‘Don’t jail our board members’
OLD MUTUAL: JAIL TIME ‘EXCESSIVE, INAPPROPRIATE’
Old Mutual has made an impassioned plea to the high court over the Peter Moyo saga.
Company asks for leniency should board be found in contempt of court.
Old Mutual has made an impassioned plea to the high court, saying the potential imprisonment of board members – if they are found guilty of contempt of court for not allowing ousted CEO Peter Moyo to return to work – would be “excessive and inappropriate”.
Old Mutual was responding to Moyo’s application at the High Court in Johannesburg to declare the insurance group’s 13-member board to be in contempt of court for blocking him from returning to office three times.
Moyo has been prevented from resuming his duties as CEO despite the court ordering twice that he should be temporarily reinstated as CEO since his firing on June 18 following a “breakdown of trust” between him and the board, chaired by Trevor Manuel.
In court papers dated Tuesday (October 8), Old Mutual’s head of legal Craig McLeod says the imprisonment of the insurance group’s non-executive directors (or board members) would be an “inappropriately harsh punishment and certainly not warranted”.
In August, Moyo asked the high court to censure the conduct of Old Mutual board members by declaring them to be in contempt of court because they “failed” to comply with a court order that reinstated him as CEO. A contempt of court offence relates to being disobedient or disrespectful towards a court of law regarding its judgments/ orders.
If the high court finds members of Old Mutual’s board to be in contempt of court, they might face hefty fines or imprisonment. Moyo is pushing for the latter, saying board members need to argue in court why they should not be committed to imprisonment for six months or a period determined by the court.
McLeod argues that the insurance group’s directors have “at all relevant times” handled the axing of Moyo in a manner that they believe is “in good faith” and “in the best interest of Old Mutual”.
He adds that Old Mutual board members have not acted in their personal capacities but rather discharged their fiduciary duties as directors – thus their imprisonment, which is a personal sanction, would not be appropriate.
A more appropriate sanction, if board members are found guilty of contempt of court, would be, among other things, a suspended sentence, a fine or a warning.
“It is respectfully submitted that if the court finds that the respondents [Old Mutual board members] have acted in contempt of court, then, in the circumstances of this matter, remedies of this nature would be adequate,” McLeod says in the court papers.
But Moyo believes the “failure” by Old Mutual to reinstate him “amounts to selfhelp, anarchy, and unlawfulness”. “The Old Mutual board was not permitted to ignore and fail to implement a court order simply because it does not agree therewith or because it is uncomfortable with such implication,” Moyo recently said in his contempt of court application.
He said Old Mutual’s conduct in opting to “willy-nilly ignore a court order” undermines the dignity of the court and contravenes section 167 (5) of the constitution, which provides that “an order or decision by a court binds all persons to whom it applies”.
Contempt of court hearing to be heard in November
GO TO JAIL. The 13-member board’s failure to comply with a court order ‘amounts to self-help, anarchy, and unlawfulness’, says Old Mutual’s former CEO.