Just hours after the group said that it was planning to fire Moyo after it found a breach of dividend payments of R115million of which the benefit to Moyo’s NMT was about R31m, his lawyers said they would fight the move, as Old Mutual was party to the decision to pay him dividends.
“Mr Moyo will therefore challenge Old Mutual’s conduct in court, where we trust the truth will be ventilated,” said Moyo’s lawyers.
The board, which is chaired by former finance minister Trevor Manuel, said it had resolved to give Moyo notice of termination of employment following unsuccessful attempts to engage on the terms of separation.
It said it would shortly initiate a process to appoint a new chief executive while Iain Williamson continued in Moyo’s position until further announcements were made.
The 174-year-old insurer said it decided on this unprecedented move as directors of all institutions had a duty to be vigilant regarding the management of conflicts of interest.
“The importance of this duty has been highlighted by a number of recent corporate governance breakdowns within both the private and public sector,” the board said.
In an extraordinary move in May, the group placed Moyo on suspension following a probe into the dividends.
Yesterday, Old Mutual said alarm bells were activated when Moyo and his personal investment company benefited from R30.6m. It said Moyo benefited after NMT Capital declared two ordinary dividends totalling R115m in 2018 in breach of company policy.
Moyo, 56, previously insisted he had done nothing wrong, as he had declared his interest in NMT prior to his appointment. The board said it had not been provided with an acceptable explanation why, in clear contravention of the relevant preference share agreement with Old Mutual and Moyo’s employment obligations, ordinary dividends were declared while debt to Old Mutual was outstanding.
“On May 23, 2019, the board discussed these matters at length and considered its options, noting its duties towards its stakeholders. The board came to the conclusion that there was a material breakdown in trust and confidence in Mr Moyo,” the board said.
Graeme Korner, a portfolio manager at Korner Perspective, said boards were increasingly sensitive to corporate governance issues following accounting scandals that befell the beleaguered Steinhoff and Tongaat Hulett.
“We are in a different space than we were five to 10 years ago, and boards are sensitive to the needs of investors,” Korner said. “We have seen a number of chief executives resigning, but this is the first time a chief executive has been fired for impropriety.”
Korner said Moyo had the option to approach the Labour Court to appeal his dismissal. “It is up to Moyo to approach the court to fight that the dismissal is unfair,” said Korner.
Ajay Lalu, the managing director of Blacklite Consulting, said Moyo’s dismissal was unfortunate, given that he had declared his interest in NMT prior to his appointment.
“This is an important lesson for executives, especially black executives. People like Moyo bear the brunt, while people like Markus Jooste, the former Steinhoff chief executive, parades freely without any real consequences. In my view, Jooste’s actions are far worse. The duality of standards (under the guise of good corporate governance) when it comes to black executives should be addressed as part of a larger debate of racism in corporate South Africa,” said Lalu.
Old Mutual declined 0.32percent on the JSE yesterday to close at R21.62.