The public nature of the dispute between Old Mutual Limited (Old Mutual) and the
former CEO, Peter Moyo, is unfortunate. The Board of Directors acknowledges the
events of recent months have had an adverse impact on the company and all its
stakeholders. At a time when trust in institutions and their leaders is low, public feuding
at a leading financial services company does little to reassure South Africans that
our economy is in good hands. We regret this state of affairs and commit to a speedy
resolution of this dispute.
Nonetheless, it is critical to remind our stakeholders that this situation first arose
because the former CEO violated the terms of his employment contract by placing
his private financial interests ahead of the company. In flagrant disregard of provisions
in his employment contract designed to manage conflicts of interest between NMT
Capital (a company he co-founded) and Old Mutual, Mr Moyo chaired a meeting of
the NMT Capital Board on 4 July 2018, at which it was decided to pay an ordinary
dividend of R105 million. Mr Moyo and his partners thus shared R84m, while omitting to
pay preference share dividends, valued at R65.4m at the time, due to Old Mutual.
The Board engaged Mr Moyo for months about this matter. However, it became clear
that he and the Board had a difference of opinion about his transgressions and how
to resolve them. Following the exchange of various correspondence and a meeting
where Mr Moyo was given yet another chance to address the situation, the Board, on
the basis of legal advice, reached the difficult conclusion that his continued
employment was untenable.
As one of the country’s largest fund managers, Old Mutual’s corporate
governance and management of related party conflicts should be above
reproach. The former CEO’s actions significantly undermined this.
Regrettably, Mr Moyo’s unprofessionalism persists. He has effectively admitted that
the relationship with Old Mutual has irretrievably broken down and he is not
answerable to the Board. It is difficult to see how he then believes he should resume
his duties as CEO, even as the company has instituted an appeal of the original High
Court finding, which will now be heard by the full bench of three High Court judges.
To safeguard Old Mutual’s interests in light of Mr Moyo’s challenge to the termination
of his employment, we gave notice a second time. As matters stand there is no legal
finding against this second notice.
The public spectacle Mr Moyo manufactures in his demand to resume his duties
suggests that he continues to place his interests ahead of those of Old Mutual and its
stakeholders. This lack of regard for the company’s interests created the Board’s loss
of confidence in the first place. Since the initial judgment, we have obtained
additional legal advice, including from attorneys and independent senior counsel, i.e.
independently from the initial team. While we cannot prejudge the outcome of our
appeal, and the other cases related to this matter, we have acted on careful legal
advice at all times and are confident that our decisions will ultimately serve the best
interests of the company.
Meanwhile, interim CEO Iain Williamson, a veteran at Old Mutual of 26 years standing,
is doing a sterling job, and operationally the business continues uninterrupted.
Once more, the Board would like to assure our customers, staff, investors and other
stakeholders that it will do everything within its power to resolve this matter speedily
and in the best interest of the company. As one of the country’s leading manager of
collective investments, we must balance this commitment against our duty to the
country’s corporate governance framework.
View all material related to the court case.