Although the Johannesburg high court ruled on Tuesday that Peter Moyo should immediately be reinstated as Old Mutual CEO, his return to the life insurer on Wednesday was marked by an urgent meeting with lawyers on whether he can resume his duties.
Moyo returned to Old Mutual’s headquarters in Sandton to resume his duties as CEO after Judge Brian Mashile ruled that his axing from the life insurer was unlawful because he was not afforded a disciplinary hearing before he was first suspended on May 23 and fired on June 18.
However, Old Mutual said it has launched an appeal at the Supreme Court of Appeal, which might suspend the implementation of the high court judgment. The insurer said that it has informed Moyo and his lawyers that he was “not required or permitted to resume his duties” pending the outcome of appeal proceedings.
“At issue here is the difference in interpretation of the impact of the leave to appeal application. Either party is at liberty to approach the court for the relief,” said Old Mutual’s spokesperson Tabby Tsengiwe.
Dressed in a dark blue suit and flanked by his wife and daughter, Moyo walked into Old Mutual offices around 8am to make good on his promise to go “back to work and rebuild Old Mutual”. Moyo has been seen walking around the Old Mutual building but it is unclear whether he has returned to his office.
There was pushback from Old Mutual about Moyo returning to work as it held an urgent and confidential meeting with its lawyers about challenging the high court judgment.
Moneyweb understands that the meeting was also about how Old Mutual will handle Moyo’s return when the high court has interdicted the insurer from appointing his successor – even though the company has already appointed chief operating officer Iain Williamson as acting CEO.
Moyo’s lawyer Eric Mabuza sent a three-page letter to Old Mutual saying that he received Old Mutual’s communiqué “just before midnight” on Tuesday, in which the insurer stated its intention to appeal the judgment.
In the letter, Mabuza said Old Mutual’s claim that Moyo was not entitled to return to work until the court makes a ruling on the appeal was based on “the incorrect legal advice”.
Mabuza said while a high court order for interim relief was “indeed appealable”, Old Mutual’s notice to appeal the judgment did not “automatically suspend” Judge Mashile’s judgment to have Moyo immediately reinstated as CEO.
Old Mutual believes that Moyo’s court application was “ill-conceived, contained a number of false allegations, and should have been dismissed”, adding that it is optimistic that another court might come to a different conclusion.
However, Mabuza said that when Old Mutual appeals the high court judgment it must prove, among other things, that the insurer will “suffer irreparable harm” if the appeal is not granted.
Old Mutual also has to demonstrate that Moyo “will not suffer irreparable harm if the court” rules in favour of the insurer to appeal the judgment.
“Any other course or steps taken by your client to prevent or impede our client form executing the decision of the court by returning to his office with immediate effect will accordingly be in willful contempt of court.”
According to Mabuza, Old Mutual proposed to Moyo that both parties should involve their lawyers to resolve their dispute. However, Old Mutual’s lawyers were not available on Wednesday. “Hopefully, the discussions between counsels will still take place today [Wednesday].” Moyo has since left Old Mutual’s offices.
The insurer fired Moyo on June 18 saying that the breakdown was attributed to a conflict over ordinary dividend payments declared by NMT Capital worth more than R100 million during its 2018 financial year. Moyo launched an urgent application at the high court in Johannesburg to declare his sacking as unlawful, which would pave the way for him to be temporarily reinstated as CEO.
When Old Mutual initially suspended Moyo, it cited a breakdown of trust and confidence between both parties. Manuel said there was no financial misconduct on Moyo’s part. The insurer later said there was a conflict of interest due to Moyo’s involvement with investment holding firm NMT Capital, which he co-founded in 2002. Old Mutual owns a 20% stake in NMT.
After Tuesday’s high court judgment, Old Mutual’s share price fell nearly 6% to R19.32, which marked its biggest one-day drop in about four months. During Wednesday’s intra-day trade, the share price fell 0.26% at 14:30.