Court rules in favour of Old Mutual in Moyo case

The High Court in Johannesburg has dismissed, with costs, former Old Mutual CEO Peter Moyo’s application to have Old Mutual non-executive directors declared delinquent and in contempt of court.

The decision on Tuesday, made by Justices Raulinga, Twala and Opperman, is based on hearings that took place in November 2021.

According to a statement issued by the insurer, the court concluded that the directors did not breach their duties to the company. “On the contrary, once the relationship between the board and Mr Moyo had broken down, the board was not only entitled but obliged to terminate his appointment,” it says.

Meanwhile, the court found Moyo guilty of breaching his fiduciary duties to the insurance company. He was suspended with immediate effect in May 2019.

According to Old Mutual, Moyo was given a notice of termination on 17 June 2019, following a report on Moyo’s related-party transactions, after various concerns emerged regarding his conduct relating to conflicting interests.

This includes two declarations of ordinary dividends by investment company NMT Capital totalling R115 million in 2018. Moyo, who is founder and former CEO of NMT, was found to have benefitted to the tune of R30.6 million.

According to Old Mutual, Moyo and his partners shared R84 million, while omitting to pay preference share dividends – valued at R65.4 million at the time – that were due to the insurance company. “The board terminated Mr Moyo’s contract only after it had concluded, in good faith and on reasonable grounds, that he had been guilty of egregious misconduct and could no longer be trusted to serve the best interests of Old Mutual,” says the insurer.

The judgment follows a decision on 31 January dismissing a damages case brought by Moyo.

The company says the application was made by Moyo following Old Mutual declining his services after an initial court order reinstated him on an interim basis pending the conclusion of his legal proceedings against the company on 30 July 2019.

The court found that Old Mutual did not defy the initial court order by preventing Moyo from resuming his position as CEO.

It also found that his employment was lawfully terminated the second time.