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Old Mutual CEO in no mood to go quietly in boardroom dispute

Peter Moyo is demanding a ‘complete’ payout deal before he even considers accepting an exit offer.

Old Mutual has embarked on a transition unlike any in its 174-year history.

Suspended by the board for conflicts of interest involving his investment firm NMT Capital, chief executive officer Peter Moyo signaled he had no intention of going quietly.

The 56-year-old South African insists he’s done nothing wrong and his links with NMT are above board. He is demanding a “complete” payout deal before he even considers accepting an exit offer, he said by phone on Friday.

The drama broke just hours before the annual shareholder meeting, with the company announcing the suspension due to a “breakdown in trust and confidence.” Old Mutual chairman Trevor Manuel, a former South African finance minister, soft-pedaled the conflict when addressing investors. He said the CEO was indeed innocent of any wrongdoing and that the falling out had nothing to do with financial misconduct or company performance, an explanation that satisfied few.

“Old Mutual will suffer from the reputational damage,” Warwick Bam head of research at Avior Capital Markets, said by text message. However, from a corporate governance point of view, the decision was the right one, he added.

Payoff talks

Next up will be a negotiation over a payoff and Moyo’s salary during his suspension period. To complicate matters, a majority of shareholders voted against Old Mutual’s remuneration report, indicating they disapproved of its executives’ compensation.

“There are still discussions that are happening between Mr Moyo and the board and when those discussions have been concluded, we’ll be in a position to comment. I don’t know when those will be concluded,” Tabby Tsengiwe, a spokeswoman, said by phone.

At the heart of the conflict is NMT Capital, which was founded by Moyo and two others and has investments in the construction, energy and financial services industries among others. Old Mutual backed NMT with R291 million of capital before appointing Moyo as CEO, and confirms it was aware of the relationship when making the call to hire him.

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

What’s changed is the company’s view that Moyo’s ties to NMT could be effectively navigated through appropriate disclosure and conflict-of-interest policies. “There’s no surprise about it, but it’s important that this is managed,” Manuel said. “Sometimes these things become unmanageable and untenable and it’s reached that point.”

Chief operating officer Iain Williamson will serve as acting CEO. Old Mutual shares fell as much as 6% at the start of trade, paring that loss to 2.9% by the close in Johannesburg.

The 56-year-old Moyo has worked in the top tier of South Africa Plc for more than a decade and has led the insurer for a year following the breakup of the group and the sell down of a stake in Nedbank Group, where he serves as a director.

This isn’t the first time he’s figured in boardroom battles. In 2016, while chairman at Vodacom Group, Moyo tried to buy a large stake in the mobile phone company through NMT from Africa’s largest fund manager, Bloomberg previously reported. This deal was later scuppered.

He resigned as CEO of insurer Alexander Forbes Group Holdings in 2007 after a disagreement with the board, and has been a board member of Transnet, the state rail and ports company that’s at the centre of corruption claims.

Closing out the annual meeting, Manuel directed attendees to the coffee table. “I have pleaded with the company secretary for something a little bit stronger, but she says we must manage company resources,” he said.

© 2019 Bloomberg L.P

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OM knew about the ‘conflict’, yet they appointed him and showered Moyo with millions.

If Moyo kept to the agreed manner how to handle the conflict, he is in for a MASSIVE payout!!

A lot of dirty washing still to be revealed – I think.

With that candidate’s history OM should also suspend those that put him there in the first place

Karl, what are you referring to – Moyo has a pretty good track record? Unless you have specifics to point to, that was a yellow card comment IMO.

Strange how these guys never leave without a fight. If the board have lost trust in Moyo, he should leave, hanging his head in shame.

Why? You can’t fire somebody just because you fall out with them, or because you don’t like them. Or, rather, you can – but you will need to pay them handsomely to go smoothly without all sorts of drawn out legal wrangling. CEOs are entitled to due process and basic employment law protection just like anybody else. The failures are higher up here – there is no way the potential for this conflict of interest to become unmanageable should not have been foreseen and mitigated before he has appointed. He should not have been appointed until the conflict was resolved. So, the board are to blame here – asleep at the wheel.

Imagine the conflicts of interest all over Africa where they would not understand King and corporate governance regs.

Old Mutual seems to be a company with multiple strategy disorder.

Don’t know this guy but if he failed the company he should get 1 or 2 weeks pay for every completed year of work. Like everyone else.

just be VERY VERY full of gratitude with the little pay of R50 million PLUS ……… and then …… at least some TAX deductions of 45 % plus will go OFF!!! it help us as the BOURGEOIS in this country to get some sort of RELIEVE from SARS.

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