Axed Old Mutual chief executive Peter Moyo is back in his job after the high court in Johannesburg ruled yesterday that he should be reinstated with immediate effect, sinking the share price by almost 6 percent amid looming reputational damage for the insurance company.
Old Mutual closed 5.5 percent lower at R19.23 a share yesterday on fears of looming reputational damage and possible golden handshake for Moyo. Judge Brian Mashile ruled that the insurer’s decision to suspend and subsequently dismiss Moyo had been unlawful. He interdicted the 174-yearold company from appointing Moyo’s replacement. The Old Mutual board axed Moyo last month for a “material breakdown in trust and confidence in Mr Moyo” and over the late payments by NMT Capital of preference-share dividends to the insurer. NMT was founded by Moyo and is 20 percent owned by Old Mutual.
The judgment clears the way for Moyo to continue with Part B of his court challenge in which he wants the board to be declared delinquent under Section 162 of the Companies Act. Speaking on the sidelines of the case, Moyo, 56, said he was looking forward to completing his term as chief executive at the company. “I am back as chief executive at Old Mutual. The most important thing is to go back and rebuild Old Mutual,” said Moyo, who has served as chief executive since 2017.
Moyo approached the court to rebut his dismissal which he believed constituted an unlawful reprisal after raising improprieties on the part of Old Mutual board chairperson Trevor Manuel. Moyo’s legal council, Eric Mabuza, welcomed the judgment, saying justice had prevailed. “This case was all about accountability, transparency, and the protection of corporate governance. It is a typical David versus Goliath case. In the end, justice prevailed. The ruling is precedent setting, which means companies need to follow due process with their employees,” Moyo said.
Moyo argued that he had been victimised by the board after raising a triple conflict of interest against Manuel on March 2018. Moyo alleged a conflict of interest arose in Manuel leading the separation of Old Mutual’s South African business from the London operations. Moyo had also claimed Rothschild was one of the companies which stood to benefit from hundreds of millions of rand in fees as one of the advisers of the separation was chaired by Manuel. Theo Botha, a shareholder activist, said the ruling was a blow for Old Mutual and a bitter pill to swallow for shareholders and customers. “The relationship between Old Mutual and Moyo is severely damaged. I don’t think it can be repaired. They will have to sit and decide on Moyo’s exit package,” said Botha. Old Mutual said it was studying the judgment.