Old Mutual’s axed-but-reinstated CEO, Peter Moyo, has instituted a R20 million claim for reputational damages against the insurance group’s board members, including chairman Trevor Manuel, in their personal capacities.
If successful, Moyo’s claim and lawsuit could make corporate history and have serious implications for errant company directors across the country.
This is because courts in SA have usually made adverse findings against companies at a broad level instead of holding individual board members and non-executive directors personally liable for decisions they have taken on behalf of a company and shareholders.
Moyo’s R20 million reputational damages claim against Old Mutual’s non-executive directors (or board members) is in addition to the R230 million he is claiming for contractual damages against the insurance group for firing him on June 18, without subjecting him to a disciplinary process.
To recap: Moyo was fired following a “breakdown of trust” between him and the board. This prompted Moyo to sue Old Mutual for unfair dismissal. The high court in Johannesburg has twice ordered that he should be temporarily reinstated as CEO and blocked Old Mutual from appointing his successor.
In total, Moyo is claiming R250 million in damages from the insurer in the second leg of his lawsuit, wherein he also seeks to declare the non-executive directors, including Manuel, delinquent. Old Mutual spokesperson Tabby Tsengiwe said the insurance group will defend against Moyo’s claim “vigorously”.
Read more here: Why Peter Moyo pitched his damages claim at R250m
In 54-page court papers, Moyo has cited Manuel and 11 other non-executive directors – including, among others, Paul Baloyi, Steward van Graan, Peter de Beyer, Thys du Toit, Sizeka Magwentshu-Rensburg and Nosipho Molope – for his R20 million claim for damages to his reputation.
The court papers have already been issued to Old Mutual.
Moyo’s lawyers said the non-executive directors have made “various insulting and/or false remarks” about Moyo since he was fired including “casting aspersions about his professional integrity” and “falsely portraying him as dishonest and unethical”.
In firing him, Old Mutual accused Moyo of declaring ordinary share dividends — linked to NMT Capital — worth R105 million at the firm’s board meeting on July 4, 2018, which he chaired. NMT Capital is Moyo’s private company, which he co-founded in 2002 with business titans Sango Ntsaluba and Thabiso Tlelai. Old Mutual owns a 20% stake in NMT Capital. Of the total dividends declared (R105 million), Old Mutual said Moyo wrongfully pocketed dividends worth R30 million, while it wasn’t paid preference share dividends, breaching its rights as a shareholder.
In citing one “insulting” incident, Moyo’s lawyers said Old Mutual made “certain unwarranted racial, xenophobic and afro-phobic slurs” against him, thus violating his “right to dignity”.
In Old Mutual’s response to Moyo’s legal challenge of his dismissal, the insurance group questioned whether he enjoys Black Economic Empowerment status in SA because he was born in Zimbabwe and only acquired South African citizenship after April 1994.
Moyo’s lawyer Eric Mabuza said the lawsuit for damages could take two years to conclude, which might protract his client’s dispute with the insurer. Mabuza added that although the lawsuit might be protracted, Old Mutual would still be barred from appointing a permanent CEO, effectively Moyo’s successor.
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