Old Mutual: Moyo can’t be reinstated, company will be 'ultimate loser' | Fin24
 
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Old Mutual: Moyo can’t be reinstated, company will be 'ultimate loser'

Jul 19 2019 16:33
Tehillah Niselow, Fin24

The legal team representing Old Mutual [JSE:OMU] has picked apart former CEO Peter Moyo's urgent application to be re-instated, arguing that it should be dismissed with costs by the Johannesburg High Court and that if Moyo returns to his position, the company will be the "ultimate loser". 

Friday was the second day of arguments in the high profile case between Moyo and the JSE-listed insurer. Judgement was reserved by Judge Brian Mashile, who said he hopes to to be ready to make a ruling in a week’s time, on July 26.

Advocate Hamilton Maenetje, for Old Mutual, on Friday responded to the application presented on Thursday by Moyo’s team of legal heavyweights, including Advocates Dali Mpofu and Tembeka Ngcukaitobi.

Moyo was suspended on May 24 and axed on June 17. In his urgent court application, he asserted that Old Mutual chairperson Trevor Manuel was behind his sacking and had multiple conflicts of interest in his business dealings.

The insurance company, in turn, said Moyo was fired due to his conflict of interest relating to his position as a co-founder of investment company NMT Capital. Moyo declared his shareholding in the firm when he was hired by Old Mutual.

Conflict of interest 

The conflict of interest arose, according to Old Mutual, when Moyo disbursed dividends to shareholders while the Old Mutual preferential dividends, as an institutional investor, were in arrears.

Maenetje says at the heart of the loss of confidence in Moyo was how he handled the conflict of interest, and not his position in both companies, which he had declared. He added that Moyo failed to protect shareholder value while he was CEO of Old Mutual.

Moyo claims that there was a delay in the payment of dividends by NMT Capital and this was communicated and accepted by a member of the board. 

Legal fees

Wearing a grey suit, Moyo sat in the front row in court on Friday, supported by friends and family. There was no sign of Manuel in the courtroom.

In his legal paper, Moyo advanced that the payment of the shares was a ruse to remove him from the company and the real reason behind his dismissal was his questioning of Manuel’s legal fees being paid for by the insurer.

The case relates to Manuel approaching the Johannesburg High Court in December 2018, where he applied for access to information from representatives of Gupta-owned company Sahara Computers. This followed a newspaper story titled "#GuptaLeaks: Guptas spied on Manuel, Malema and bank bosses".

Maenetje told the court that the decision to pay Manuel's legal costs was approved by the full board of Old Mutual, and Moyo signed off on the expense which was included by the auditors in the company’s financial statements.

Old Mutual also wants the court to rule against Moyo's reinstatement with four and a half years left on his contract, as he and the board will be at loggerheads and the company will be the "ultimate loser", according to Maenetje.

Several other technical arguments were advanced by Maenetje, who said even if the court finds his dismissal was procedurally flawed, it remains at the judge's discretion whether to reinstate him, and this does not happen automatically.

Maenetje further dismissed Moyo's assertion that his constitutional rights were violated by his axing. Old Mutual maintains it had to make the announcement of his leaving public due to listing requirements by the JSE using the stock exchange news service (SENS) and this did not violate his right to dignity.

Reputational harm

Mpofu replied for Moyo that Old Mutual was asking the judge to wear "blinkers" while examining all the evidence.

"What we have here is a potpourri of misleading assertions," Mpofu said.

Mpofu took issue with Old Mutual not holding a disciplinary hearing before suspending and later firing Moyo.

"In what world is a person not entitled to an opportunity to prove his innocence?" Mpofu argued.

He added that Old Mutual could have said the relationship with the former CEO had "irretrievably broken down" instead of maligning his reputation.

"[There is] reputational harm as we are sitting here," Mpofu said.

While Judge Mashile promised to try to deliver a ruling on the matter by next Friday, this urgent application only forms Part A of Moyo's legal fightback. In Part B, which has not yet been heard, he wants the court to declare the insurer’s board members delinquent, and if this is granted, they will be unable to serve as non-executive directors for several years. 

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