Old Mutual board member Nombulelo Moholi has come out in defence of the company’s decision to get rid of its chief executive Peter Moyo and said the loss of faith in him was Moyo’s own doing.
In an interview with City Press this week Moholi, accompanied by the company’s spokesperson Tabby Tsengiwe, said the loss of confidence in Moyo was as a result of a few issues.
1. The two dividend payouts which the company received but did not know it had received; and
2. When Old Mutual found out about the payouts it had an issue that it wasn’t given priority.
Moholi said Moyo had a duty to look out for the interests of Old Mutual over that of his own company, NMT Capital, should such conflicts arise.
This was despite the fact that Old Mutual had a representative on the four-person NMT Capital board, Mobasheer Patel, whose mandate was exactly that.
“The agreement was that Peter [Moyo] would prioritise Old Mutual. It’s in his employment contract which Peter as an adult and a CA [chartered accountant] felt was good enough to sign and a contract is a contract,” she said, adding that in retrospect maybe the company could have seen that it would not have been possible to manage this conflict.
Moyo, alongside Sango Ntsaluba and Thabiso Tlelai, are the founding directors of NMT Capital with Ntsaluba and Old Mutual the biggest institutional investor.
Moholi said it was also “natural” that NMT was supposed to inform Old Mutual of Patel’s resignation from the board and needed replacing.
Patel was chief financial officer and head of Old Mutual wealth and investment and was forwarded to the NMT Board based on that.
Patel left Old Mutual and joined Media24 as chief financial officer in September last year.
Moholi pointed out that among the issues was the non-payment of dividends to Old Mutual timeously by NMT.
Though the company was paid dividends twice along with ordinary shareholders, Moholi said the issues related to the timing of capital and dividend payouts as well as Moyo’s response to them.
“The board was alarmed to see that dividends were paid out to ordinary shareholders including Old Mutual sometime in July. And it would look like there was another ordinary dividend paid sometime in January that had also been declared which was paid and Old Mutual also received it. The question was that we [Old Mutual] are the preferent shareholder in NMT and we should be prioritised above ordinary shareholders,” she said, adding that Patel was part of the board when the two dividends were paid but resigned almost immediately after the second payout.
She said the board needed an explanation on how ordinary shareholders were paid ahead of the company but never got it.
“The board approached NMT Capital for answers and for months no results were forthcoming and, as a last resort, we asked Peter,” she said.
She said it was only after the unsuccessful request to Moyo that the company decided to launch an investigation, which included searching its IT systems to look for board meeting minutes sent to Patel.
These indicated that the preference dividends were paid out “soon after the meeting”, Moholi said.
Moyo had previously said he found out the company was investigating him behind his back.
But Moholi said the timing of the preference payout was suspicious in that it was only paid out when Old Mutual enquired.
Moyo, according to Moholi, was also at some time summoned by the board to explain some of the details relating to the payouts and when he was questioned, he said that he saw nothing wrong on his side.
It was only after that meeting in May that the board decided it no longer had faith in Moyo.
“The intention of the board was to deal with this quietly and it was Peter who took it public,” she said.
She said it was after Moyo allegedly went public that the company suspended him and issued a statement.
Moholi, who is the former chief executive of Telkom, said she was surprised when, in court papers, Moyo mentioned that board chairperson Trevor Manuel was conflicted in three ways and his (Moyo’s) axing was victimisation for having blown the whistle.
“We were as shocked to learn that in his view this whole thing was between him and Trevor Manuel ... about him blowing the whistle about the fees,” she said.
She also confirmed that the company footed the legal bill for two legal matters that Manuel was involved in his personal capacity because of the “reputational risk involved for Old Mutual”.
She did not explain how the paying the bills would mitigate that risk but said Manuel did not request the company to pay the legal fees as it was the company’s own lawyers that raised the matter.
Asked why Old Mutual had offered the media a host of directors to speak about the matter except for Manuel, despite him being at the centre of the litigation as the chairperson, Tsengiwe randomly reiterated that there was a difference between Manuel’s personal capacity and his official Old Mutual capacity.
“I am not speaking on behalf of Trevor, I am speaking on behalf of Old Mutual,” Moholi said, dismissing a comment that the company’s directors were being reduced to spokespersons.
“The person who created the narrative that this is about Trevor is the same person who approved the payment, Moyo,” Tsengiwe said, in defence of the strategy to keep Manuel away from responding directly to the media.
“In my view I don’t think you will not get anything clearer from Trevor on the board dealings than what I am saying,” she said adding that had the interview been with Manuel, none of the information discussed would have been different.
Contacted for comment relating to the dividends pay out at NMT, Patel declined not to comment.