Old Mutual has decided to stop additional legal action against axed CEO Peter Moyo, in an attempt to “de-escalate” ligation that has dragged on for nearly three months and resulted in a nasty punch-up between both parties.
However, Old Mutual board Chair Trevor Manuel said on Friday that Moyo is no longer an employee of SA’s second-largest insurer, despite it issuing him with a letter on September 12 saying that “he has tendered his services and that he continues to do so.”
The insurer believes that Moyo, who said he’s jobless and sitting at home, is not required to be present at Old Mutual’s headquarters in Sandton to tender his services.
“He can come and have coffee on the ground floor. If he has a meeting with any of the staff, he can use one of the boardrooms. But unless you are employed in the building, you don’t have access to the building,” said Manuel.
He was speaking publicly for the first time since Moyo was fired on June 18 over wrongfully pocketing dividends worth R30 million linked to NMT Capital, an investment holding company he co-founded, in which Old Mutual holds a 20% stake.
Old Mutual was on a charm offensive, saying that it never intended to protract the dispute with Moyo and it has an interest in appealing against a July 30 high court order that temporarily reinstated him as CEO and blocked the insurer from appointing Moyo’s successor.
“One thing we are clear about is that we have to see the legal process through to its conclusion. We don’t want to be in the courts forever and a day,” said Manuel.
“The board is of the view that the [high court] order is so bad for the company and company law that we have an interest in ensuring that it is overturned on appeal. The judgment creates a massive headache for the corporate governance space.”
The feud escalated on September 9 after Moyo was barred by Old Mutual from returning to his office – despite the high court in Johannesburg ruling for the second time that he must be reinstated.
Moyo clinched another court victory against Old Mutual when high court Judge Brian Mashile dismissed the insurer’s application “in its entirety” for a declaratory order on September 6 that would prevent him from resuming his duties.
Old Mutual believes that Moyo should not resume his CEO duties until its appeal process against a July 30 high court order, which temporarily reinstated him, is concluded. Mashile granted Old Mutual leave to appeal the July 30 order, meaning that the insurer has a shot at overturning it, because a new judge or a full bench of judges might review the dispute.
After Old Mutual lost its declaratory order application, it said Moyo cannot return to work because he has not challenged the “contractual validity” of the further termination of his employment contract on August 21 –effectively firing him again.
Accordingly, Old Mutual said it will be “filing the appropriate appeal papers in the next few days” apparently against Mashile’s decision to dismiss the insurer’s declaratory order application.
In a new twist, Bowman Gilfillan, a law firm representing Old Mutual, sent a letter to Moyo on September 12 informing him that the insurer has “reconsidered its stance” on further legal action.
“It [Old Mutual] has now decided that it would be more appropriate to attempt to de-escalate the litigation between the parties, and it would prefer not to have to engage in further collateral litigation,” the letter seen by Moneyweb reads.
Old Mutual suggested that both parties should “seek to avoid further proceedings that would not serve to resolve the central issues that exist between them” relating to whether Moyo’s employment has been “validly terminated, either by the first or the second notice.”
Old Mutual has resolved to suspend further litigation, as it prefers to wait for a high court judgment that Mashile is expected to deliver in the next two weeks. Moyo has launched a high court application to have Old Mutual’s 14-member board, including Manuel, declared in contempt of court for “failing” to comply with a July 30 high court order that reinstated him as CEO and barred the insurer from appointing his successor.
In a statement on Friday, Eric Mabuza, Moyo’s lawyer, said he will consult with Moyo about his next legal steps. “[The] withdrawal by Old Mutual of its undertaking and threats to bring an urgent application means that Mr Moyo is free to return to work at any time.”