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Old Mutual pleads for its board members not to be jailed

Says a more appropriate sanction if they are found guilty of contempt of court would ‘among other things’ be a suspended sentence, a fine or a warning.
The 13-member board’s failure to comply with a court order ‘amounts to self-help, anarchy, and unlawfulness’, says Old Mutual's former CEO. Image: Shutterstock

Old Mutual has made an impassioned plea to the high court, saying the potential imprisonment of board members – if they are found guilty of contempt of court for not allowing ousted CEO Peter Moyo to return to work – would be “excessive and inappropriate”.

Read: Peter Moyo hits a procedural snag but gets a small victory

Old Mutual was responding to Moyo’s application at the high court in Johannesburg to declare the insurance group’s 13-member board to be in contempt of court for blocking him from returning to his office three times.

Read: Old Mutual board throws jabs at Peter Moyo’s bid to censure its conduct

Moyo has been prevented from resuming his duties as CEO despite the court ordering twice that he should be temporarily reinstated as CEO since his firing on June 18 following a “breakdown of trust” between him and the board, chaired by Trevor Manuel.

In court papers dated Tuesday (October 8), Old Mutual’s head of legal Craig McLeod says the imprisonment of the insurance group’s non-executive directors (or board members) would be an “inappropriately harsh punishment and certainly not warranted”.

In August, Moyo asked the high court to censure the conduct of Old Mutual board members by declaring them to be in contempt of court because they “failed” to comply with a court order that reinstated him as CEO. A contempt of court offence relates to being disobedient or disrespectful towards a court of law regarding its judgments/orders.

If the high court finds members of Old Mutual’s board to be in contempt of court, they might face hefty fines or imprisonment. Moyo is pushing for the latter, saying board members need to argue in court why they should not be committed to imprisonment for six months or a period determined by the court.

McLeod argues that the insurance group’s directors have “at all relevant times” handled the axing of Moyo in a manner that they believe is “in good faith” and “in the best interest of Old Mutual”.

Board members ‘did not act in their personal capacity’

He adds that Old Mutual board members have not acted in their personal capacities but rather discharged their fiduciary duties as directors – thus their imprisonment, which is a personal sanction, would not be appropriate.

A more appropriate sanction, if board members are found guilty of contempt of court, would be, among other things, a suspended sentence, a fine or a warning.

“It is respectfully submitted that if the court finds that the respondents [Old Mutual board members] have acted in contempt of court, then, in the circumstances of this matter, remedies of this nature would be adequate,” McLeod says in the court papers.

Moyo wants imprisonment

But Moyo believes the “failure” by Old Mutual to reinstate him “amounts to self-help, anarchy, and unlawfulness”.

“The Old Mutual board was not permitted to ignore and fail to implement a court order simply because it does not agree therewith or because it is uncomfortable with such implication,” Moyo recently said in his contempt of court application.

He said Old Mutual’s conduct in opting to “willy-nilly ignore a court order” undermines the dignity of the court and contravenes section 167 (5) of the constitution, which provides that “an order or decision by a court binds all persons to whom it applies”.

Moyo is also vexed that Old Mutual fired him again – issuing him with a second notice on August 21 that terminated his employment contract with the insurance group. The first termination notice was given to him on June 17.

Moyo said his second firing is another count of contempt of court.

However, McLeod says Moyo’s employment contract was lawfully terminated by the second notice “in a manner permissible in law” as it was “logically and legally” distinct from the first termination notice.

The difference in the second notice, he says, was that the notice stated that his continued employment relationship with Old Mutual was “untenable” since Moyo sued the insurance group for unfair dismissal and won.

“The directors had reached the conclusion, in the course of the litigation that ensued following the giving of the first notice of termination, that irrespective of the outcome of that litigation, a continued employment relationship with Mr Moyo had become untenable and that, consequently, it was in the best interest of the company to give further notice to terminate his employment,” says McLeod in the court papers.

Moyo accepted his notice payment, cannot be reinstated

Old Mutual reiterated that Moyo is still not allowed to return to his office even though he “may be obliged to tender his services”.

This is because Moyo has been paid R4 million by Old Mutual for his six months’ notice, and in doing so, the insurance group believes it discharged its primary obligations to him after terminating his employment contract.

“He has accepted the payment and has not tendered to reimburse Old Mutual. He cannot approbate and reprobate at the same time.”

The contempt of court hearing is expected to be heard in November.

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If they ignore the court, jail them! What makes them above the law?

Could be a good practice run. The tribe has spoken send them to jail and give the CEO his job back. Then study how to fire someone properly. Then fire…

Jail time is more appropriate. I am worried about prison conditions for the likes of Trevor Manuel…. They won’t survive prison.

They will live like kings…. remember Oscor Pistorius.

We can’t have two systems of justice, one for the rich and famous and a-nother one for the poor and down trodden. If, the rich break the law willy-nilly, and get charged, tried and found guilty, and or as they say in Afrikaans, ‘maak hulle skuldig aan iets’ (like in this case, by ignoring and defying a court order, not once but twice), they must just face the music and be locked up. There is no reason, to consider ‘other alternative remedies’, that is precisely creating an unconstitutional stream of ‘justice’ for the rich, which the poor are not likely to benefit from.

Throw the book at them, in fact, the public demands it.

The same law should apply to the president and all his merry me. Remember the ANC defied a court order not to allow their pal, Omar al-Bashir to leave the country and I don’t see Zuma in prison or even charged with contempt of court. But in this most unequal of societies the law only applies to some not all.

I’m afraid that this is the case. The rich can afford fancy lawyers.

Beat the system and become rich 🙂

I hope the courts use this case to make a clear statement that nobody is above the law… especially in these tough times in our country

Except of course if you are a politician, especially an MP , or the President.

“Board members ‘did not act in their personal capacity’”

Then why did they not just abide by the court order? They let personal feelings/politics/relations/ego get in the way, that’s why.

Also jail half the Parliament.

Weird logic from the lawyer : at first we fired him improperly and then we fired him again because he sued and won, making the second firing proper.

Lol. Well said!!

Not really, but cute try.

Time to do ManuEl Labour !!

Oh I see what you did there.

Because only plebs should go to jail, right?

Not to worry.

They have an ex-finance minister on their board.

And we all know that ANC MPs and ex-MPs don’t go to jail.

Watch this space. They’ll get a slap on the wrist. The world favours the rich, justice is a myth and all will be forgotten as soon as another scandal is uncovered.

I am not sure if the issue has been addressed often enough – but I am very concerned about the implications of the judgement on this matter so far.
Peter Moyo was not simply an employee of OM. He was a Director of OM. It has always been accepted that Directors serve at the discretion of the Board of a Company (the Board being representatives of shareholders). It is perfectly logical that Shareholders are able to determine who is running their company (i.e. appointing Board members and ultimately Directors) at their sole discretion.
This entire concept is now being questioned by these judgments – does it mean that shareholders are no longer in control of their companies? Can Directors no longer be removed by shareholders at their discretion? Surely the impact of these judgements is just a further nail in the coffin for business in South Africa – where shareholders no longer trust that their interests are protected at all.

And the lawyers who advised them thus should ALSO go to jail.

Time to man up and take responsibility for your “professional” advice.

I think even just a nominal jail-time of just a few days in Sin City will send shock-waves through this arrogant, entitled, above-the-law class of people.

But the lesson will be in ACTUAL jail-time. None of this suspended nonsense.

The “lesson” is sorely needed!

Include the Head of legal and double time for clever Trevor

HAHA….Moyo wants blood and heads…Good for him, OM made its own mess. For once, an individual is financially strong and has the gongs to legally take on a Goliath…

Hmmm … one law for the privileged and another for the masses? Where have I read about this before? Oh yes! Pre-French/Russian revolution history.

Soon to be visited on South Africa.

In most of these comments it seems to be forgotten that Mr. Moyo allocated to himself some 31 M already in dividends. He received another 4 M for 6 months “work”. Where does that money come from” The policy holders. Moyo has certainly not the interest of the policy holders on his mind.

Clearly none of them have.

“All animals are equal, but some animals are more equal than others.”

Timeless wisdom!

For a relatively simple crime like contempt of court we expect people to land up in jail, yet the wholesale theft and corruption amounting to billions of taxpayer money stolen by government officers, officials, employees and all their related patronage networks absolutely nothing, but nothing happens or is feared to happen. I am perplexed at this country I live in. Sick! Totally sick!

So because one lot gets away with it, everyone should. Got it.dont you think that your logic is what caused this mess?

Think before commenting.

These court orders to reinstate an employee when there has clearly been an irretrievable breakdown in the essential relationship of trust and confidence are almost certain to be set aside by a higher court acting rationally. It’s fine to hold the dismissal as unfair and then order damages, but ridiculous to order reinstatement under the circumstances. With this in mind, it isn’t clear to me that the question of whether appealing the order(s) doesn’t automatically suspend its(their) operation pending finalisation of the appeal. I believe, under all normal circumstances, this is what happens under standard rules of court when an appeal is lodged. It’s not clear to me that anybody (whether a juristic person, or the directors themselves) is actually in contempt of court yet. Baying for imprisonment just seems premature, not to mention crazy and populist, when there is so much more yet to be clarified in this whole shambles of a civil dispute…it’s a civil / contractual matter, not the crime of the century as some of the comments on this article might suggest.

It stopped being a civil matter when the orders of the court were ignored. With contempt. Obviously.

Were the orders of the court “ignored”, though? I understood that, rather, they were under appeal, which means the were formally acknowledged and respectfully disputed with the leave of the court. To leap to the conclusion that they have been contemptuously ignored in a criminal manner is to pre-judge an application and an outcome. It’s stating the blindingly obvious to point out that contempt of court in a civil matter becomes a separate criminal matter, but contempt of court has not been proven.

So why are they pleading now?

Because they have to file their “pleading(s)” ahead of the hearing relating to the alleged contempt of court issue, which has been set down for some time in November. I’m not sure that characterising a routine / standard “pleading” document as an “impassioned plea” is objective journalism…perhaps a misunderstanding of the terms pleading / plea as used in the context of litigation…

If I were a director and wanted to sabotage the company then I would close the top performing funds and rig the vote so that it looks correct but only I can win.

End of comments.





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