Old Mutual blocks CEO Peter Moyo from returning to work (again)

By Roxanne Henderson

(Bloomberg) – As Peter Moyo hung around Old Mutual Ltd.’s headquarters in Johannesburg getting a coffee, a staffer came up to him, hugged the on-and-off again chief executive officer, and said how good it is to see him. The insurer’s board members weren’t as welcoming.

It was deja vu as Moyo, 56, dressed in a blue suit with a grey and white tie and accompanied by his wife, went back into a boardroom to wait and see whether he can report for duty – mirroring events almost six weeks earlier.

The 174-year-old company and its CEO are locked in a messy legal battle since his suspension in May and dismissal in June amid allegations and counter-accusations of corporate-governance failures.

The company is preparing a court application which Moyo will “vigorously” oppose, his lawyer Eric Mabuza told reporters at Old Mutual’s offices. Moyo will study the application before deciding whether he will try to report for work again on Tuesday, he said as he prepared to leave the firm’s offices.

After ruling on July 30 that the firing was unlawful and that he can return to work, Moyo was sent home the next day as Old Mutual appealed the judgment. The Johannesburg High Court Friday dismissed Old Mutual’s bid to block Moyo from working, while allowing the insurer leave to appeal the initial judgment.

On Aug. 21, Old Mutual gave Moyo further notice of termination, which still stands as the validity of this letter hasn’t yet been heard in court, the company said in an emailed statement. Old Mutual, which has businesses spanning asset management to private equity across 12 African countries, is confident another court will come to a different conclusion on the first judgment, it said.

The spat is among the nastiest bust-ups in recent South African listed-corporate history and has pitted Moyo against Old Mutual Chairman Trevor Manuel, the country’s former finance minister. With neither one ready to back down, Old Mutual’s share price has suffered, falling more than 11% since the CEO was first suspended, compared with a 4% decline in the five-member FTSE/JSE Africa Life Assurance Index.

Judge Brian Mashile in his ruling on Friday said that “the relationship between the parties is unwholesome” and that the “nature of that relationship would potentially have a serious, immediate, ongoing and irreparable damage” on Old Mutual, according to the statement.