Axed Old Mutual CEO Peter Moyo says jail terms are the appropriate punishment for Old Mutual directors for the contempt of court he is accusing them of.
Responding to Old Mutual’s court papers filed last week when the insurer argued there was no basis for the court to find that its directors disobeyed its order, Moyo said anything less than a term in custody would be “disturbingly inappropriate” because Old Mutual has committed the worst type of court disobedience.
“This case is most appropriate for direct incarceration,” he said.
Moyo filed a contempt of court application in August after the insurer barred him from resuming his duties at its Sandton office after a high court ruling that he should be temporarily reinstated.
His legal team has since added a list of contempt of court charges, including Old Mutual’s move to fire Moyo for the second time in August and the appointment of Iain Williamson as acting CEO. Williamson was appointed in an acting position immediately after Moyo’s axing on June 18.
Moyo was fired by the insurer over an alleged conflict of interest after NMT Capital, a private equity company he cofounded, paid ordinary dividends while it owed Old Mutual preferential capital and had not paid preferential dividends to the insurer on time. The high court in Johannesburg has issued two orders for his reinstatement, but Old Mutual maintains that his second axing was valid.
In the court papers filed on Wednesday, Moyo, who is suing the insurer for R250m for damages and for what he would have earned had he not been fired, maintained that the directors must be committed to prison for at least six months.
In its court papers filed last week, Old Mutual said its directors “genuinely and in good faith” believed the legal advice that was given to them. Old Mutual had been advised that judge Brian Mashile’s court order to reinstate Moyo was “suspended as a matter of law” as the company was appealing against it.
The company said it was advised that it was within its rights to not let him back since he had already been paid for his six months’ notice period and to issue a second letter of dismissal.
Moyo says the directors cannot claim ignorance of the law. “The fact that the directors had access to the best legal advice but somehow still managed to undermine the legal process in such fashion should count as aggravation, not mitigation,” he argued in his latest affidavit.
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