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Peter Moyo puts new screws on Old Mutual’s board Peter Moyo puts new screws on Old Mutual’s board
Axed Old Mutual CEO Peter Moyo has launched a new offensive in his battle against SA’s second-largest insurer. This time, he wants the conduct... Peter Moyo puts new screws on Old Mutual’s board

Axed Old Mutual CEO Peter Moyo has launched a new offensive in his battle against SA’s second-largest insurer.

This time, he wants the conduct of Old Mutual to be censured by a high court over its failure to comply with a judgment on July 30 that immediately reinstated him as CEO and blocked the insurer from taking steps to appoint his successor.

In what is now definitely a nasty battle between the two parties, Moyo has asked the high court in Johannesburg for an order to declare the conduct of Old Mutual and its board of directors to be in contempt of court. A contempt of court offence relates to being disobedient or disrespectful towards a court of law regarding its judgments/orders.

Read: Moyo wants the entire Old Mutual board to be purged

To recap, Moyo was reinstated to his top job by a high court judgment as it found that Old Mutual had not followed proper processes when it initially suspended him on May 23 and subsequently fired him on June 18.

Old Mutual is appealing the judgment, saying the appeal process means that the insurer doesn’t have to comply with the judgment.

In other words, Moyo cannot resume or return to his office at Old Mutual’s headquarters in Sandton until a court decides on its appeal.

In court papers dated August 12, Moyo states that the fact that he wasn’t allowed by Old Mutual to resume his duties means that the insurer is in contempt of a court judgment.

‘Self-help, anarchy’

“The Old Mutual board was not permitted to ignore and fail to implement a court order simply because it does not agree therewith or because it is uncomfortable with such implication,” said Moyo in court papers. “Such behaviour amounts to self-help, anarchy, and unlawfulness.”

He said Old Mutual’s conduct in opting to “willy-nilly ignore a court order” undermines the dignity of the court and contravenes section 167 (5) of the Constitution, which provides that “an order or decision by a court binds all persons to whom it applies”.

Moyo’s court papers are in response to Old Mutual’s court application to seek a declaratory order under section 18 of the Superior Courts Act regarding what should happen pending the hearing of the appeal. This is set to be heard on August 16 by the high court.

Moyo wants jail time for directors

If the high court finds members of Old Mutual’s board to be in contempt of court, they might face hefty fines or imprisonment. The latter is what Moyo is pushing for, adding that the board needs to show, within 30 days, why it should not be committed to imprisonment for six months or a period determined by the court.

This intensifies the relief that Moyo wants against Old Mutual board members. In a separate legal challenge, he wants them to be declared delinquent directors under Section 162 of the Companies Act, which would result in the entire Old Mutual board being purged. Moyo wants this delinquency order because he believes the board handled his sacking sloppily.

When Old Mutual initially suspended Moyo, it cited a breakdown of trust and confidence between both parties. The insurer later said there was a conflict of interest due to Moyo’s involvement with investment holding firm NMT Capital, which Moyo co-founded in 2002. Old Mutual is the only institutional shareholder in NMT, owning a 20% stake in the firm.

When Old Mutual eventually fired Moyo, it said he wrongly pocketed dividends worth about R30 million.

This while preference share dividends to Old Mutual were in arrears, which the insurer said was in breach of its rights as a shareholder.

“Old Mutual’s insistence on repeating its narrative that I am guilty of a conflict of interest in relation to my NMT shareholding, which is the source of the harm to my reputation and dignity and which was prima facie found by the [high] court to have been a smokescreen to hide the true reasons for my victimisation, is the single biggest evidence of their contempt for the finding of this court,” he said in court papers.

Peace proposal

Moyo is also vexed that Old Mutual board members have conducted media interviews since the judgment to reinstate him as CEO was issued.

“In every interview since the judgment, Old Mutual has insisted on painting itself as innocent and me as a violator of the principles of corporate governance, when the finding of the court is to the exact contrary. Continuing to heap blame on me is an act of wilful blindness to the prima facie findings of the court.”

In resolving the dispute, Moyo proposed that Old Mutual withdraw its declaratory order application, which would pave the way for the insurer to pursue its appeal of the high court judgment. The parties would then agree to an expedited court hearing, as soon as September 10, for an order to declare all board members delinquent. During this process, Moyo would not go back to work as he would take special leave with full remuneration benefits. However, he still wanted to be reinstated as CEO during this process.

Old Mutual rejected the proposal as it doesn’t want him back.

Source: Moneyweb

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