Old Mutual has filed an application for leave to appeal against the court order granted in the case brought by its former, chief executive, Peter Moyo.
The Johannesburg High Court ruled on Tuesday (30 July), that Old Mutual acted unlawfully when dismissing Moyo, while also blocking the business from continuing a process of finding a replacement.
The court also ordered Old Mutual to pay Moyo’s legal costs.
The insurer said in a statement on Wednesday (31 July), that it sent the signed notice of appeal to Mr Moyo’s lawyers last night (Tuesday, 30 July), together with an instruction that, as a result of the appeal process, “Mr Moyo is not permitted nor required to report for work”.
The group said that it filed the appeal in the High Court in Johannesburg. “Mr Moyo will not be returning to office until the appeal process has been completed. It is very clear that there has been an irreparable breakdown in trust and confidence, and that any future working relationship is untenable,” it said.
Old Mutual said that its legal team met with Moyo and his legal team to explain Old Mutual’s approach.
“Following these discussions and on the advice of two Senior Counsel, Old Mutual is comfortable with the position it has adopted on the impact of the application for leave to appeal. It is clear either party can approach the court for appropriate relief. There will be no further meeting between the legal teams today,” it said.
Moyo was suspended by the Old Mutual 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 at the time.
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.
Moyo told Reuters however, that he was suspended after a disagreement over how the company should engage with an investment firm he founded.
He said that his suspension related to ‘how different parties thought Old Mutual should engage with NMT Capital, which he founded and in which an Old Mutual subsidiary is an investor.
“That relationship has always been there from the day I started and it was properly disclosed,” he told Reuters by phone, emphasising the suspension was the result of differences on the approach to engagement rather than the relationship itself.
“There is actually absolutely no wrongdoing on my part,” he said.
In its statement on Wednesday, Old Mutual said it has maintained throughout that it believes it made the right decision to terminate Mr Moyo’s employment when the conflict of interest over NMT Group became unmanageable. “Old Mutual re-iterates that its board can and should hold the chief executive to a high standard. This requirement is both implicit and explicit in the employment contract.
“Old Mutual is confident it will be successful on appeal and that another court will come to a different conclusion. Until then the business continues as usual under the stewardship of the highly experienced Iain Williamson as interim CEO and a strong and competent leadership team,” it said.
The insurer called for stakeholders not to be distracted by the ongoing court proceedings, adding that it is not affecting the business from an operational perspective.
“Old Mutual continues to execute its strategy, underpinned by strong corporate governance,” it said.