'No separation agreement reached' so Old Mutual fires suspended CEO Peter Moyo
Old Mutual has fired its CEO Peter Moyo weeks after announcing his suspension over a conflict of interest.
"The board wishes to inform stakeholders that Mr Moyo has, on June 17 2019, been given notice of termination of employment," the financial services group said on Tuesday.
"There is a duty on directors of all institutions to be vigilant regarding the management of conflicts of interest," it said, citing a slew of "corporate governance breakdowns" in SA's public and private sectors.
Moyo was suspended in late May over a disagreement as to how the company should engage with investment firm NMT Capital, which Moyo founded. Old Mutual Life Assurance Company, a subsidiary of Old Mutual, is an investor in NMT Capital.
The financial services group confirmed on Tuesday that Moyo's conflicting interest in the NMT group of companies had been declared.
However, in the second half of 2018 board members requested a report on his related-party transactions, and this led to "various concerns", including two declarations of ordinary dividends by NMT Capital during 2018, with Moyo's share being R30.6m.
"These dividends were declared in breach of Old Mutual's rights as preference shareholder, since arrear preference dividends were unpaid at the time and, at the time of the second dividend declaration, the preference share capital was redeemable."
The preference share capital remained unpaid, Old Mutual said.
Moyo chaired the board meeting of NMT Capital at which the second ordinary dividend was declared. This was investigated by an Old Mutual board committee in February 2019.
"The board has not been provided with an acceptable explanation why, in clear contravention of the relevant preference share agreement with Old Mutual as well as Mr Moyo's employment obligations, ordinary dividends were declared whilst debt to Old Mutual was outstanding," the group said.
The Old Mutual board, chaired by former finance minister Trevor Manuel, ultimately decided there was "a material breakdown in trust and confidence in Mr Moyo".
The group then proposed "an agreed separation", but after no such agreement was reached, Moyo was suspended. Moyo's actions since then had "contravened his fiduciary duties to Old Mutual", his employment contract, and his notice of suspension.
"Following unsuccessful attempts to engage on the terms of separation, the board has now resolved to give notice of termination of employment."
The group would soon start the search for a new CEO, it said. In the meantime, Iain Williamson would continue to act as CEO.
Old Mutual's shares were 1.3% up at R21.97 in early trade on Tuesday.
- BusinessLIVE with Reuters