By Roxanne Henderson
(Bloomberg) – A South African court ordered Old Mutual Ltd. to temporarily reinstate fired Chief Executive Officer Peter Moyo pending a hearing into whether the board allegedly failed in its duties when dismissing him.
The insurer was also interdicted from taking steps to appoint a new CEO in a ruling delivered in the Johannesburg High Court on Tuesday. Moyo’s suspension and dismissal were unlawful, the court found.
The 174-year-old insurer fired Moyo in June after relations between the 56-year-old, Chairman Trevor Manuel and other board members soured amid allegations and counter accusations of conflicts of interest. The dispute centred around investment firm NMT Capital, which was founded by Moyo and two others in 2002, and the declaration of dividends even though Old Mutual was owed payments.
“I am back,” Moyo told reporters after the ruling, adding that he will report to the office at 8am on Wednesday. “The important thing to understand is that we need to go back and rebuild Old Mutual.”
Shares in Old Mutual extended their decline after the ruling, falling as much as 5% in Johannesburg to the lowest level since June last year, when the company moved its primary listing back to the city’s stock exchange.
Moyo said he respected Manuel as the chairman of the company and will continue to work with him. That represents a change of tone shown in the buildup to the court hearing, when Moyo accused the former finance minister of bullying the board into firing him, which Old Mutual denied.
The insurer had bought 20% of NMT as part of its efforts to redress racial inequality during apartheid. Moyo has said in court papers that Old Mutual had a director on NMT’s board, who raised no objections to the declaration of the dividends.
Moyo’s legal team will now proceed with the second part of his application to have Old Mutual’s board declared delinquent directors. The company has said that Moyo’s allegations against the directors are “scurrilous and are deeply disrespectful of the experienced women and men of high integrity who make up the board.”
