Old Mutual claims axed CEO cannot return because he is busy suing them

Pedro Gonçalves
clock
Old Mutual claims axed CEO cannot return because he is busy suing them

South Africa's Old Mutual is seeking to overturn Peter Moyo's reinstatement as CEO, saying that he would be unable to fulfil is duties as he is busy suing the insurance company, local media reports.

"Mr Moyo will not be returning to office until the appeal process has been completed. It is very clear that there has been an irreparable breakdown in trust and confidence, and that any future working relationship is untenable," it said. 

The Johannesburg high court ruled on Tuesday that not only should Moyo be temporarily reinstated in the position but that Old Mutual should not appoint anyone else to fill the position of chief executive. The interim order was granted pending the outcome of part B of Moyo's application, which seeks to declare the entire 12 non-executive directors of Old Mutual as delinquent.

Moyo will not be returning to office until the appeal process has been completed. It is very clear that there has been an irreparable breakdown in trust and confidence, and that any future working relationship is untenable"

After seven hours of talks, Moyo walked out of the building with his lawyer, Eric Mabuza, having not reached an agreement with the company to return as chief executive.

Amid continued uncertainty at Old Mutual as Peter Moyo's future as CEO hangs in the balance, investors are calling for the situation to be handled.

"We just don't know how it will end. It won't affect the fundamentals [of the business] but in times of uncertainty, it's not surprising to see the share price move," Nick Crail, a fund manager at Ashburton Investments told fin24.

Simon Brown, Founder and director of investment website JustOneLap.com, said the Old Mutual share price had fallen some 10% in the last two weeks. 

"Shareholders cannot be happy with the situation in that firstly, this is costing the company in legal fees and secondly there remains no permanent CEO to run the company in trying times," Brown added.

Moyo was dismissed after a public spat with the board, led by Trevor Manuel, after the board said that there had been a material breakdown of trust and confidence in Moyo. This was after Moyo allegedly failed to declare a conflict of interest arising from his investments in NMT capital, in which Old Mutual holds a 20% stake.

 

 

Subscribe to International Investment's free, twice-daily, newsletter