While still engaged in a legal tussle with its former CEO Peter Moyo over his initial termination, Old Mutual's board announced on Thursday that it had served Moyo with a "further notice terminating his employment".
Moyo's lawyer, Eric Mabuza, said in response to the publication of the letter that Old Mutual was engaged in "a classic case of contempt of court".
In an open letter published on its website, the financial services provider said it took the step "after legal advice and on careful reflection by directors, with proper regard to their fiduciary duties to the company".
Moyo is currently challenging his initial notice of termination in court. Judgment in that case is expected at the end of August.
Old Mutual said on Thursday that Moyo may decide to challenge the second notice of termination too.
"We will stand our ground if he does, naturally and at all times continuing to respect the law and our court system," it said.
Moyo held an urgent meeting with his lawyer and counsel on Thursday to decide on a course of action.
“This is corporate madness, a classic case of contempt of court, it is worse than delinquency,” Moyo’s lawyer Eric Mabuza told Fin24 after the letter was published.
Mabuza asked why the company did not wait until the court ruling expected next week. He added that they will inform Judge Brian Mashile of the new contempt within the next 24 hours and they are currently working on the legal documents.
He said that in his view the directors of the financial services giant were protecting their own interests above those of shareholders.
“Somebody has to intervene to save them from self-destruction,” Mabuza added.
Moyo was initially suspended from Old Mutual in May and axed in June, as Old Mutual cited a breakdown in trust and a conflict of interest related to NMT Capital, a boutique investment firm he co-founded. Old Mutual is one of the shareholders in the company.
As Fin24 previously reported, he challenged his dismissal in court in late July and argued he was being victimised for pointing out Old Mutual chairperson Trevor Manuel’s conflict of interest.
However, he was barred from work the day after his court victory, as the country’s second-largest insurer filed a notice to appeal against the judgment.
*This article has been updated at 18:37pm on August 22, 2019.