Peter Moyo’s business partner at NMT Capital, Sango Ntsaluba, has accused Old Mutual of frustrating the separation process between the two companies, saying the insurer kept raising petty issues and was hell-bent on being a disruptive partner.
Old Mutual announced during the presentation of its interim financial results on Monday that it was in the early stages of negotiations with NMT — the investment company at the centre of its legal battle with its former CEO Moyo — to divest as the tension between the two keeps escalating.
Moyo was dismissed over alleged conflict of interest involving NMT after delayed payment of preferential funding and dividends by the company he founded with Ntsaluba, NMT executive chair, and hotel and property executive Thabiso Tlelai in the 1990s.
NMT has since paid the outstanding dividends and all of the insurer’s outstanding preference capital but Old Mutual still holds 20% of its ordinary shares.
Ntsaluba told Business Day that Old Mutual gave the company notice before Moyo’s dismissal on May 2 that it wanted to end the relationship. He said NMT has made its purchase offer for the 20% equity stake but Old Mutual did not want to move forward and was simply “stringing” it along.
“On the 25th of June, we reminded them, and again around July or early August, [we asked] them where we [were] with this matter. In the meantime, they keep telling the public that they are exiting but they are doing nothing to speed up the process,” said Ntsaluba.
Ntsaluba, who accused Old Mutual of spreading “factually incorrect and unsubstantiated statement[s]”, said if the company does not exit NMT fast enough, it will be treated like a minority shareholder with no say.
“They will have to behave like any minority shareholder. All these powers they’ve had because of a preferential agreement are no longer there. So if they want to delay, let them, but I’m sure their shareholders want to see finalisation [of] this matter.”
Old Mutual is, however, disputing NMT’s statement, saying it has not finalised its divestment because it is still negotiating the exit deal.
“The parties are and have been constructively engaged for some months in an attempt to negotiate a consensual exit,” the insurer said in a statement.
As the public battle between Old Mutual and Moyo drags on, NMT has found itself tangled in court arguments, with the insurer detailing its supposed financial position on its affidavit. One of these was the allegation that NMT’s solvency was questionable since it declared dividends while it was potentially indebted to the Industrial Development Corporation (IDC).
Old Mutual said it appeared that NMT owed IDC R157m. Ntsaluba said while the company did owe the IDC, its outstanding debt was “far less” than the figure cited by Old Mutual. NMT said it was puzzled why Old Mutual was bringing the IDC up in its dispute with Moyo since it had no connection to the state development financier.
Old Mutual said it took an interest in NMT’s debt because the IDC has called upon the company’s shareholders, which include Old Mutual, to ensure immediate payment of the supposed debt.
“The IDC has threatened to consider its legal remedies against the directors, in their personal capacities, and the shareholders”, said Old Mutual.
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