Re­la­tion­ship with Moyo ‘de­stroyed'

• In­surer’s di­rec­tors say CEO was fired a sec­ond time to ful­fil their fidu­ciary re­spon­si­bil­ity to the com­pany

Business Day - - FRONT PAGE - War­ren Thomp­son Fi­nan­cial Ser­vices Writer thomp­[email protected]­nesslive.co.za

Old Mu­tual says its di­rec­tors were not act­ing ir­re­spon­si­bly when they de­cided to ter­mi­nate ousted CEO Peter Moyo ’ s em­ploy­ment con­tract for a sec­ond time. In pa­pers filed in the high court in Pre­to­ria on Tues­day by Old Mu­tual’s head of le­gal ser­vices, Craig Mcleod, the com­pany de­scribes how the re­la­tion­ship be­tween the com­pany and its erst­while CEO was “com­pletely de­stroyed” in the wake of the ini­tial dis­missal and the lit­i­ga­tion Moyo launched to chal­lenge it.

Old Mu­tual says its di­rec­tors were not act­ing ir­re­spon­si­bly when they de­cided to ter­mi­nate ousted CEO Peter Moyo’s em­ploy­ment con­tract for a sec­ond time.

In pa­pers filed in the high court in Pre­to­ria on Tues­day by Old Mu­tual’s head of le­gal ser­vices, Craig Mcleod, the com­pany de­scribes how the re­la­tion­ship be­tween the com­pany and its erst­while CEO was “com­pletely de­stroyed” in the wake of the ini­tial dis­missal and the lit­i­ga­tion Moyo launched to chal­lenge it.

“It was also a step taken for rea­sons that were dif­fer­ent and sep­a­rate from those that led to the first no­tice of ter­mi­na­tion,” said Mcleod.

Moyo and Old Mu­tual ini­tially parted ways over the way in which a con­flict of in­ter­est had pur­port­edly been han­dled by the former CEO.

The dis­pute in­volves the pay­ment of div­i­dends by a com­pany called NMT Cap­i­tal in which Moyo is a di­rec­tor and share­holder, and in which Old Mu­tual in­vested by way of pref­er­ence shares.

Old Mu­tual main­tains that it should have been paid pref­er­ence div­i­dends be­fore an or­di­nary div­i­dend was de­clared and paid by NMT in 2018.

Moyo at­tributes the de­vel­op­ment to mis­com­mu­ni­ca­tion and ad­min­is­tra­tive er­rors. Fol­low­ing his ini­tial dis­missal on June 17, the former CEO launched an ap­pli­ca­tion to have the dis­missal de­clared un­law­ful.

In a de­ci­sion handed down on July 30 in the high court in Jo­han­nes­burg, Judge Brian Mashile agreed with Moyo and set aside the dis­missal and tem­po­rar­ily re­in­stated him as CEO.

Old Mu­tual has ap­pealed against the de­ci­sion and the mat­ter is await­ing court ac­tion.

Moyo at­tempted to re­turn to work and was sub­se­quently pre­vented three times from ac­cess­ing the ex­ec­u­tive suite at Old Mu­tual’s of­fice in Sand­ton, de­spite not be­ing “re­quired nor re­quested” to ap­pear by his former em­ployer.

On Au­gust 21, Old Mu­tual served Moyo with a sec­ond let­ter of dis­missal, and in the ar­gu­ment pre­sented on Tues­day, the com­pany says this was done by the di­rec­tors in or­der to ful­fil their fidu­ciary re­spon­si­bil­ity to the com­pany as re­quired by law.

Moyo’s lawyers replied with an ap­pli­ca­tion to have the com­pany be found in con­tempt of court.

“The di­rec­tors had reached the con­clu­sion, in the course of the lit­i­ga­tion that en­sued fol­low­ing the giv­ing of the first no­tice of ter­mi­na­tion, that ir­re­spec­tive of the out­come of that lit­i­ga­tion a con­tin­ued em­ploy­ment re­la­tion­ship with Mr Moyo had be­come un­ten­able,” states Mcleod.

As op­posed to show­ing con­tempt for the de­ci­sion of the court to tem­po­rar­ily re­in­state Moyo, Old Mu­tual ar­gues it was only be­cause of the de­ci­sion of Judge Mashile that it had the power to ter­mi­nate Moyo once again, just for dif­fer­ent rea­sons.

As for al­low­ing him to re­sume his du­ties, the judge­ment was not clear on what the re­in­state­ment ac­tu­ally re­quired. In any event, it could sim­ply not be re­quired to al­lo­cate the du­ties of CEO to Moyo while the com­pany is en­tan­gled in a range of lit­i­ga­tion with him.

As part of the terms of the dis­missal, Old Mu­tual has paid Moyo his salary and ac­crued ben­e­fits un­til the end of December.

Since Moyo was first dis­missed in June, Old Mu­tual’s share price has de­clined by 8.46% marginally out­per­form­ing its peers in the FTSE/JSE Africa Life In­sur­ance in­dex over the pe­riod.

The share price closed at R19.79 yes­ter­day.

IT WAS A STEP TAKEN FOR REA­SONS THAT WERE DIF­FER­ENT AND SEP­A­RATE FROM THOSE THAT LED TO THE FIRST NO­TICE OF TER­MI­NA­TION

/Freddy Mavunda

Court dis­pute: Fired Old Mu­tual CEO Moyo briefs the me­dia at the Old Mu­tual head­quar­ters in Sand­ton. As part of the terms of the dis­missal, Old Mu­tual has paid Moyo his salary and ac­crued ben­e­fits un­til the end of December.

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