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The gloves are off: Old Mutual to fight Moyo in court

Another twist in what is shaping up to be a nasty legal battle between the two parties.

Old Mutual is not backing down. It says it will fight the legal battle launched by its axed CEO Peter Moyo, who has asked a high court to prevent the insurance giant from appointing a successor to his position because he wants his job back.

The insurer’s decision to oppose Moyo’s urgent application, which will soon play out at the Johannesburg High Court, adds another twist to what is shaping up to be a protracted and nasty legal battle between the two parties.

“Old Mutual has indicated that it will oppose Mr Moyo’s application and will use the court process to respond to his claims,” Old Mutual spokesperson Tabby Tsengiwe told Moneyweb.

The company had until July 1 to inform Moyo and his lawyers whether it would oppose the court application. Its decision to do so means the matter might be heard in court as soon as July 16.

Moyo, who was suspended on May 23 and dismissed on June 18 over a conflict of interest involving investment holding firm NMT Capital, which he co-founded, is not going down without a fight.

Not only does he want the high court to temporarily reinstate him as Old Mutual CEO and prevent the insurer’s board from appointing his successor until the court makes a ruling on his application, he also wants the court to impose sanctions on Old Mutual directors.

Old Mutual has appointed chief operating officer Iain Williamson as acting CEO.

‘Delinquent directors’ application

In his 165-page urgent application that was launched on June 28, Moyo asked the court to declare Old Mutual chairman Trevor Manuel and 12 other non-executive directors as delinquent under the Companies Act – a move that could see the high court censure their conduct and sully their reputations.

Moyo said the decision by Old Mutual to place him on suspension was “humiliating” and the suggestion that he was guilty of a conflict of interest was damaging to his reputation.

He also placed Manuel at the centre of Old Mutual bringing charges against him. Moyo accused Manuel of always “gunning” for him by “bullying other directors” to pursue the NMT Capital conflict of interest matter for “some inexplicable and ulterior purpose”.

Asked about Moyo’s allegations, Old Mutual’s Tsengiwe said: “It would not be appropriate to comment further while legal proceedings are pending, and we would caution the media or any other party against publishing any untested allegations as fact.”

Old Mutual is NMT’s only institutional shareholder, with the insurer owning a 20% stake that it earned through a series of funding it provided to NMT totalling R201.5 million since 2004.

Actual reason for dismissal at issue

Moyo declared his NMT business interest when he returned to Old Mutual in 2017, first when he headed the company’s emerging markets arm before taking up the group CEO role. And Old Mutual was comfortable with Moyo’s declaration and its processes to manage the conflict.

Moyo believes that his sacking was linked to him raising concerns about two incidents. In March 2018, Moyo said he queried Manuel’s “triple conflict of interest” regarding Old Mutual’s managed separation, a transaction that saw the insurer return to its South African home market from the UK.

According to Moyo, Manuel, at the time, was a director of the insurer’s parent company Old Mutual plc, Old Mutual Limited and financial advisory firm Rothschild & Co. Moyo said Rothschild’s earned “hundreds of millions of rands in fees” from advising Old Mutual on the managed separation – raising a conflict on Manuel’s part.

In another incident, Moyo said he questioned why Old Mutual was paying Manuel’s legal fees in his matter against the controversial Gupta family and their associates as it didn’t have “anything to do with Old Mutual”.

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Got to love it. Of course Moyo wants his job back; seems it’s worth 50m a year or more.

As they say, I would stand in line for this.

It’s the favourite SA notion of the rockstar CEO – like Jooste where they’re trying to claw back nearly a billion paid to him in salary and bonuses.

Guess the shareholders have only themselves to blame.

I hope Ray and MW will place this comment – they sensor comment if it is even vaguely negative to their favourite people and companies!!

My comment today to Navigator:

Not sure why shareholders are ‘…to blame.’

We invest in a company, inter alia, because we trust the board of directors.

Having heard now that legal fees for a Manuel private matter was paid by shareholders, does not fill me with confidence as another expensive fight is looming.

This is, essentially as I see it, a fight between Manuel and Moyo – – – with shareholders footing the bill.

If board members wish to oppose the application to declare them delinquent, they need to pay for the legal costs.

But, this is SA – it is open season on shareholders – all “in the interest of the company”.

My point is that these CEO’s are grossy overpaid to begin with. Very very few of them are worth this kind of money and when it goes South they are the only ones who walk away flush with cash.

The shareholders are complicit in all of this and so get what they deserve.

This matter is already proving tiresome and a complete embarrassment to Mutual.I think Manuel must also start to pack his bags,unless he is cut of the same cloth as Ramos,who feathered her nest extremely well and then jumped ship in the most unprofessional manner.And her contribution over an extended period was next to nothing.Unless their is no substance to Moyos allegations

Cleva Treva comes from the ANC cadre stable and as such probably is great at getting the big bucks without having to do the job.
Have always thought his reputation to be over rated – lots of luck and cadre deployment wind fall.

The real issue is the quality and capability of the board. To a large degree non executive directors do close to nothing here in South Africa. They read the board pack and have lunch. Look at the Steinhoff crowd-the great heads of ABSA( Steve Booysen) , Sanlam(Van Zyl) and Lategan( Dr Prof etc etc from FNB) proved to be unable to reconcile cash with accounting profits for years. Many sell by date reached tired CAs with some AA appointments to paint the board the correct colour. But substance-very little ( Look at Tongaat-bunch of gin soaked club wasps who were clueless)

Excellent comment. Of the 16 OMU board members, I think only 2 know enough about insurance accounting and provisions to hold management/finance/divisions to account. Trevor Manuel (chairperson) is certainly not one of the two. At least all the others bring diversity to the board! The boards of the other big banks and life companies look slightly more competent but also more full of back-slapping OLD buddies than that of OMU

See how BEE policies bite you in the arse!

There is no indication that the argument is about BEE here, there is a contest between two parties, which seems to stem from Peter ‘wanting his job back’. What does puzzle me is that he thinks he deserves to be kept in a job that belongs to the employer at any rate, and he is calling it his (job). Imagine that. Peter should cut his losses and go, unless he has some other principle he is pursuing, at this stage I am just struggling to see what his objective is. At the end of the day an employer can hire or fire you almost at will, bar for as regulated by the Labour Relations Act, but even that does not guarantee ‘a job for life’.

imagine if the staff of a company were rewarded like the CEO’s are. when it comes to retrenchments, many lose their jobs, when one senior persons removal would balance the scales – I am cognisant of the value that the C’s add to their respective employers but am really not enjoying working myself almost to death then being ‘rewarded’ with a coffe cup and a roll of toilet paper while they smile and say, next year we WANT MORE from you… a million bucks a week – NO ONE is worth that.

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