High court rules in favour of Old Mutual board in Moyo matter
Old Mutual ‘pleased to put matter behind [it] after three years of contentious litigation’.
Axed Old Mutual CEO Peter Moyo. Image: Moneyweb
The Gauteng Local Division of the High Court on Monday dismissed, with costs, former Old Mutual CEO Peter Moyo’s application to have Old Mutual non-executive directors declared delinquent and in contempt of court.
The decision, made by Honourable Justices Raulinga, Twala and Opperman, is based on hearings that took place in November 2021.
According to a statement issued by the insurer, the court concluded that the directors did not breach their duties to the company.
“On the contrary, once the relationship between the board and Mr Moyo had broken down, the board was not only entitled but obliged to terminate his appointment,” it says.
Meanwhile, the court found Moyo guilty of breaching his fiduciary duties to the insurance company.
Moyo was suspended with immediate effect in May 2019.
According to the insurance company, Moyo was given a notice of termination on 17 June 2019, following a report on Moyo’s related-party transactions, after various concerns emerged regarding his conduct relating to conflicting interests.
This includes two declarations of ordinary dividends by investment company NMT Capital totalling R115 million in 2018. Moyo, who is founder and former CEO of NMT, was found to have benefitted to the tune of R30.6 million.
According to Old Mutual, Moyo and his partners shared R84 million, while omitting to pay preference share dividends – valued at R65.4 million at the time – that were due to the insurance company.
“The board terminated Mr Moyo’s contract only after it had concluded, in good faith and on reasonable grounds, that he had been guilty of egregious misconduct and could no longer be trusted to serve the best interests of Old Mutual,” says the insurer.
The judgment follows a decision on 31 January dismissing a damages case brought against Old Mutual by Moyo.
The company says the application was made by Moyo following Old Mutual declining his services after an initial court order reinstated him on an interim basis pending the conclusion of his legal proceedings against the company on 30 July 2019.
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The court found that Old Mutual did not defy the initial court order by preventing Moyo from resuming his position as CEO. The court also found that Moyo’s employment was lawfully terminated the second time.
According to the company, the court found that Moyo failed to produce evidence showing Old Mutual’s wrongful connection to the termination of his employment.
Old Mutual and Moyo litigation timeline
|May 24, 2019||Old board suspends Moyo as CEO with immediate effect.|
|June 17, 2019||Moyo given notice of termination of employment.|
|July 30, 2019||High Court grants Moyo temporary reinstatement following dismissal in June. Old Mutual applies for leave to appeal.|
|August 2, 2019||Old Mutual files urgent application in the High Court for a declaratory order confirming its appeal process, with the court order that reinstated Moyo subsequently suspended.|
|August 21, 2019||Old Mutual gives Moyo another notice of termination of employment.|
|September 6, 2019||Old Mutual granted leave to appeal against Moyo’s reinstatement|
|January 14, 2020||South Gauteng High Court grants, with costs, Old Mutual’s appeal against the temporary reinstatement order.|
|March 17, 2020||The Johannesburg High Court dismisses Moyo’s application for an interdict prohibiting the hiring of a permanent CEO.|
|March 23, 2020||Supreme Court of Appeal dismisses, with costs, Moyo’s application for leave to appeal the January 14 judgment.|
|January 31, 2022||Gauteng Local Division of the High Court dismisses Moyo’s damages case.|
|May 16, 2022||Gauteng Local Division of the High Court dismisses, with costs, Moyo’s consolidated applications to have Old Mutual’s non-executive directors declared delinquent and in contempt of court.|
Old Mutual says it is “pleased to put this matter behind [it] after three years of contentious litigation and will be focusing on growing the business well into the future, with good governance at all times”.
This article first appeared on Moneyweb and was republished with permission. Read the original article here.