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The investment firm that sunk Peter Moyo to suspension status

Old Mutual’s business dealings with NMT Capital, an investment firm linked to Moyo, resulted in a ‘material breakdown in trust and confidence’.

A conflict of interest created by Peter Moyo’s business interest outside of Old Mutual appears to be the reason behind his surprise suspension as the financial services firm’s CEO – more than a year into the top job.

This is according to Old Mutual’s chairman Trevor Manuel, who stuck to the script at the company’s annual general meeting on Friday afternoon and repeated what it told shareholders earlier – that a “material breakdown in trust and confidence” led to Moyo’s suspension.

Manuel, a former finance minister, wouldn’t budge or divulge the specifics, only saying that Moyo’s suspension was not a “result of performance or financial misconduct”.

But it’s related to behind-the-scenes business dealings.

In a cryptic manner, Manuel said Moyo’s suspension was a result of the “management of a conflict of interest in business relations with related parties”.

Along with being CEO of Old Mutual, Moyo moonlights as the co-founder and non-executive director of investment holding firm NMT Capital, which has investments across financial services, construction, real estate, manufacturing and IT.

In starting NMT Capital, Moyo joined forces with SA’s business titans Sango Ntsaluba, the founder of SA’s first black-owned audit firm SizweNtsalubaGobodo, and Thabiso Tlelai, a hotel and property entrepreneur.

Moyo formed NMT Capital after he resigned as CEO of pension fund administrator Alexander Forbes in 2007 after a disagreement with the board over the company’s strategic direction. 

Since its inception in 2008, NMT Capital has managed to build a diverse investment portfolio, with investments in JSE-listed companies including Dipula Income Fund and Basil Read (now delisted). Others in its stable are probably not on the radar of investors including Goldplat Recovery (mining company), Dealcom (asset management), Amabubesi Consulting Services (financial consulting), Willis SA (insurance broker), FalconMere (energy company), Victoria Engineering (engineering company) and others.

Moyo’s business interests were no secret to Old Mutual or its board as they were declared, along with his participation in lobby group Business Leadership SA, HIV testing centre Right to Care Health Services and crime-fighting group Business Against Crime South Africa.

Moyo declared his business interest when he returned to Old Mutual in 2017. He first headed the company’s emerging markets arm before taking up the group CEO role.

“There was no surprise about it [Moyo’s business interests outside of Old Mutual]. These [business] relations pre-exist the appointment of Moyo as CEO, were considered at the time of his appointment and were deemed to be manageable,” said Manuel.

In fact, Moyo’s NMT Capital is even mentioned in Old Mutual’s recent annual report and pre-listing statement when it listed on the JSE ¬– marking the firm’s return to its South African home market from London after its major corporate restructuring.

Close ties with Old Mutual

Old Mutual had a close relationship with Moyo’s NMT Capital to the extent that it injected capital into the firm, becoming its only institutional investor.

According to Old Mutual’s pre-listing statement, the company provided equity and preference share funding to the NMT Group (including subsidiary NMT Capital). Old Mutual’s NMT Capital is held through its long-term insurance arm Old Mutual Life Assurance Company and by the group itself.

According to the pre-listing statement, Old Mutual held R14 million worth of NMT capital’s ordinary share capital at the end of December 2017.  Old Mutual Life Assurance Company held preference shares to the value of R62 million in NMT Capital during the same period.

The long-term insurance arm also invested in the preference share capital of entities linked to NMT capital – some which have obscure names – including Amabubesi Capital Travelling (valued at R18 million), RZT Zeply 4971 (R13 million), RZT Zeply 4973 (R13 million) and STS Capital (R13 million).

Old Mutual’s backing of Moyo’s NMT Capital is profitable and has worked in its favour. Old Mutual’s long-term insurance arm received preference share dividends totaling R8 million at the end of December 2017.

Asked by a pension fund shareholder at the AGM what led to Moyo’s suspension if his business interests were adequately declared, Manuel said the board disagreed “materially on how the conflict of interest was managed, which resulted in a breakdown of mutual trust and confidence.”

“We tried to manage conflict but sometimes these things become untenable and it reached that point,” he said.

Moyo was not available to comment when Moneyweb contacted him but promised to respond to Old Mutual’s version of events that have led to his suspension. However, he told Reuters: “there is actually absolutely no wrongdoing on my part.”

While Moyo is on suspension, pending an investigation, Old Mutual’s chief operating officer Iain Williamson will serve as acting CEO.

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OMLACSA is the long term insurance arm and does life insurance, short term insurance is through Old Mutual Insure

Interesting. It still seems as if there must be a missing piece/s in the puzzle, because the facts stated above do not really justify such a sudden suspension, unless my sense of ethics has been corrupted by the Zuma era. Either way, Peter Moyo and his family should survive past payday, read somewhere he received R50 million from Old Mutual last year, speaking under correction, which is a Spur Burger or two.

Many pieces of the puzzle missing in this report. Readers and shareholders left in the dark.

Looking forward to reading the related parties note in the AFS…

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