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Business Maverick

In the bruising battle with Peter Moyo, Old Mutual claims it could end up ‘the ultimate loser’

Old Mutual CEO Peter Moyo. (Photo: Gallo Images / Sunday Times / Moeletsi Mabe)

Old Mutual has launched an appeal of a high court judgment that immediately reinstated Peter Moyo as CEO. In its application to the Supreme Court of Appeal, Old Mutual said the high court order was ‘wholly inappropriate’ and ‘extraordinary’ because it was not ‘founded on any legal right’.

Peter Moyo’s return to Old Mutual on Wednesday 31 July as the life insurer’s reinstated CEO had the trappings of a dramatic movie about nasty boardroom battles in corporate South Africa.

After winning his Johannesburg High Court battle on Tuesday, July 30 against Old Mutual to get his job back, Moyo went to the insurer’s swanky headquarters in Sandton at 8am the next day to resume his duties. Upon his arrival, he was barred by Old Mutual’s lawyers and head honchos from occupying his office.

The reason is that Old Mutual has launched an application to appeal the court order that immediately reinstated Moyo and blocked the insurer from appointing a new CEO – pending the conclusion of another court application he launched claiming damages.

Old Mutual said its appeal application immediately suspends the implementation of the high court judgment and until this process is completed, Moyo is not allowed to report for work. Moyo disagreed, accusing Old Mutual of being in contempt of a court order. After failing to reach an agreement, Moyo left Old Mutual’s building at about 3pm.

About 45 minutes after Moyo left the building, which houses more than 5,000 employees across 11 floors, it was evacuated because of a bomb scare. Old Mutual security received an anonymous call from someone who said there was a bomb in the building. However, there was no security threat.

It was an eventful day for a life insurance company like Old Mutual, which usually spends its day doing exacting actuarial work such as calculating risk and life expectancy of its clients, and peddling policies to customers.

Beyond the bomb scare, Old Mutual has launched another battle with Moyo.

To recap: Old Mutual suspended Moyo on 23 May, hours before the insurer’s annual general meeting, citing a breakdown of trust and confidence between both parties. The insurer fired Moyo on 18 June, accusing him of wrongfully pocketing dividends worth R30-million relating to an investment firm he co-founded. Read more here.

Old Mutual appeal application

In its application to the Supreme Court of Appeal, Old Mutual said the high court order that reinstated Moyo was “wholly inappropriate” and “extraordinary” because it was not “founded on any legal right”.

Old Mutual has taken umbrage with Moyo pursuing another high court application, known as part B, that seeks to declare board chair Trevor Manuel and 12 non-executive directors as delinquent, which could result in the entire board being fired.

The court also failed to have regard to the serious consequences for governance and in company law of a situation in which a chief executive [Moyo] actively pursues litigation against the company, which he is responsible for running, and further seeks to have all non-executive members of the board declared delinquent,” the company said in court papers.

[Old Mutual] would have been forced to endure a chief executive [Moyo] running its extensive businesses for an extended period in circumstances in which the board has genuinely lost all trust and confidence in that person.”

Old Mutual wants to terminate Moyo’s employment contract on six months’ notice, paying him R4-million over the period. Meanwhile, Moyo wants to serve the four-and-a-half-years remaining on his employment contract.

Old Mutual said if it’s blocked from appointing Moyo’s successor until part B of his court application is completed, the insurer will be “the ultimate loser” because it might take “a number of years to finalise” the application.

Moyo won his high court case on the basis that Old Mutual flouted terms of its employment contract with him – particularly clause 24.1.1 – because it didn’t afford him a disciplinary hearing before he was fired. Old Mutual has rejected this, saying the court has misinterpreted the clause, because the insurer wasn’t required to provide a reason or follow a fair process when it terminated Moyo’s employment contract on notice.

Giving six months’ notice is all that was required to terminate [Moyo’s] contract lawfully,” said Old Mutual, adding that this is appropriate when it has lost confidence and trust in an employee.

Moyo hits back

The high court judgment affirmed Moyo’s argument that his battle with Old Mutual has been damaging to his reputation.

The damage to his reputation is extant and the only way to cure this is to accede to his appeal for interim relief [to declare Moyo’s dismissal as unlawful],” Judge Brian Mashile wrote in his judgment.

In its appeal, Old Mutual said the court should have dismissed the urgency of Moyo’s application because if he was to be successful in part B, his contract of employment and reputation would be restored.

In a three-page letter written by Moyo’s, lawyer Eric Mabuza, to Old Mutual, he said the insurer’s claim that Moyo was not entitled to return to work until the Supreme Court of Appeal makes a ruling was based on “the incorrect legal advice”.

While, contrary to popular belief, an order for interim or interlocutory relief is indeed appealable, the noting of an application for leave to appeal in respect thereof does not automatically suspend the decision [to reinstate Moyo],” said Mabuza.

Insofar as the first ground of appeal stated in your application for leave to appeal, is ‘urgency’, an order granting urgency is certainly not appealable,” he added, citing section Section 18(2) read with Section 18 (3) of the Superior Courts Act. BM


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