Old Mutual’s on and off again CEO Peter Moyo was reinstated a week and a half ago by the Gauteng High Court in Johannesburg but he is yet to take up the reins again as he and the company’s legal team clash over what exactly the judgment means.
There appears to be no end to the uncertainty investors face and the share price of the JSE-listed financial services firm has plunged 12.7% since he was suspended on May 24, hours before the annual general meeting. It closed at R18.40 on Thursday, August 8.
Moyo was axed in June, with Old Mutual citing conflict of interest and a breakdown in trust. Moyo has in turn argued that the claims against him were "artificially manufactured" and that his "deteriorating" relationship with Old Mutual chairman Trevor Manuel was central to his dismissal. In his papers, Moyo also argued that no disciplinary hearing had taken place prior to his dismissal.
Judge Brian Mashile ruled on June 30 that Moyo should be immediately reinstated as CEO, pending Part B of his application and barred the company from appointing an interim head. The company later announced it would appeal the ruling, saying that this therefore meant that the judge's order pertaining to Moyo's reinstatement was suspended. Moyo's legal representation disputes this, however, saying the order stands. Old Mutual has since taken the impasse back to the court for a declaratory order on the matter.
A day after the ruling, Moyo reported for work at Old Mutual’s Sandton office but talks between the respective legal teams broke down. The company insists the order is final and the notice to appeal suspends the court order. Moyo and his lawyer however maintain the judge handed down an interim ruling which must be upheld despite an appeals process.
'CEO impugned board's integrity'
In court papers filed on August 1, Old Mutual approached the high court for the urgent declaratory order to either find Judge Mashile’s ruling as final - which would suspend his directives - or suspend the implementation of his directives citing “exceptional circumstances”.
“If executed, [the orders] will reinstate a CEO who has explicitly impugned the integrity of the company’s board of directors who detected them as delinquent and has indicated his intention to have them removed from office on that basis,” said head of legal for Old Mutual Craig Mcleod in an affidavit.
Mcleod added there is an untenable working relationship with Moyo which will result in volatility in the listed financial services company that has over 30 000 employees and operates in 13 countries across Africa and China.
“It is simply not an option to continue to risk the company’s stability over a dispute with an individual employee. This amounts to exceptional circumstances and shows the applicants will suffer irrevocable prejudice if Mashile's orders are executed now,” Mcleod stated.
The company’s affidavit expressed concern that Moyo’s reinstatement pending Part B of his application - in which he asks the courts for all the non-executive directors to be declared delinquent, according to the Companies Act - could take several years to finalise and he will in effect be permanently at the helm until the end of his contract in some four years.
Old Mutual requested the matter be heard by the high court on August 13, however, company spokesperson Tabby Tsengiwe said the date has not yet been determined.
No golden handshake
Moyo’s lawyer Eric Mabuza says they will oppose the application for a declaratory order and they will file their papers this week.
Meanwhile, Business Day reported on Thursday that the Old Mutual board has “struck a conciliatory tone” and it was perhaps time for a negotiated settlement.
Tsengiwe told Fin24 that a “settlement should not be interpreted as a 'golden handshake'”.
Moyo was paid six months' salary after he was sacked in June, as part of his contract. In 2018, Moyo earned a total of R35.5m, including bonuses and share options.
Tsengiwe said that from their original statement about the CEO’s suspension on May 24th, Old Mutual has “always sought an amicable separation” and Moyo took the issue to the courts.
Meanwhile Moyo told Fin24 that nobody from Old Mutual had contacted him about a possible settlement and they "know where to find us".
Tsengiwe said the insurer has “never not been open to talking to Moyo”.
Fin24 previously reported that institutional shareholders such as Ashburton Investments are hoping for a resolution out of court and an end to the uncertainty over the CEO position.