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Old Mutual Limited's share price [JSE:OMU], already on a downward trend during Tuesday, declined further after the Gauteng High Court in Johannesburg interdicted the insurer on Tuesday from appointing anyone in the place of axed CEO Peter Moyo.
Moyo brought an urgent application to be reinstated and for his dismissal to be declared unlawful and unconstitutional.
Just before 14:30 - before the judgment was delivered - shares were trading 1.62% lower at R20.02 per share. By just before 15:00 the share price dipped below the R20 mark, trading 1.77% lower at R19.99.
Shortly after the court ruling was announced, the share price fell further, trading 3.19% lower at R19.70. By 15:30 it had fallen to R19.48 per share and just before 16:00 the share price was trading down 5.41% at R19.25.
The share price finally closed on Tuesday down 5.55% at R19.22 per share.
Further outcomes pending
The court declared Moyo's dismissal unlawful and found he should return to his position immediately. Moyo's permanent reinstatement is, however, pending the outcome of another part of his application, which will be heard at a later stage. This second part of his application, intended to be set in motion within 60 days of the outcome of Tuesday's ruling, will see him lodge a damages claim for reputational harm.
Moyo also wants the court to declare the Old Mutual board "delinquent directors" which will prevent them from holding non-executive directorship positions for several years.
Moyo was suspended in May and subsequently fired from the insurer in June. Fin24 reported earlier that Moyo's legal team argued before Judge Brian Mashile that he (Moyo) was suspended and later fired because he was a whistle-blower who revealed conflicts of interest in the firm related to chairperson Trevor Manuel.
Another argument for reinstatement made by Moyo’s legal team was that Old Mutual had failed to undertake disciplinary proceedings against him, which violates labour law.
Old Mutual's legal team, on the other hand, argued that it was Moyo who had a conflict of interest. They said Moyo failed to pay the insurance company and institutional investor dividends from NMT Capital, a company he co-founded. Old Mutual's legal team also argued that Moyo failed to protect shareholder value while he was CEO.
