Old Mutual directors headed towards a tragedy of their own making

When Old Mutual’s board of directors decided to terminate Peter Moyo’s contract, they didn’t seem to have a plan for what would come next

Let’s imagine for a moment a hypothetical scenario in which Old Mutual’s directors stick to their current decision to close ranks behind erratic board chairperson Trevor Manuel until, in the end, they are found in contempt of Johannesburg High Court Judge Brian Mashile’s orders and are declared delinquent directors in terms of the provisions of the Companies Act.

Such an endgame, now highly probable, would be a tragedy, but a tragedy of their own making.

And this is troubling in the extreme.

Let me explain.

When they made the decision to terminate the employment contract of embattled chief executive Peter Moyo, the Old Mutual board of directors didn’t articulate, never mind seem to have devised, a “day after” strategy.

If there ever was a strategy, theirs seems to have been to mount lawfare against Moyo until he ran out of funds for litigation, or his desire to fight petered out and died (pun unintended).

This was inadvertently disclosed by Manuel during a media conference in which he declared: “He [Moyo] will run out of money.”

Read: Old Mutual must explain decision not to reinstate Moyo, judge rules

In this scenario, the Old Mutual board would then vote on a managed separation package for Moyo, and the rest of the directors would continue to support a self-serving chairperson.

Sadly, Old Mutual’s Manuel-inspired Moyo gambit looks likely to backfire.

Faced with a resolute protagonist in Moyo and a litany of adverse court findings, Manuel, with the backing of a seemingly pliant Old Mutual board, ill-advisedly elected to double down with sheer petulance and unbridled arrogance, hoping that this would put pressure on Moyo and intimidate the judiciary.

The conflict that ensued, which could easily have been resolved had Manuel followed the procedure spelt out in the protocol designed to manage Moyo’s conflicts of interest, has now reached a point of no return with incalculable and hitherto unimaginable consequences for Old Mutual’s directors.

Sun Tzu, the celebrated 6th century Chinese military strategist and author of the Art of War, counselled that, in a conflict, one side is never in complete control and your enemy gets to vote, too.

Most importantly, he advises warring parties to “know your enemy”.

Moyo’s contract of employment at Old Mutual vested complete control and management of his known conflicts of interest into Manuel’s hands.

It appears that, when discord arose between Manuel and Moyo over the latter’s disquiet about Manuel’s irregular use of Old Mutual’s financial resources to settle personal litigation costs, Moyo instantly became Manuel’s enemy.

But Manuel’s poor judgement on who his real enemies were didn’t end there.

A bewildered audience at the recent media conference hosted by Manuel witnessed a sitting judge and Old Mutual minority shareholders, wittingly or unwittingly, being depicted as Manuel’s enemies.

And, although Manuel has since been compelled to apologise for denigrating Mashile – who has found against Old Mutual twice in the Moyo matter – it is clear that judicial censure of Manuel over his abhorrent conduct beckons.

And rightly so.

Ours is a world in which politicians, notably EFF leader Julius Malema, habitually harangue and denigrate the judiciary.

Manuel’s conduct and attitude towards Mashile is not behaviour expected of a venerated former government minister and chairperson of one of the largest companies in the country.

It should be noted that Manuel’s disparaging comments about Mashile, including the flagrant defiance of a court order, reinforce an assertion that Old Mutual operates in a dual moral and legal universe.

We are a nation governed by the rule of law. Manuel and Old Mutual’s conduct make it difficult to appeal to ordinary members of the public to obey the laws and rules of the land.

That Manuel was appointed by President Cyril Ramaphosa to take on the responsibility of luring foreign direct investment to South Africa doesn’t bode well for the country because potential investors may – rightly – wonder if companies led by politically connected individuals enjoy special treatment when it comes to breaking the law.

The point is, had Mashile confirmed Moyo’s dismissal and Moyo ill-advisedly elected to force his way into Old Mutual’s offices, he would have been arrested on the spot and charged with trespassing.

Contempt of court findings against Moyo would then be justified.

This is precisely what underpins Moyo’s application for the courts to find Old Mutual’s directors’ conduct and continuous violations of a competent court order legally contemptible.

It is clear that Manuel failed to take nuggets of wisdom from Tzu. Nor has he learnt from our political forebears.

Manuel and Old Mutual have failed to demonstrate the values and principles imbued in us by Nelson Mandela, who defended his political actions in court when apartheid apologist Louis Luyt attempted to have a commission of inquiry into sport set aside as unconstitutional.

Poor judgement and the flagrant violation of court orders by Old Mutual has riled the public.

The idea that a single individual who doesn’t even “happen to wear a robe”, and who is masquerading as a legal and corporate governance czar, would use the power of his office to try to bully people, including a sitting judge, into seeing the world through his prism is exactly the kind of public arrogance our forebears eschewed.

Old Mutual’s continued business success and South Africa’s economic prosperity are intertwined.

However, this success is only possible with leaders who know when to start battles and, by inference, make enemies; and leaders who don’t abuse their privileged positions to pursue vexatious litigation using public funds.

The time for imagining has come and gone. Individual members of the board of Old Mutual have been summoned to explain to the court why they shouldn’t each be held in contempt of court.

They risk flushing their impeccable careers, credentials and social standing down the drain.

It gives me no joy that adverse findings on the character of Old Mutual’s directors seem all but guaranteed, all because they kowtowed to a leader who is reckless, mercurial and proud.

That these esteemed individuals are wont to hitch their fate to Manuel’s is perplexing.

We all have a moral responsibility to protect our Constitution, the rule of law, good corporate governance and behaviour.

Manuel doesn’t seem to understand this duty.

Manuel betrayed not only his fellow directors who seem to steadfastly believe in him, despite his poverty of judgement and humility, but also a society that holds him in high esteem.

By failing to act against Manuel, the board and shareholders are complicit in the ensuing haemorrhage of values and lawlessness in our society.

And an incalculable price could be paid by all.

Khaas is a businessperson, and founder and convenor of Public Interest SA, a public benefit organisation that protects and advances constitutionalism

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