Old Mutual’s Board has confirmed that the employment contract of suspended chief executive officer (CEO) Peter Moyo has been terminated.
The company has appointed chief operating officer, Iain Williamson, as interim CEO.
Moyo was suspended by the board on 23 May after it concluded that there had been a material breakdown in trust and confidence.
This followed prior engagements with Moyo over concerns about how a conflict of interest had been managed in relation to his investments in the NMT group of companies.
“There is a duty on directors of all institutions to be vigilant regarding the management of conflicts of interest. The importance of this duty has been highlighted by a number of recent corporate governance breakdowns within both the private and public sector,” said Old Mutual’s chairman Trevor Manuel.
Old Mutual said that while Moyo’s conflicting interest was declared upon his employment and was governed by a specific protocol to regulate the conflict of interest, ‘the board has not been provided with an acceptable explanation’ for the declaration of ordinary dividends by NMT Capital during 2018 in the amount of R115 million, with a resultant benefit to Moyo of R30.6 million, in breach of Old Mutual’s rights as preference shareholder.
It noted that these issues came to the attention of a sub-committee of independent directors, the Related Party Transaction Committee (RPTC) during February 2019.
The RPTC, in turn, reported to the OML Corporate Governance and Nomination Committee (NomCom) in March 2019. This was followed by various engagements with Moyo personally.
The board held two meetings during May 2019 to consider these matters and came to the conclusion that there was a material breakdown in trust and confidence in Moyo.
“The board confirms that the contract of employment of Moyo has now been terminated, and Iain Williamson will continue to act as CEO for Old Mutual until further announcements are made on the appointment of a permanent CEO.”
“The interests of all our stakeholders have been paramount throughout this process and Old Mutual’s business operations on the ground remain unaffected. The company indeed continues to make solid progress in meeting its targets through continued management focus and an unrelenting commitment to putting our customers first,” said Williamson.
Old Mutual said that the process to appoint a new CEO is a matter of priority and will follow appropriate recruitment policies and the requisite board approvals for a position of this importance.