Old Mutual says it is open to settlement with Peter Moyo to end damaging dispute

Old Mutual, whose shareholders have lost about R17bn in value since the company first suspended former CEO Peter Moyo, said it may take years before it recovers from the reputational damage caused by the saga.

It also said that it was open to a settlement.

The parties were back in court on Wednesday, with the insurer reiterating that it had no trust in Moyo, which meant that a court ruling that he be reinstated was “impossible” to implement and therefore should be overturned. Moyo’s lawyers, in turn, accused the insurer of imposing a corporate “death sentence” on him by accusing him of conflict of interest and then dismissing him without subjecting him to a disciplinary inquiry.

Old Mutual has been embroiled in a bitter feud with its former CEO since May, when it suspended, and later fired, him over alleged conflicts of interested related to NMT Capital, of which Moyo is one of the founders and Old Mutual was a 20% shareholder.

Since the saga erupted, Old Mutual shares have slumped more than 12% while the JSE all share index has barely moved. The life/assurance index is down 3.5% in the same period while competitor Sanlam is up 5.5%.  

Old Mutual spokesperson Tabby Tsengiwe told Business Day on Wednesday that it would “take years” to undo that damage, and reiterated that Old Mutual remained open to settlement negotiations with Moyo. The former boss has sued Old Mutual for R250m for breach of contract and harm to his “dignity, esteem and self worth”. 

In the meantime, though, the company is appealing against judge Brian Mashile’s July order that it reinstate Moyo and hold back on appointing his permanent replacement. It is also seeking the judge’s recusal from the contempt of court application launched against it and its nonexecutive directors by Moyo.

Advocate Gilbert Marcus, arguing for the 174-year-old insurer’s board, said the relationship between Moyo and the board was clearly “dysfunctional” and that Mashile's description of it as “unwholesome” was “the understatement of the year”. 

He argued that Mashile failed to properly consider this breakdown when he ordered that Moyo be temporarily reinstated pending the outcome of his substantive legal challenge to his removal.

Marcus argued that Moyo himself had effectively admitted that he was unable to work with the nonexecutive members of the Old Mutual board by seeking an application for them to be declared delinquent.

Advocate Dali Mpofu contends that Moyo was suspended and fired because, among other things, he raised concern about the company funding the private legal costs of its chair, Trevor Manuel, in his battles with Gupta associate Ashu Chawla and former cabinet minister Nomvula Mokonyane.

Not reinstating him on the basis of a relationship breakdown, he contends, would amount to rewarding those who had “victimised” him for acting as a whistle-blower.

Old Mutual previously stated that it had terminated Moyo’s employment because of a breakdown in its trust and confidence in him, based on a “conflict of interest” between his position as CEO and his status as founder of NTM.

The conflict arose after NMT declared and paid two sets of ordinary dividends in 2018 without paying preference capital or preference dividends that were due to Old Mutual, despite company law dictating that dividends to preference shareholders should be paid before those due to ordinary shareholders.

Old Mutual later received its preference dividends.

Lawyers for Old Mutual and its board sought to downplay the allegations on Wednesday, but instead argued that he was fired because of a breakdown in trust.

Moyo’s advocate, Tembeka Ngcukaitobi, said it was apparent that Old Mutual had accused Moyo of gross misconduct and therefore was obliged to subject him to a disciplinary inquiry before terminating his employment.

Moyo’s lawyers further argue that the interim interdict granted by Mashile cannot be appealed.