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Following his surprise suspension hours before an AGM, Peter Moyo has hit back, saying he may take the giant insurer to court
Old Mutual faces accusations of investigating its chief executive, Peter Moyo, behind his back before serving him with a notice of suspension less than 24 hours before its annual general meeting (AGM).
Speaking to City Press hours after the company announced that it would be parting ways with him, Moyo said he found out “accidentally” last month that he was under investigation, adding that he had not been officially informed about this, nor was he given a report related to the probe.
“I thought they were looking at particular transactions. I did not know they were investigating me. I found out on April 30 by accident,” said Moyo.
He said he had only seen snippets of opinions, which Old Mutual had written about, expressing concern about a conflict of interest regarding Moyo.
Moyo said that although he was aware of the opposing views between him and the board over certain issues, he thought his axing was “most inappropriate” and the statement announcing the matter “badly written”.
“I have done absolutely nothing wrong,” he said.
Asked if he saw the end of his tenure at Old Mutual coming, Moyo said he preferred to reserve his response.
Read: Why did Old Mutual suspend CEO Peter Moyo
He said his negotiations with the company about how to part ways would inform a decision on whether to take the company to court or not.
“They say I am suspended until we have certain agreement. If they come up with something that makes sense regarding how we move forward, I will look at that. If it doesn’t, I always have my rights reserved.”
Old Mutual issued a statement on Friday morning announcing the immediate suspension of Moyo. Later that afternoon, following its AGM, it reiterated its reasons for parting ways with Moyo.
The board stated that it had decided to part ways with Moyo because of “a material breakdown of trust and confidence, which occurred due to the management of conflicts of interest in business relations with related parties” that existed before his appointment to Old Mutual.
The company further said the disclosed conflicts were considered to be manageable and were contractually regulated.
Moyo, one of the financial services sector’s most high-profile leaders, presided over Old Mutual’s return to South Africa, after almost two decades of having its primary listing in London. He was steering it to becoming a Pan-African company.
The news of his departure came as a shock to the market as he had been delivering solid results and executing the company’s vision, something that chair Trevor Manuel acknowledged on Friday
Responding to questions about their parting of ways, Old Mutual said Moyo was not fired but rather “suspended pending discussions on separation”.
“The decision follows ongoing engagements between Peter and the board about competing interests regulated in the chief executive’s contract of employment, which were disclosed in the Old Mutual Limited prelisting statement and the annual financial statements. Unfortunately, the board and Mr Moyo have disagreed materially on how the conflict of interest has been managed, resulting in a breakdown in the required mutual trust and confidence.”
Moyo is a founder and former CEO of investment holding company NMT Capital, which he declared when he joined Old Mutual.
Old Mutual denied that the matter arose from Moyo’s transparency relating to his role in NMT Capital. The company is the only institutional investor providing R277 million in preference share funding and R14 million in ordinary share funding.
However, when Moyo was appointed to Old Mutual in 2017, a formal protocol was implemented to deal with any conflicts of interest.
It formed part of his employment contract and excluded him from decisions related to NMT.
But a subcommittee, constituted by the board to deal with potential conflicts of interests, raised a number of concerns.
Moyo is listed as one of four directors of NMT Capital alongside Sango Ntsaluba, Thabiso Tlelai and Mobasheer Patel.
He said Old Mutual never had a problem with him as a shareholder in NMT Capital and there were never even talks of him exiting NMT.
Following Friday’s announcement, the company’s share price tumbled slightly above 5% and later recovered to 2.4%, but closed at a loss compared to its opening.
Sandile Zungu, president of the Black Business Council (BBC), said: “The suspension of Moyo, a very seasoned black executive, on the basis of alleged conflict of interest, creates a fundamental principle dilemma for the BBC. We want to jealously protect the black talent that operates in the top echelons of corporate South Africa and state-owned companies because they are under persistent attack.
“At the same time, we want black corporate leaders to uphold the highest standards when it comes to good corporate governance and ethical conduct because that is precisely what is expected of us in positions of leadership.
“We are none the wiser regarding the details underlying Moyo’s suspension, but we are pleased to note that they are neither due to operational nor performance matters. That notwithstanding, we plead for the speedy conclusion of the due disciplinary processes.”
Owen Nkomo, CEO of Inkunzi Wealth Group, said it was sad that the JSE was losing another black chief executive, and the fact that Old Mutual did not disclose the finer details of Moyo’s sins was not helping matters.
“Old Mutual is not saying what exactly Moyo did,” Nkomo said, adding that the company might have to look for a black executive in competing insurance companies.
Edgar Mafoko, economist and portfolio manager at FNB Wealth and Investments, said the announcement came as a surprise and “the shares underperformed on the day. For the market it is a bit of a disappointment to lose a black CEO on the JSE.
“The fact that he hasn’t been in the role for long also raises eyebrows,” he said.
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