South African insurer Old Mutual sacked its former chief executive for a second time on Thursday and said it would continue to fight his attempts to get reinstated, despite a court ruling overturning his original dismissal.
Old Mutual fired Peter Moyo in June in relation to a conflict of interest, but the High Court ruled last month he should be temporarily reinstated – a decision the insurer is seeking to appeal.
In an open letter to shareholders who are growing frustrated with an increasingly messy public battle that has knocked the 173-year-old insurer’s reputation, the company’s board said it would explore all reasonable alternative options but could not have Moyo back at the helm.
Read Old Mutual’s open letter to shareholders here.
“A continued employment relationship between Mr Moyo and Old Mutual is untenable,” the letter, published on Thursday, said. “For this reason, Old Mutual has now given Mr Moyo a further notice terminating his employment.”
The company’s shares, which have lost over 15% since Moyo was first suspended in May, were up 0.3% at R18.36 by 1346 GMT.
Moyo’s lawyer, Eric Mabuza, described the open letter as “corporate madness”, and said Old Mutual directors – who Moyo has applied to have declared delinquent – were protecting themselves rather than the company.
“Somebody needs to intervene to save Old Mutual from itself and its directors,” he said, adding the purpose of the second employment termination notice while the legal case was ongoing was unclear.
Jacques Plaut, a portfolio manager at Allan Gray, Old Mutual’s second largest shareholder, said the company had initially done the right thing to remove Moyo.
While he said some shareholders wanted a financial settlement to end the saga, he would rather see the court process continue, as long as it does not affect the company’s operations. “I’d prefer this to play out,” he said.
Lawyer Mabuza said that since his appointment Old Mutual had not approached him or Moyo to discuss a financial settlement, though his client was open to listening to any such offer.
The fight started with a disagreement over the management of a conflict of interest related to NMT Capital, an investment firm Moyo founded and in which an Old Mutual subsidiary is the only institutional investor.
Since then, relations between the two parties have soured with accusations flying in both directions. In court, Moyo argued his dismissal was the result of attempts to raise concerns about separate governance problems at the company.
These related to an alleged conflict of interest by chairman and former finance minister Trevor Manuel, and non-disclosure of legal fees the company had paid on his behalf.
Old Mutual said in its letter that these claims were “incorrect and defamatory” and that it was confident that the matters raised were appropriately dealt with.
On August 16, a Johannesburg court heard arguments related to Old Mutual’s leave to appeal, a request for the court to clarify its stance on issues related to the previous judgment and a contempt of court application brought by Moyo.
The latter was brought after Old Mutual said Moyo could not return to work while it appealed his reinstatement. The judge is expected to rule on all three applications within two weeks of the hearing.
Separately, Old Mutual said in a trading update that adjusted headline earnings were expected to increase by between 6% and 12% when it reports financial results next month.