Old Mutual director Nombulelo “Pinky” Moholi has walked out from the board of SA’s second-largest insurer, a move that might suggest that the previously 14-member board is divided about how to handle the tumultuous ousting of Peter Moyo from his position as CEO.
Moholi, a non-executive director who sat on Old Mutual’s board for seven years and chaired the remuneration committee, resigned with immediate effect on 18 September citing “personal reasons.”
In a terse statement on Thursday 19 September to the JSE’s regulatory news service, Old Mutual gave no further explanation for Moholi’s sudden resignation. Her exit comes a year before her tenure as a director is set to end in 2020 and after she was re-elected by shareholders on the board at Old Mutual’s annual general meeting on 23 May.
In corporate South Africa, when directors resign with immediate effect and without finishing their term it is usually a sign that the exit was not a happy one.
Moholi’s abrupt resignation has fuelled speculation that it is linked to her displeasure about how her Old Mutual board colleagues handled Moyo’s axing on 18 June. The axing has become an embarrassing event for the insurer because the high court in Johannesburg has ordered (twice) that Moyo be temporarily reinstated.
Events leading to the resignation
Business Maverick understands that Old Mutual held strategy sessions on Monday 16 September and Tuesday 17 September, which involved board members. Moholi used one of the meetings to announce her resignation.
Although Old Mutual’s spokesperson Tabby Tsengiwe confirmed that board members met during the insurer’s strategy sessions, she said the sessions were not unusual as they were “long planned on the calendar of Old Mutual”.
A source close to the sessions said board members are divided about the axing of Moyo. Moholi wanted Old Mutual to enter into settlement talks with Moyo and end the impasse, which has dragged on for nearly four months and weighed on the insurer’s share price. Fellow board members Paul Baloyi and Itumeleng Kgaboesele are said to have supported Moholi’s view.
However, other board members, including chairman Trevor Manuel, have intensified the battle against Moyo and want to settle it through the courts.
“She (Moholi) didn’t want to see the dispute with Moyo drag on in courts. But some board members including Trevor (Manuel) insist on fighting Moyo in court, which she (Moholi) disagrees with. Other board members also disagree with the court battle.
“I am surprised that Moholi is the only board member who has resigned so far. I expect more to resign in protest,” the source said.
Business Maverick’s attempts to reach Moholi for comment were unsuccessful.
Asked if Moholi’s resignation was linked to any displeasure about how the Moyo saga has been handled, Old Mutual’s Tsengiwe said:
“This is speculation and we cannot comment on speculation. When I spoke to her (Moholi), she said resigned for personal reasons. We cannot go beyond that.”
Arguably, the alleged board division is a blight on the recent charm offensive proffered by Manuel, who recently said that the board remains united about seeing the fight with Moyo in court to the end. He also said the board is unanimous about not wanting Moyo back at Old Mutual.
“The board arrived at a conclusion — and there is no individual who didn’t articulate a view on this — that the relationship (with Moyo) has broken down irretrievably,” said Manuel in an interview with Business Maverick on 13 September.
Early signs that Moholi wanted to settle with Moyo
Moholi is an accomplished executive and a former Telkom CEO with more than two decades of experience in SA’s telecommunications industry.
She was one of the few Old Mutual board members that engaged with journalists in August about the insurer’s punch-up with Moyo, even suggesting to Business Day that the board was open to entering into settlement talks with him. Unlike the mudslinging approach taken by Old Mutual and Moyo, Moholi was more measured, praising the axed CEO for being talented and experienced.
Moholi’s desire to end the nasty punch-up with Moyo would save Old Mutual from further embarrassing court defeats and potentially halt the more than 6% sell-off in the insurer’s share price since he was fired on 18 June.
To recap: On 30 July, Judge Brian Mashile ruled that Old Mutual should temporarily reinstate Moyo after firing him without a disciplinary hearing. Moyo was suspended on 23 May after a “material breakdown in the relationship of trust and confidence” between him and the board and was dismissed on 18 June.
On 6 September, Mashile dismissed Old Mutual’s application for a declaratory order that blocked Moyo from returning to his office until the conclusion of the insurer’s appeal against the 30 July judgment. Mashile also granted Old Mutual leave to appeal against the judgment in which the hearing is expected between 4 November and 6 December.
Moholi was also among the individuals cited in Moyo’s court application to declare the entire board to be in contempt of court after he was barred from returning to his office after the 30 July order. With Moholi no longer a board member, she doesn’t face potential contempt of court sanctions — Moyo removed her from his court application on Friday 20 September. On Monday 23 September, Mashile will rule on Moyo’s contempt of court application at the high court in Johannesburg. BM