IDC joins queue of Moyo’s creditors

NMT Capital, the company at the centre of conflicts with Old Mutual, is facing a claim of more than R150m from the Industrial Development Corporation (IDC).

While NMT Capital owner Peter Moyo, who was dismissed as CEO of Old Mutual in June, continues his court battle with the life insurer, the IDC now joins it in the queue for payment from NMT.

Both sent letters of demand last week to the company co-founded by Moyo as Amabubesi in the early 2000s.

The IDC is threatening legal action to recoup R157m. This amount was a guarantee provided by NMT after the IDC funded an investment by an NMT subsidiary in the construction sector.

A disastrous few years in the sector wiped out the IDC’s investment.

By November last year, the IDC and NMT had reached a settlement, but the corporation has since terminated the agreement and wants its money, because it claims NMT had not played open cards.

Several attempts to reach NMT management for comment were unsuccessful. Moyo himself did not respond to a request for comment.

Old Mutual meanwhile said on Friday it had received R46.5m from NMT as a redemption amount in satisfaction of its preference shares.

The life insurer suspended Moyo as CEO in May and later terminated his employment due to a breakdown of trust and confidence over conflicts of interest.

One particularly sore point was NMT’s decision to distribute dividends to ordinary shareholders – from which Moyo benefited – while payments to preference shareholders such as Old Mutual were still in arrears.

Moyo went to court and won his case for reinstatement, only to be dismissed again last month. He is fighting this.

Old Mutual also wants a further R21.6m, according to a letter of demand from Old Mutual’s lawyers, Bowman Gilfillan, and seen by Business Times.

This is the amount Old Mutual says NMT owes it under the guarantee for the indebtedness of a company called Amabubesi Capital Travelling. Moyo has denied any wrongdoing.