Manuel defends Old Mutual’s second firing of Moyo as public brawl goes on
Old Mutual chair Trevor Manuel defended his board’s decision to block Peter Moyo from returning to work as CEO, saying the insurer’s second dismissal letter was valid, as a public slinging match rumbles on.
Old Mutual fired Moyo in June, citing a breakdown in trust and alleged conflict of interest. This prompted Moyo to sue for unfair dismissal.
A court ruled in his favour, and twice ordered his reinstatement. But Old Mutual barred Moyo from resuming his duties as it is appealing, and has since issued a second dismissal letter.
Speaking to Business Day shortly after a news conference on Friday, Manuel said the company was “respectfully” enforcing its rights in a situation where a court ruling was taking those rights away.
“There is a difference of opinion about the judgment. I don’t think that having a [different] view about a judgment which we are appealing suggests that there is contempt,” said Manuel, who also took a swipe at judge Brian Mashile, calling him “a single judge who happens to wear a robe”.
The brawl has weighed on the Old Mutual share price, tainted its image and left it in leadership limbo after Mashile’s ruling in July that prevented one of SA’s biggest and oldest financial services houses from recruiting a new CEO until the appeal is heard.
At the centre of the boardroom drama is the payment of ordinary dividends by NMT Capital, a company that Moyo co-founded, while Old Mutual’s preferential dividends and preferential capital were still outstanding.
Mashile granted Old Mutual leave to appeal on September 6, and Mashile also reinforced his earlier order that Moyo be allowed back at work.
But Old Mutual insists it is enforcing its rights as employer by not welcoming him back because it has since fired him again. “The first court order reinstated him so the board was within its rights to issue a second notice,” Old Mutual chief legal officer Craig Mcleod told Business Day on Friday.
Manuel said that even though Old Mutual believed its second axing of Moyo was valid, it was still determined to overturn Mashile’s judgment on the first dismissal, which also prevented the insurer from appointing a new CEO because it was “bad in law”.
“That judgment is so bad for the company and company law that we have an interest in ensuring that it is overturned on appeal,” Manuel said at a news conference.
Unchallenged, a judgment like that would create a “massive headache” for corporate governance, he said, and the board felt so strongly that it must be “prosecuted” that it has approached the judge president’s office to expedite the hearing of its appeal.
The court was expected to hear the appeal some time between November 4 and December 6, Manuel said.
Manuel also said Moyo’s application to have all Old Mutual board directors declared delinquent, which Mashile is yet to rule on, would turn corporate governance on its head.
“In the context of the Companies Act, directors are appointed by shareholders. If a judge removes the directors who have removed one of their own who happens to be an executive the company is left leaderless,” Manuel said. “If that judgment comes to pass, the vacuum created would be disastrous for the company, for the industry and for the economy.”
Moyo’s lawyer, Eric Mabuza, said in a statement that Manuel’s attack on Mashile’s ruling constituted “yet another count of contempt of court”.
Moyo’s lawyers have previously filed two contempt of court applications against Old Mutual, one for refusing to reinstate him after the July 30 ruling and another for firing him again while the insurer was still waiting to hear if the court would grant it leave to appeal.
THE FIGHT HAS WEIGHED ON OLD MUTUAL’S SHARE PRICE, TAINTED ITS IMAGE AND LEFT IT IN LEADERSHIP LIMBO