eBusiness Weekly
Old Mutual’s former chief executive Peter Moyo plans to take the South African insurer to court after he was fired on Tuesday following a row over an alleged conflict of interest.
The newly-listed insurer said in a statement that it had sacked Moyo after attempts to separate amicably following his suspension as CEO in May broke down.
A lawyer for Moyo, who was suspended less than a year after becoming CEO, said Old Mutual’s statement was at best incomplete and at worst misleading, and that it had suffered no financial or other prejudice as a result of his actions.
“Mr Moyo will, therefore, challenge Old Mutual’s conduct in court, where we trust the truth will be ventilated,” Moyo’s lawyer said in a statement.
The breakdown between Moyo and Old Mutual makes his departure difficult and potentially costly as South Africa’s second-largest insurer could be ordered to make a payout to its former CEO if he wins his case in court.
A spokeswoman for Old Mutual said she had not seen the statement from Moyo’s lawyer and could therefore not comment.
Old Mutual shares, which rose after the insurer said in a statement that Moyo had been sacked, dropped back to 0.32 percent below their previous close by 15:22 GMT.
Dividend dispute
Old Mutual said Moyo’s actions since his suspension had contravened his fiduciary duties to Old Mutual, his employment contract and his notice of suspension, and that it had terminated his employment following unsuccessful attempts to engage with him.
The dispute relates to dividend payments made by NMT Capital, an investment firm Moyo founded, where he was a non-executive director and in which an Old Mutual subsidiary is the only institutional investor.
Moyo’s interest in NMT Capital was disclosed upon his employment and protocols put in place to manage the relationship.
However, Old Mutual said on Tuesday that two dividend payments made by the firm in 2018, totalling R115 million ($7,8 million), were a breach of its rights as a preference shareholder because “arrear preference dividends” were unpaid at the time and preference share capital was redeemable at the time of the second payment.
Benefit of more than R30 million
Moyo chaired the board meeting of NMT Capital where the second ordinary dividend was declared, and that the benefit to Moyo and his personal investment company of the payments was R30,6 million, it added.
The full-year financial statements for Old Mutual Life Assurance Company, the Old Mutual subsidiary, said the total impairment on preference share capital held in NMT Capital and NMT Group amounted to R97 million in December 2018.
NMT Capital declined to comment
Moyo’s lawyer said Old Mutual benefited from the ordinary dividend payments, was paid millions of rand in preference dividends and at all times had a separate director on the board who voted in favour of all the payments.— MoneyWeb.
