Old Mutual must have regarded its appointment of Trevor Manuel as chair as a coup. He was one of the longest-serving finance ministers in the world, is highly regarded in business circles, has an international profile and is a heavyweight who moves among the political and business elite. But did his illustrious CV result in fellow board members developing a blind spot when it came to alleged conflicts of interest Manuel may have had?
Peter Moyo, the former CEO of Old Mutual who is fighting his dismissal, said in court papers that he had raised the issue of a conflict with Manuel being chair of Old Mutual Group SA, a director of Old Mutual Plc and chair of Rothschild, with the latter earning fees for work done on the restructuring of Old Mutual. Moyo said he also raised questions about the company paying Manuel's legal fees in a matter between Manuel and the Gupta family, which was unrelated to Old Mutual. But raising these concerns resulted in his suspension and then dismissal, he alleges.
This week, the company said, in response to questions asking why it had paid Manuel's legal fees and appointed Rothschild, given Manuel's relationship with both companies: "It is a matter of concern that Mr Moyo and his legal team appear to be following a deliberate strategy of attempting to divert attention from Mr Moyo's own actions. This strategy has included casting aspersions on other directors of Old Mutual by making false and unwarranted allegations directed, in particular, at the board chair." It added that "these allegations are in no way related to the board's decisions concerning Mr Moyo".
Old Mutual says Moyo was fired over a conflict related to dividends due to Old Mutual by NMT - a company of which Moyo was a co-founder and in which Old Mutual is invested. Old Mutual will file opposing papers in the next week. But this public battle has resulted in reputational damage to the group, and, if Moyo's account of events is accurate, it highlights that perhaps Old Mutual has another problem, that of a charismatic chair that the board cannot challenge, and, if they do, there are consequences. Old Mutual denies nonexecutive directors are under the sway of Manuel.
Moyo alleges that a board member told him Manuel was "gunning" for him. Moyo said he "confirmed the distinct impression" that Manuel was using NMT to get rid of him and was "bullying other directors to pursue the NMT matter". Moyo is asking the court to interdict the company from appointing a new CEO, wants to be temporarily reinstated, be paid damages and for the court to declare Manuel and/or all the nonexecutive directors delinquent.
Prior to Moyo launching his legal attack on Old Mutual, Manuel said in a conference call with analysts a day after Moyo was fired: "This has been an incredibly difficult process ... There are a number of unanswered issues that we need to look through."
Yes, there are certainly a lot more questions shareholders would like answered.
Old Mutual's troubles may well be a cautionary tale for MTN, which, faced with regulatory challenges in some of its markets, recently padded its board with several well-connected individuals. Former deputy finance minister Mcebisi Jonas will become chair in December, and, from this month, Lamido Sanusi, the Emir of Kano and a former governor of the Central Bank of Nigeria, is on the board. A new international advisory board will be chaired by former president Thabo Mbeki and includes John Kufuor, former president of Ghana; Aisha Abdullahi, former AU commissioner for political affairs; and Mohamed ElBaradei, former director-general of the International Atomic Energy Agency.
Politically connected individuals, no matter how accomplished, can come with baggage which can come back to bite companies.
• Enslin-Payne is acting editor of Business Times
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