As Old Mutual battle goes to court, Moyo drags Rothschild’s Kingston into the fray

Ahead of Peter Moyo’s appearance in court on Tuesday in his efforts to be reinstated as Old Mutual CEO and have his axing declared unlawful, he has dragged the executive chairman of Rothschild & Co Martin Kingston into his messy battle against the insurer.

Until now, Moyo – who was suspended on May 23 on the grounds of “a material breakdown in the relationship of trust and confidence” and was dismissed on June 18 – has aimed his lawsuit at Old Mutual and its board chair Trevor Manuel.

Moyo says the insurer fired him without following proper disciplinary processes. He has also accused Manuel of having a “triple conflict of interest” in overseeing Old Mutual’s separation of the South African business from its UK operations.

This was because Manuel was chair of Old Mutual Group SA, Old Mutual plc and advisory firm Rothschild & Co during the insurer’s managed separation, which saw it move its primary listing from the London Stock Exchange to the JSE in 2018.

Moyo alleged that a proposal to transfer a R5 billion contingent liability from Old Mutual plc to what is known today as Old Mutual Limited – a key aspect of the managed separation – was at the heart of Manuel’s conflict of interest.

Rothschild stood to gain, and did

Rothschild & Co was one of the advisors on the managed separation and “stood to gain [and eventually did gain] hundreds of millions of rands in fees”. Moyo believes that Manuel should have recused himself from the managed separation transaction.

In his supplementary affidavit to the high court on Monday, Moyo said he raised his concerns about Manuel’s alleged conflict of interest with Rothschild’s Kingston on a particular Sunday at Old Mutual’s offices in Sandton, Johannesburg.

During this discussion, Moyo told Kingston that Manuel should not participate in discussions about the R5 billion contingent liability given his alleged “triple conflict of interest”.

“Mr Kingston, like Mr Manuel, held a different view. I suspect that it was Mr Kingston who precognised Mr Manuel about my stance,” said Moyo in his court papers.

Moyo subsequently raised his concerns with Manuel and escalated the matter to the Old Mutual board’s corporate governance and nomination committee. “All hell broke loose,” said Moyo, who added that his relationship with Manuel became adversarial.

Moyo said he will secure an affidavit from Kingston to corroborate his version of events. If necessary, Moyo will “ensure” that Kingston is subpoenaed. Kingston was not immediately available to comment when Moneyweb reached out to him.

Old Mutual’s version

In its affidavit that responds to Moyo’s court bid, Old Mutual said it finds his allegations “astonishing” because Moyo – while he was CEO – was “fully aware” that all concerns regarding Manuel’s potential conflicts of interest were “carefully considered through proper governance structures”. The insurer said Moyo was involved in board processes that approved and supported the R5 billion contingent liability.

Old Mutual said Manuel’s relationship with Rothschild began before he joined the insurer’s board. And Rothschild’s mandate to advise Old Mutual on the managed separation process “predated the board chair [Manuel] joining the Old Mutual board”.

Moyo’s lawsuit will be heard by the High Court in Johannesburg on Tuesday. He wants to be temporarily reinstated as CEO and is claiming damages. In a bold move, he also wants the court to declare Old Mutual’s non-executive directors and Manuel delinquent.

Moyo was fired over a conflict of interest involving dividends that were paid by his investment holding firm NMT Capital.

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