The Gauteng High Court on Tuesday (30 July) ruled that axed Old Mutual chief executive officer, Peter Moyo, be temporarily reinstated, declaring his dismissal as unlawful.
The court also ordered Old Mutual to pay Moyo’s legal costs.
The judge also blocked the insurer from taking steps to replace Moyo in the meantime, Reuters reported.
In June, Old Mutual’s board confirmed that the employment contract of then suspended CEO, Moyo had been terminated.
The company 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 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.