Tehillah Niselow and Lameez Omarjee
Old Mutual and Peter Moyo go head to head at court today over whether Moyo can be reinstated as CEO with immediate effect pending an appeals process.
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ICYMI: 5 things you need to know about the Moyo judgment and how Old Mutual was ‘disingenuous’
1. Moyo raised concerns in good faith, Manuel ignored them
Judge Brian Mashile wrote that Moyo raised concerns with Old Mutual chairperson Trevor Manuel about apparent conflicts of interest in “good faith and for no personal gain” and Manuel ignored them and failed to act on them.
This relates to Manuel chairing both Old Mutual and Rothschild & Co in SA. The financial advisory company provided consultation services to Old Mutual when it delisted from the London Stock Exchange and listed on the JSE in June 2018. Rothschild stood to benefit from the transaction, the judge stated.
2. Moyo didn’t have the power to withhold payment to Old Mutual
The High Court found that NMT Capital, the company Moyo co-founded and has a 25% stake in, paid out R23m to Old Mutual in arrears as an institutional investor. And for the balance that was owed to the company, the plan was to extend the redemption period or repayment date, which the insurer had always agreed to in the past.
“[It is] inconceivable that he [Moyo] had the power to effect the declaration of the dividend resulting in the alleged conflict of interest,” the judgment read.
3. No conflict of interest raised
Mobasheer Patel was a director of both Old Mutual and NMT Capital at the time, looking after the two companies’ interests and he is a trained accountant with a good “understanding” of financial issues.
He never indicated there was a conflict of interest between Moyo and Old Mutual in paying out the dividends and he attended an NMT meeting in 2018 where there was a discussion of how the payments should be distributed, according to Judge Mashile’s ruling.
Moyo vs. Old Mutual: 5 reasons why the corporate warfare continues
Moyo and the country’s second largest insurer have different interpretations of the initial court ruling and have turned once again to the courts as the fight becomes increasingly acrimonious.
Here are 5 reasons why neither side is backing down, despite concerns about the impact of the uncertainty on investors.
1. Undue Haste
Moyo claims that the Old Mutual board meeting which decided to appeal the court judgment on July 30 was “unlawful and improperly constituted”. In his affidavit to the court submitted on Monday, Moyo describes that prior to the board meeting, he called the CFO, Casper Troskie, and informed him that it would be unlawful to hold a board meeting without extending an invitation for him to attend.
“Undue haste was intended, by hook or crook and even before any careful analysis of the judgment, simply to block my return to work as ordered by court,” Moyo states.
2. Contempt of Court
Moyo will ask the High Court to declare the Old Mutual directors in contempt of court for failing to reinstate him immediately after the July 30 ruling. “The Old mutual board was not permitted to ignore and fail to implement a court order, simply because it does not agree with it,” Moyo’s affidavit reads.