Old Mutual suspends CEO, citing ‘material breakdown in trust’

Cius

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Lets check the share price since 2017.
View attachment 663072
The share price drop was due to unbundling subsidiaries. Old Mutual shareholders where given shares in Nedbank etc when they unbundled so ignore the two cliffs as both related to an unbundling and share distribution.
 

Gordon_R

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https://www.fin24.com/Economy/old-mutual-to-fire-ceo-for-breaching-dividend-payment-rules-20190618
Old Mutual suspended Moyo last month to investigate a conflict involving his investment firm NMT Capital. It found a breach of dividend payments of R115m, of which the benefit to Moyo’s NMT was about R31m, Old Mutual said. No clear explanation was given on why the payments were declared outside of the insurer’s policies.

“The board came to the conclusion that there was a material breakdown in trust and confidence,” it said.
 

Gordon_R

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Its going to get ugly: https://www.dailymaverick.co.za/article/2019-06-19-peter-moyo-and-old-mutual-to-duke-it-out-in-court-over-his-sacking/
Eric Mabuza, a prominent lawyer who acted for former SA Revenue Service commissioner Tom Moyane during his questionable court proceedings and now represents Moyo, said the announcement on Tuesday morning by Old Mutual that detailed Moyo’s sacking was “incomplete and at worst misleading”.

“Mr Moyo will, therefore, challenge Old Mutual’s conduct in court, where we trust the truth will be ventilated,” he said.
 
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Gordon_R

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Don't boards decide dividend payouts rather than the CEO or his executive. The board should fire themselves for falling asleep at the wheel.
The issue was dividends paid by NMT Capital, its messy:
According to Old Mutual, two payments made by the firm in 2018 which totalled R115-million, were a breach of its rights as a preference shareholder in NMT. This, it said, was because arrear preference dividends were unpaid at the time and preference share capital was redeemable at the time of the second payment. Old Mutual said it had not received an acceptable explanation for this.
 

schumi

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Peter Moyo challenges axing from Old Mutual, reveals Trevor Manuel 'triple conflict'

Former Old Mutual CEO Peter Moyo has filed an urgent application in the South Gauteng High Court seeking among other things to be reinstated to his position and an interdict stopping the firm from filling his position.

Moyo was unexpectedly suspended from his position on May 23, due to what the company described as a breakdown in trust and confidence.

In his notice, Moyo wants his suspension to be declared “unlawful, unconstitutional and null and void” -- as well as contractual damages against Old Mutual.

At the centre of Moyo’s dispute with the insurer is his relationship with NMT Capital, a black-owned investment company that he co-founded, and an alleged payment of dividends. Old Mutual Life Assurance Company, a subsidiary of Old Mutual, is an investor in NMT Capital.

In his affidavit, Moyo states that his suspension and the eventual termination of his contract on June 17, was “devastating and humiliating”.

He says his rights were ignored and disregarded “in the unilateral preference of the economic interests of Old Mutual”.

Manuel 'triple conflict'

He further states that friction between himself and the company started in March 2018, when he raised concern about what he perceived as “triple conflict” on the part of board Chairman Trevor Manuel during the process of the company’s Managed Separation.

The process saw the company delist Old Mutual plc from the London Stock Exchange and list Old Mutual Limited on the JSE in June 2018.

He said one of the companies which stood to benefit from the exercise which involved a transfer of R5bn from Old Mutual plc to the new entity was Rotchschild, the company which Manuel was chairman. Manuel was also at the time a director at Old Mutual plc and chairman of Old Mutual Limited.
More at: https://www.fin24.com/Companies/Financial-Services/ex-old-mutual-ceo-peter-moyo-challenges-dismissal-20190628
 

Gordon_R

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Peter Moyo challenges axing from Old Mutual, reveals Trevor Manuel 'triple conflict'

More at: https://www.fin24.com/Companies/Financial-Services/ex-old-mutual-ceo-peter-moyo-challenges-dismissal-20190628
Seems like he is using attack as the best form of defence. (Tried by several other high profile figures recently, maybe they share lawyers?) See: https://www.fin24.com/Companies/Financial-Services/ex-old-mutual-ceo-vs-trevor-manuel-explosive-court-papers-reveal-how-all-hell-broke-loose-20190701
Former Old Mutual CEO Peter Moyo has detailed the breakdown of his relationship with Old Mutual chairperson Trevor Manuel in court papers before the South Gauteng High Court, where he alleges that Manuel treated him with "open hostility" and that it was an "understatement" that "all hell broke loose" as a result.

Manuel is listed as one of the respondents in the matter.

The "last straw", says Moyo, was his objection to the board regarding the "improper non-disclosure of a payment amounting to millions of rand, which was paid by Old Mutual in respect of [Manuel's] legal fees for his much-publicised legal battle relating to the Guptas and their associates".
But it was the most recent incident in February/March 2019 that was the "last straw", says Moyo.

He says that he told [Manuel] that he intended to raise another objection to the board, via the Corporate Governance and Nominations Committee or NomCom regarding the "improper non-disclosure of a payment amounting to millions of rand, which was paid by Old Mutual in respect of [Manuel's] legal fees for his much-publicised legal battle relating to the Guptas and their associates". Manuel was chairperson of the NomCom, which is comprised of eight other directors.

"The matter had absolutely nothing to do with Old Mutual," Moyo says. "It was highly irregular and improper not to disclose it to the Old Mutual shareholders, who knew nothing about it. Mr Manuel tried to dissaude me from doing so.

"In March 2019, I nonetheless put the matter on the agenda of the NomCom, of which Mr Manuel was a member. He was asked to recuse himself and he did."

The NomCom, however, again resolved not to disclose the expenditure, Moyo says.

"[This was] despite my motivation that it was compulsory to do so, inter alia, because it amounted to a form of remuneration in the hands of Mr Manuel.

"It would be an understatement to say that after that episode and as a result thereof, all hell broke loose and Mr Manuel treated me with open hostility," he says.
 

schumi

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Old Mutual: Ex-CEO Moyo is using diversion tactics, targeting Manuel

Old Mutual said in a statement on Friday that, while it generally does not respond publicly to allegations made in court papers, it is a matter of concern that its former CEO Peter Moyo and his legal team "appear to be following a deliberate strategy of attempting to divert attention from Mr Moyo's own actions".

"This strategy has included casting aspersions on other directors of Old Mutual by making false and unwarranted allegations directed, in particular, at the Board Chair (Trevor Manuel)," Old Mutual alleges.
More at : https://www.fin24.com/Companies/Financial-Services/old-mutual-ex-ceo-moyo-is-using-diversion-tactics-targeting-manuel-20190705
 

thechamp

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It's going to be interesting, it does seem Manuel's dealings at Old Mutual are as complicated as those of Peter Moyo.
 

dunkyd

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Slightly OT but I remember feeling warm and fuzzy when, 50 years ago, their rep told me as a mutual company, all the money belonged to the clients.....
 

akescpt

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That legal fees thing is a bombshell. Would be interesting to know where they buried that millions in the report.

They will be hating this exposure.
 

Gordon_R

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The latest allegations indicate not just a conflict of interest, but that Moyo's company NMT is effectively bankrupt and in debt to the IDC: https://www.dailymaverick.co.za/article/2019-07-15-old-mutuals-battle-with-peter-moyo-is-not-only-about-a-conflict-of-interest/
Old Mutual’s response also reveals that its battle with Moyo is not just about outstanding preference share dividends but about solvency problems at NMT. If Old Mutual is to be believed, NMT depended on the insurer for its survival.

A January 2019 report prepared by Old Mutual’s related party transaction committee, which manages any potential conflict of interest of board members, revealed that NMT asked Old Mutual to ratify an agreement to write off or remove its R157-million debt to the Industrial Development Corporation (IDC) on its balance sheet for the 12 months ending 31 July 2019.

This would be at the expense of the IDC, which made a substantial preference share investment in a subsidiary of NMT to acquire shares in Basil Read, a struggling construction firm now in business rescue. NMT’s investment in Basil Read has since not lived up to expectations. When Basil Read’s shares tumbled on the JSE before they were suspended in 2018, NMT was unable to fulfil its preference share obligations to the IDC, leaving it with a debt burden.
Old Mutual said the IDC debt wan’t disclosed in a board pack during an NMT board meeting on 4 July 2018. The meeting was chaired by Moyo, who ended-up disbursing dividends payments to ordinary shareholders totalling R105-million on “the basis that it (NMT) was not indebted to the IDC at all”.

“It is not clear how the directors of NMT Capital could have come to that conclusion, particularly given the indebtedness of R157-million… It is difficult to see on what basis the applicant (Moyo) could have concluded that the debt to the IDC could be disregarded and could be treated as having been settled,” Old Mutual said in its court papers.
 
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thechamp

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It's complicated, the whole relationship between Moyo, his company and Old Mutual looks so unhealthy, I wonder why was it allowed in the first place.
 

Gordon_R

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It's complicated, the whole relationship between Moyo, his company and Old Mutual looks so unhealthy, I wonder why was it allowed in the first place.
My speculative take:
1. The pool of available talent who tick all the representative boxes is very small, so a less than perfect candidate was chosen.
2. A self-made entrepreneur carries the baggage of ego and financial entanglements.
3. Internal candidates could probably do the job, but don't tick all the stakeholder boxes.
4. Its a huge and impossible job, and others have similarly fallen by the wayside.
 

akescpt

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Why did old mutual keep quiet about all these issues as they happened.

Seems they have a list of stuff they chose to keep quiet about. Can’t wait to hear what else they kept quiet.
 

schumi

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Everything you need to know about Old Mutual vs. Moyo ahead of the judgment

Former Old Mutual CEO Peter Moyo is expected to hear his fate in the Johannesburg High Court today after he hauled his former employer to court in an attempt to overturn his axing.
This after Moyo and Old Mutual argued the respective merits of their case over two days before Judge Brian Mashile last week.
Moyo launched an urgent application against Old Mutual following his suspension in May and axing soon after. At the time of his suspension - which caused Old Mutual shares to fall the most on record - the company cited a "material breakdown in trust and confidence" between Moyo and the group's board.
Here's everything you need to know as D-day looms for Moyo:


1. What's it all about?


Old Mutual announced in May that Moyo had been suspended but did not provide much detail at the time. In an update to shareholders, it said the board had decided to suspend Moyo after "various engagements" with him.
In an email to staff, which Fin24 saw, Old Mutual chairperson Trevor Manuel wrote that Moyo's suspension was not related to performance, but was "as a result of a conflict of interest matter related to [Moyo's] personal interests".
It later emerged that the "personal interests" in question were related to Moyo's position as a co-founder of investment company NMT Capital.
Moyo had declared his shareholding in the firm when he was hired by Old Mutual. However the company says a conflict of interest arose when Moyo disbursed dividends to shareholders while Old Mutual preferential dividends, an institutional investor, were in arrears. Old Mutual claims that Moyo personally benefited from approximately R30.6m in dividends which he "did not at any stage raise" with Manuel.

2. Was Moyo subjected to a disciplinary hearing before he was axed?


No. The company's failure to institute disciplinary proceedings against Moyo was a key factor in his argument last week. Moyo's legal team highlighted that Old Mutual was duty bound to take Moyo through a disciplinary hearing, and that the company violated its own disciplinary processes by denying him the chance to cite his side of the story.
His legal team also argued that, in terms of its disciplinary code, the company ought to have appointed an independent chairperson who is "impartial and unbiased" to preside over an arbitration process before Moyo was sacked.
3. But what has Trevor Manuel got to do with it?
More at: https://www.fin24.com/Companies/everything-you-need-to-know-about-old-mutual-vs-moyo-ahead-of-the-judgment-20190730-2
 

Gordon_R

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Even if he 'wins' a settlement, the chances of him getting his job back are minimal:
7. What will a judgment in Moyo's favour mean for Old Mutual?
Old Mutual's legal team has argued that even if the court finds that Moyo's dismissal was procedurally flawed, it remains at the judge's discretion whether to reinstate him and this was not an automatic consequence.

It has also argued that if Moyo returns to his position, the company will be the "ultimate loser" due to what it says is a breakdown in trust between the parties. During argument, Judge Mashile, gave both parties a chance to consult about the prospect of Moyo's reinstatement, if he were to grant the order for Moyo's reinstatement.

However, following consultation between the parties, Moyo's legal team informed the judge that "they did not find each other" adding that Moyo's proposal to the firm in relation to it had not been accepted. Details of the proposal was not revealed. Old Mutual's legal representative argued at the time that there was "no mutual respect left here".
 
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