Former CEO’s alleged victimisation and chair’s recusal dominate hearings
Old Mutual chairperson Trevor Manuel is alleged to have recused himself from an item that was up for discussion during a March 2018 board meeting, citing a possible conflict of interest – but he remained in the room while the board discussed the matter.
The item on the agenda related to the Old Mutual multibillion-rand managed separation transaction. Rothschild & Co stood to benefit from the transaction as advisers to Old Mutual.
The matter was allegedly discussed while Manuel, who is also the chairperson of Rothschild, was in the room at the time.
If proven in court, the matter may have devastating consequences for the company and may tilt the scale in favour of the company’s axed CEO, Peter Moyo.
Arguing on behalf of Moyo in the David and Goliath court case, advocate Dali Mpofu told the Johannesburg High Court this week that Manuel recused himself from the item but did not leave the room.
“When a big issue like this, of a contract that involves R5 billion, is discussed, the man is there in the room,” said Mpofu, who added that the company was clear about what should be done when a director had to recuse himself as this had been set out in detail in Moyo’s contract terms.
“Our submission is that what’s good for the goose is good for the gander,” Mpofu said.
“It cannot be that there is something called a recusal where you just sit and watch over everybody else, which is something that he (Manuel) has also been previously accused of,” Mpofu said.
But advocate Ngwako Maenetje, representing Old Mutual, refuted Mpofu’s allegations.
He said that Manuel had left the room and was willing to submit an affidavit to that effect.
Moyo took Old Mutual to court after he was suspended in May, and was subsequently fired.
In his court papers, Moyo claims that Manuel had an axe to grind with him after he raised an objection about nondisclosure on the company’s part.
This related to Old Mutual having settled Manuel’s legal fees earlier this year with regard to a matter “relating to the Guptas and their associates”, which had nothing to do with the company.
In court this week, Mpofu alleged that Moyo had raised the matter of nondisclosure of the legal fees first with Manuel, and later with a board subcommittee. But, he said, Manuel did not take kindly to this and had set out to oust Moyo from that point on.
After having raised the matter with Manuel, Mpofu added, Moyo was dissuaded from pursuing it further – and when he did, battle lines were drawn.
He said Moyo did not dispute whether the decision to pay Manuel’s legal fees was right or not, but was rather concerned about the lack of proper disclosure around it, given that it was supposed to be disclosed as remuneration to shareholders.
Moyo also claimed that one of the Old Mutual directors had told him that Manuel was hell-bent on ousting him.
“The real reason is to victimise Mr Moyo, and one of the directors has told him that the chairperson (Manuel) was gunning for him,” Mpofu said.
Mpofu did not disclose the identity of the director.
Sacked Old Mutual CEO Peter Moyo
In his presentation, Maenetje accused Moyo of conflict of interest related to his dealings with NMT Capital, an investment company which Moyo co-founded in 2002 and of which he is still a director.
Old Mutual has a 20% shareholding in NMT.
During the first day of this week’s two-day hearing, Judge Brian Mashile suggested that both parties consider an option that would see Moyo being reinstated but surrendering one aspect of the relief he was seeking: namely, having the Old Mutual directors declared delinquent.
After a brief adjournment, the parties returned to court and told Mashile that they had rejected his proposal.
In suspending Moyo, Old Mutual had cited concerns relating to conflict of interest. But in dismissing Moyo, it cited different grounds, related to financial misconduct and to his contract.
Moyo’s legal team took issue with this, accusing the company of chopping and changing reasons for his dismissal, and claiming that the real, underlying issue for his ousting was “victimisation”.
Arguing in the half-full courtroom, Mpofu went on to say that Moyo’s reputation was in tatters because of the allegations that the company had published relating to his suspension and subsequent axing.
In arguing for Old Mutual’s nonexecutive directors to be declared delinquent, Mpofu said they had failed in their fiduciary duties to the company and were responsible for the company losing millions of rands, after the share price dipped when the news broke about Moyo’s suspension.
Arguing against the company’s assertion that the relationship between Moyo and the employer had already broken down, Mpofu’s counterpart Tembeka Ngcukaitobi said this was no reason not to reinstate his client as he was an executive and did not work on a daily basis with the board.
Moyo was also accused by the company of granting media interviews against company policy when he was suspended, a matter Moyo’s lawyers dismissed. They argued that he was merely answering media calls and setting the record straight, after the company had released its own media statement.
After hearing the representation over two days, Mashile reserved judgment, saying he would deliver his ruling within seven days.