JOHANNESBURG – Old Mutual on Tuesday pleaded with the South Gauteng High Court to accept its second letter terminating under-fire chief executive Peter Moyo as lawful.
Old Mutual told the court that the issuing of the second letter of termination was lawful and not in contempt of court.
In the court papers responding to Moyo’s contempt-of-court application, Craig McLeod, Old Mutual’s head of legal, said the decision to issue the second notice of termination was a step that was logically and legally discrete from the decision to issue the first notice of termination.
McLeod said it was a step taken for reasons that were different and separate from those that led to the first notice of termination.
He said the directors had reached the conclusion, in the course of the litigation that ensued following the first notice of termination, that, irrespective of the outcome of the litigation, a continued relationship with Moyo had become untenable, and that consequently it was in the best interests of the company to give further notice of termination of his employment.
“The second letter of termination was issued not because Moyo had instituted the litigation, but the nature of the litigation and the rights and interests of Old Mutual and the board and the statements by Moyo around the litigation on how he had lost trust and confidence in the board, all of which made it clear that any future relationship with Moyo and the board was untenable,” McLeod said.
He said all the directors of the company had a primary duty to act in the best interest of the company as prescribed by the Companies Act.
“The primary reason for the second notice of termination was the discharge by directors of that statutory duties,” said McLeod.
Old Mutual axed Moyo twice, first in June and again in August in an open letter penned to shareholders in which the company said it was clear that a continued employment relationship with Moyo was untenable.
Moyo sued Old Mutual and its directors for contempt of court after refusing to let him resume his duties.
“The directors cannot discharge their duties effectively in circumstances in which the incumbent chief executive considers them to be delinquent, frequently asserts this publicly, and actively sets out on a path of hostile litigation to establish that they are delinquent directors as contemplated in section 162 of the Companies Act. Moyo had done all of these things,” said McLeod.
The South Gauteng High Court in July ruled that Moyo be reinstated, pending as chief the outcome of Part B in which Moyo sought to have the company’s directors as delinquents.
Moyo sued the company for R250 million or his reinstatement after the insurer refused to let him commence his duties as a chief executive, despite the High Court ruling that he should be reinstated.