Moyo was also part of discussions on how Manuel’s legal expenses would be accounted for in the company’s financial statements.

The matter is to be heard in court on July 16.



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And I suppose the auditors happily accepted the payment of legal fees by Old Mutual , as the auditors did for Gupta’s wedding cost.

Dumb comment, the auditors are not the financial words police. If you want to pay for a directors legal fees then the auditors just make sure you actually did and that it’s recorded in the financials correctly. Nothing more nothing less.

Sorry, but I disagree
Having been a Chairman and Chaired Audit committee for a small(ish) Insurer, I had many many queries from KPMG about explaining certain transactions.
They earned millions from OM and the fees for recent restructuring was enormous – KPMG did not want to damage the goose laying the golden eggs.

Starting with Moyo, none of the points being discussed have much to do with the fact that he had a direct conflict himself and as CEO, that is far more problematic than the chairman’s conflicts.

Secondly, chairman’s do have various roles on boards which is understandable but I would question why OM did not ask Manuel to resign from Rothschild given the direct and very material link that was in play at the time.

Lastly, Manuel should refund the legal fees. That is just ridiculous.

OM should use the opportunity to really clean house:
Moyo had conflict of interest – fired
Manuel still has conflict of interest – fire him as well and the problem should be solved.

Auditors should have raised a concern – KPMG did nothing?
Perhaps that’s why senior audit partner moved to another firm – too conflicted – – large fee v criticism!!
As for OM finding this ‘astonishing’ – – I find the fact that they, as a board can agree to irregular payments and transactions and then expect all to keep quiet – ad infinitum!!
Manuel should have known better and not allow this – – – I bet anything there is no piece of paper or electronic record of Manuel objecting to this and OM board still proceeding!!
Can of Worms – – – from a concerned shareholder

KPMG I both instances – Gupta wedding and OM

is there a pattern here?

At least UK Regulator looking into KPMG

So, Old Mutual appointed Manuel to its board while he was a chairman of a company that was advising Old Mutual on a transaction.
And this what Old mutual uses as an attempt to “rebuff” Moyo. How intelligent are these people?

Old Mutual’s take on the legal fees issue is so pathetic to warrant a comment.

It is beyond disgraceful for Old Mutual’s shareholders to carry the cost of Manuel’s personal legal battles. Snouts of executives and the Board so far in the trough that their eyes are all clearly buried in the swill…

Yes, thankfully at the end of this year, DV, i will leave this crowd when it comes to pension & ra’s etc,the rest of my staff as well, this was just too much of a public washing of directly ex-political / political involved / bee involved / and directors with conflicting interests(was it actually conflicting interests or to personal advantage???)in different companies – is it not strange – anywhere where “an ex anc political high-ranking or connected person” becomes involved as an overnight expert in the new private sector field that he / she enters they make a massive b-lls-up of a once well functioned entity. After the cookie hits the fan, they resign as if they were the saviour or rescuer of the business, meanwhile they were the core of the problem at the cost of the actual shareholders of the company. i may be totally wrong, but it looks as if manuel is trying the zuma trick when it comes to legal costs – he must keep in mind he is not in the state / public sector anymore but in the private sector where one is working with shareholders/ private sector money, not taxpayers money.(or is he also trying to sit on several chairs at the same time??) By the way, according to internet sources manuel is trained in the civil and structural engineering / law field.

Why hire Moyo in the first place when his first stint at Mutual was seemingly unspectacular.Sounds like a nauseating character at best.Manuels role at Rothschild is problematic as well as Mutual paying his legal fees and i do think he needs to do the honourable thing and step down from his role .This does the beg the question…why does Mutual continue to fall over their feet recruiting the likes of Moyo,Manuel and a bunch of others who contribute nothing to the bottom line but want to be part of this gravy train

Does anyone still own OM stock or gives them any money to waste?

What choice do we have, moving a retirement product isn’t an overnight thing.

This article basically confirms that OM were paying Manuel’s personal legal fees and that is quite simply UNACCEPTABLE. I’m totally disgusted and shareholders should revolt and insist that Manuel repay these payments or step down or both.

End of comments.





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