Moyo rul­ing paves way for new Old Mu­tual CEO

• Court de­ci­sion sent group’s share price up as much as 5.45% to R20.14, to close 3.25% higher

Business Day - - FRONT PAGE - Katharine Child and Nick Wil­son

Old Mu­tual’s high court vic­tory against Peter Moyo paves the way for the in­surer to fi­nally ap­point a new leader, af­ter an eight-month bat­tle with the axed CEO that caused rep­u­ta­tional dam­age and shaved bil­lions off its mar­ket cap­i­tal­i­sa­tion.

On Tues­day, a full bench of the high court in Jo­han­nes­burg up­held Old Mu­tual’s ap­peal, find­ing that the in­surer had law­fully dis­missed Moyo.

The court over­turned the first high court judg­ment that Moyo had been il­le­gally fired and which tem­po­rar­ily re­in­stated him. That re­in­state­ment was over­turned.

The rul­ing sent the group’s share price up as much as 5.45% to R20.14. Old Mu­tual gave back some of those gains to close 3.25% higher at R19.69, match­ing its largest one-day gain in June 2019, which in turn was its big­gest rise since De­cem­ber 2018.

At the heart of the case was the ques­tion whether Old Mu­tual had fol­lowed proper pro­ce­dure in ax­ing Moyo and had ad­hered to the terms of his em­ploy­ment con­tract.

On Tues­day, the judges found that the con­tract clearly al­lowed ei­ther party the right to ter­mi­nate the em­ploy­ment re­la­tion­ship with six months’ no­tice or six months’ pay­out and did not, as Moyo ar­gued, re­quire a dis­ci­plinary process be­fore the ter­mi­na­tion took ef­fect.

Old Mu­tual wel­comed the judg­ment, say­ing that it “con­firmed it [had] acted prop­erly in ter­mi­nat­ing Moyo’s em­ploy­ment the first time”.

Spokesper­son Tabby Tsen­giwe said Old Mu­tual’s board would now begin the search for a new CEO.


Old Mu­tual has been in­volved in a bit­ter feud with its former CEO since May, when it sus­pended and later fired Moyo over al­leged con­flicts of in­ter­est re­lated to NMT Cap­i­tal. Moyo is one of the founders and Old Mu­tual was a 20% share­holder.

The saga has sparked de­bate whether com­pa­nies should pay “golden hand­shakes” to lead­ers with which they have had a fall­out in or­der to end the con­flict, or in­stead en­gage, as the in­surer has done, in costly, pro­tracted le­gal dis­putes.

Sas­fin Se­cu­ri­ties deputy chair David Shapiro said Old Mu­tual’s board and Moyo both need to

“look at them­selves for al­low­ing the sit­u­a­tion to get as ugly as it has and for it to have lin­gered”.

“Where there was a dis­agree­ment with Moyo, it should have been dealt with con­clu­sively in the early stages at an in­ter­nal level be­fore it got ugly and into the courts,” Shapiro said.

Warwick Bam, head of re­search at Av­ior Cap­i­tal Mar­kets, said the saga with Moyo has been a “dis­trac­tion at all lev­els” for Old Mu­tual and that the vic­tory is “very im­por­tant to clear the slate and cre­ate space at a board level to make busi­ness de­ci­sions”.

“This vic­tory gives cred­i­bil­ity to the Old Mu­tual board.

“On the face of it, it ap­peared [Old Mu­tual] had a very strong case, which was why sur­pris­ing it took so Bam said.

Share­hold­ers do not like un­cer­tainty and op­er­a­tionally they felt “busi­ness de­ci­sions were im­paired by the lack of cer­tainty around a per­ma­nent CEO ap­point­ment”.


it was long,”

Moyo ap­peared to be shocked as the brief sum­mary of the judg­ment was read. Costs were awarded to Old Mu­tual, which means that he has to pay the le­gal fees of two of the in­surer’s and chair Trevor Manuel’s se­nior coun­sel.

Moyo said he was “dis­ap­pointed” and that he would ap­peal against the judg­ment. Speak­ing out­side court, he said that hav­ing skimmed through the 46-page judg­ment with his lawyer “there are some things that are of con­cern to us”.

“There are a lot of se­ri­ous al­le­ga­tions [by Old Mu­tual], which we dis­pute.”

He also de­nied that his be­hav­iour had “prej­u­diced” Old Mu­tual and ac­cused the in­surer of “ly­ing” about the facts of the mat­ter. He said he was will­ing to con­tinue his two other le­gal battles with Old Mu­tual.

He was fighting for his rep­u­ta­tion, Moyo said.

While Tues­day’s court case re­lated to an ur­gent ap­pli­ca­tion filed by Moyo for a tem­po­rary re­in­state­ment, he has brought a sec­ond, non-ur­gent case in which he is ar­gu­ing that his em­ploy­ment was un­law­fully ter­mi­nated and that he should be com­pen­sated. This case will also be heard in the high court in Jo­han­nes­burg.

Fur­ther­more, he has filed pa­pers ac­cus­ing Old Mu­tual of con­tempt of court for pre­vent­ing him from en­ter­ing its premises and re­sum­ing work, even when he was given a tem­po­rary re­in­state­ment by the high court.

His lawyer, Eric Mabuza, said that he was ex­pect­ing to be given a date for the con­tempt of court case soon. Mabuza dis­missed con­cerns about Moyo’s mount­ing le­gal fees. “It’s not about costs. It’s about jus­tice and vin­di­ca­tion of [Moyo’s] rights”.

Since the saga started on May 24 2019, Old Mu­tual shares have fallen 9.26%, while the JSE’s life in­sur­ers’ in­dex rose 1.29%.

/Freddy Mavunda (See Page 9)

Set­back: Former Old Mu­tual CEO Peter Moyo and his spouse Si­bongile sit in­side the high court in Jo­han­nes­burg on Tues­day. The court up­held Old Mu­tual’s ap­peal, find­ing that the in­surer had law­fully dis­missed Moyo.

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