Old Mutual fires new dismissal salvo at ousted CEO Peter Moyo
TENSIONS between Old Mutual and its axed chief executive Peter Moyo heightened further when the company yesterday moved to sack him for the second time in two months, despite a court ruling ordering for his reinstatement.
However, the market barely reacted to the renewed salvo in the corporate battle, with Old Mutual’s share price closing 0.16 percent lower at R18.28.
Old Mutual, South Africa’s oldest insurer, yesterday penned a letter to shareholders saying it was clear that a continued employment relationship with Moyo was untenable.
“It is clearly in the best interests of the company and its stakeholders that the employment relationship with Mr Moyo should come to an end.
“For this reason, Old Mutual has now given Mr Moyo a further notice terminating his employment,” the company said.
Thabang Motsohi, a leading organisational strategy consultant, described the development as a quagmire, adding it exposed the Old Mutual board as desperate and strategically confused.
“Not good for an entity of this size. The board needs serious review. Unco-ordinated statements are issued with scant regard for implications. Absolute disaster. They need help,” he said.
According to Reuters, Moyo’s lawyer, Eric Mabuza, described the open letter as “corporate madness”, and said Old Mutual directors – who Moyo has applied to have declared delinquent – were protecting themselves rather than the company.
“Somebody needs to intervene to save Old Mutual from itself and its directors,” he said, adding the purpose of the second employment termination notice while the legal case was ongoing was unclear.
Moyo was fired in June when the company gave him a six months notice of termination of his employment citing that the board had lost trust and confidence in him.
The company also raised a conflict involving Moyo’s NMT Capital, saying his involvement in approving NMT Capital ordinary dividend payments in his capacity as a director of NMT Capital at a time when various amounts were due and payable by NMT Capital to Old Mutual, was a problem.
“This step, as with previous steps taken concerning Mr Moyo, has been taken after legal advice and on careful reflection by directors, with proper regard to their fiduciary duties to the company.
“We must accept that Mr Moyo may decide to challenge this step too. We will stand our ground if he does, naturally and at all times continuing to respect the law and our court system,” the company said.
Moyo approached the court in June to rebut his dismissal which the court ruled in his favour, saying the axing was unlawful and citing the company was not allowed to axe Moyo without first holding a formal disciplinary process in line with his employment contract.
Old Mutual has said it disagreed with the court, because it did not believe the contract required this and believed a fair and appropriate process was followed before the notice was given.
“We are advised there are good prospects that another court may agree with us, either in an appeal or when the merits of Mr Moyo’s case are eventually heard,” it said.