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South Africa: A Stay In or Out of Jail for Old Mutual Directors?

Cape Town — Old Mutual has pleaded with the High Court, saying the potential imprisonment of board members – if they are found guilty of contempt of court for not allowing ousted CEO Peter Moyo to return to work – would be “excessive and inappropriate”, according reports by Moneyweb.

This follows Moyo’s application at the High Court in Johannesburg to declare the insurance group’s 13-member board to be in contempt of court for blocking him from returning to his office three times.

But lets start at the beginning. Peter Moyo was re-hired by in June 2017 as CEO of Old Mutual Emerging Markets, and later of Old Mutual, having left in 2005 to take over at Alexander Forbes. The Old Mutual board were aware of his business interests, including his investment company NMT Capital in which Old Mutual holds a huge stake. In May 2019 before Old Mutual’s AGM, he was suspended for a “breakdown in trust” during NMT Capital’s 2018 financial year, after the Board demanded certain reports which revealed “discrepencies” in dividend payouts.

In June 2019, Moyo was fired as the board declared a “conflict of interest” with Moyo. He went to court in Part A, to have his dismissal declared unlawful, citing board chairman Trevor Manuel as being behind the move. The courts overturned the board’s decision and instructed Old Mutual to allow him to return to work. Moyo returned to the Sandton offices and was told  to leave the premises, with the insurer lodging an appeal on his reinstatement and issuing him with a second dismissal letter. Moyo’s lawyers said Old Mutual did not have enough reasons to fire their client and said the breakdown in the relationship between both parties was manufactured by the insurer. The judgment endorsed arguments submitted by Moyo’s lawyers that the reasons given by Old Mutual when it first dismissed and fired him were inconsistent.