After the Johannesburg High Court ruled on Tuesday that Old Mutual does not have to give axed CEO Peter Moyo his job back, its chair Trevor Manuel acknowledged that the past seven months had been “very difficult”.
“The judgment is very important for us and we can finally move forward,” he said.
The long-drawn-out war between Moyo and Old Mutual started last year, with Moyo being suspended in May and subsequently fired in June. Old Mutual accused him of wrongfully pocketing dividends worth R30 million linked to NMT Capital, an investment holding company co-founded and partly owned by Moyo in which Old Mutual holds a 20% stake.
The firm cited a breakdown of trust and conflict of interest related to a payout of dividends by NMT Capital.
Old Mutual claimed in its court papers that ordinary dividends were declared and paid to Moyo without sufficiently providing for and servicing Old Mutual’s preference shares as required, something Moyo disputes.
On July 30, the Johannesburg High Court ruled that Moyo should be temporarily reinstated as CEO, blocking Old Mutual from appointing his successor, but Old Mutual fired him for a second time in August. The court then dismissed the insurer’s application for a declaratory order seeking to prevent Moyo from getting his job back.
The court has now upheld the insurer’s appeal against Moyo, with costs.
“The positive indication in the market therefore indicates that the market does welcome the ruling and we hope it will continue,” Tsengiwe says.
Wayne McCurrie of FNB Wealth and Investments says the fact that Old Mutual’s share price increased indicates how it is bigger than an individual.
“The future of the company was never going to be decided by whoever is CEO,” he says.
McCurrie adds that the firm’s victory mitigates some of the bad PR Old Mutual received during the back-and-forth court battle.
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