Major victory in longrunning legal battle against Peter Moyo
High Court upholds appeal of temporary reinstatement of axed chief executive Peter Moyo
OLD MUTUAL, one of South Africa’s oldest insurance companies, scored a major victory yesterday when the South Gauteng High Court upheld its July appeal of the temporary reinstatement of axed chief executive Peter Moyo with costs.
The bench of judges comprising judge Pieter Meyer, Elias Matojane and Raylene Keightley ruled that last year’s interim should be corrected before it has any further consequences.
“The irreparable harm which Old Mutual, one of South Africa’s oldest and largest companies in our country with more than 30 000 employees – its shareholders, employees and other stakeholders – stand to suffer if the interim order is allowed to stand, requires no imagination or elucidation,” said the judgment.
South Gauteng Court Judge Brian Mashile in July granted an interim order which temporarily reinstated Moyo citing that the insurer’s decision to suspend and subsequently dismiss him was unlawful.
However, yesterday the court ruled that as a result of the order Old Mutual was forced to live with its adverse effects as long as the main action was pending or remained inconclusive.
“It is forced to be governed by a chief executive and board, to whom the chief executive is supposed to report and obliged to maintain its ongoing confidence, who have lost complete trust and confidence in one another and who are involved in ongoing litigation,” said the ruling.
Old Mutual spokesperson Tabby Tsengiwe said yesterday that the group welcomed the ruling.
“It confirms that Old Mutual acted lawfully in terminating Peter Moyo’s contract. Importantly, it also provides legal clarity on corporate governance and board stewardship, including the relationship between boards and executive leadership,” Tsengiwe said, adding that Old Mutual was committed to good governance and the appropriate management of conflicts of interest.
The spat between Old Mutual and Moyo, which has wiped out R17 billion of the insurer’s value, is expected to continue after Moyo’s legal team said yesterday that it planned to appeal the decision.
Moyo’s lawyer, Eric Mabuza, said the appeal would suspend today’s judgment. “We will be asking for an urgent date to hear the contempt application, as well as part B of the application. Today’s (yesterday’s) judgment was about temporary reinstatement pending Part B,” Mabuza said.
In Part B of Moyo’s court challenge he wants the board to declared delinquent under Section 162 of the Companies Act. Moyo was axed in June 2019 when the board cited a material breakdown of trust and confidence in him in a conflict of interest over the NMT Group. Old Mutual had prevented Moyo from resuming his duties and accessing his office.
Old Mutual shares rose 3.25 percent to close at R19.69 on the JSE yesterday.