Yes, but they didn't expect him to blatantly ignore a contractual agreement with respect to preference shares and award himself R36m in dividends...A conflict OM knew about when they hired him. Good corporate governance says any potential for conflict needs managing and preferably avoided.
This.A conflict OM knew about when they hired him. Good corporate governance says any potential for conflict needs managing and preferably avoided.
Adding to this, the behaviour of the board deserves scrutiny. It is quite obvious that the final result will be a parting of ways with Moyo, the only question on that matter is when, how and how much it'll cost. The board is going to remain though, and OM shareholders need to examine how the board handled this and determine whether it's the right board to lead OM. There has been a lot of shareholder value lost due to the manner that this has been handled and due to the asymmetry in power between the board and the CEO, I put the majority of the blame on the board.This.
My understanding is that the mitigation measures put in place to manage the conflict were to make sure that he was not on the board committee that oversaw the NMT investment, and to have a director on the NMT board (Patel) representing OM. That's why I stated earlier that Moyo was not representing OM on the NMT board, he was supposed to ensure a clear separation of interest. Patel was responsible for representing OM on the NMT board.
From an ethics perspective, Moyo had a duty of care for OM's interests (in the same manner as he had a duty of care for the interests of all shareholders in NMT). If he acted contrary to that duty of care (i.e. if what the board is alleging is true, and he acted in an unethical manner) then the board has every right to indicate that it has lost trust and confidence in him. In this case, the board should have followed appropriate measures to act upon this loss of trust and confidence, parting ways with Moyo procedurally. The reason that the board keeps getting kicked in the teeth is because they did not follow the proper procedures (apparently each time they've tried to get rid of him, they've done so unprocedurally). If they carry on in this manner, the courts will keep knocking them back.
They need to take him back, follow the appropriate procedures and finalise the matter as per those procedures & the laws of the land.
The largest shareholder in OM, other than the PIC, is Alan Gray. And they have already said they do not expect OM to lose or make a large payout.Adding to this, the behaviour of the board deserves scrutiny. It is quite obvious that the final result will be a parting of ways with Moyo, the only question on that matter is when, how and how much it'll cost. The board is going to remain though, and OM shareholders need to examine how the board handled this and determine whether it's the right board to lead OM. There has been a lot of shareholder value lost due to the manner that this has been handled and due to the asymmetry in power between the board and the CEO, I put the majority of the blame on the board.
I would posit that Alan Gray's (or any other shareholder's) opinion has no bearing on whether the board executed it's fiduciary duties properly or not.The largest shareholder in OM, other than the PIC, is Alan Gray. And they have already said they do not expect OM to lose or make a large payout.
Posit away. The fiduciary duty is inherent and fundamental to the CEO.I would posit that Alan Gray's (or any other shareholder's) opinion has no bearing on whether the board executed it's fiduciary duties properly or not.
The shareholders' opinion only comes into play when you consider actions to be taken against the board. It could very well be that the board did not execute it's fiduciary duties properly but shareholders are not concerned and wish to retain the board. That's their right as owners of the company (as long as they're abiding by the provisions of the various acts governing businesses and corporations, and are not disadvantaging minority shareholders)
More at: https://www.dailymaverick.co.za/article/2019-09-24-moyo-to-go-after-old-mutual-directors-in-their-personal-capacity/Axed Old Mutual CEO Peter Moyo wants to censure the conduct of Old Mutual board members, including chairman Trevor Manuel, by charging them individually with contempt of court. If found guilty, the directors could be imprisoned – with chilling implications for corporate SA.
The gripping boardroom battle between Old Mutual and its fired-but-reinstated CEO Peter Moyo might make corporate history in South Africa. The four-month-long dispute playing out in the Johannesburg High Court has moved from a spat involving Old Mutual, its 13-member board and Moyo, to a corporate conflagration with very serious implications for errant company directors throughout the country.12
This dramatic possibility was brought into sharp focus as Moyo outmanoeuvred Old Mutual again in court on Monday 23 September – and ensured he would be dragged into further costly litigation against the insurer to get his job back. Moyo was fired by the Old Mutual board on 18 June over a breakdown in trust and an alleged conflict of interest, prompting him to sue for unfair dismissal.
More at: https://www.fin24.com/Companies/Financial-Services/moyo-refused-entry-at-old-mutual-yet-again-20190925Peter Moyo returned to Old Mutual's offices in Sandton, demanding that he be allowed back at work. But for the third time, he was refused entry.
After a court ruling that he had to be reinstated on a temporary basis after his first dismissal in July, Old Mutual fired Moyo again in August.
He tried to go back to work twice in recent weeks, but was not allowed in, with the company contending that Moyo didn't challenge his second dismissal in court.
But on Monday, the South Gauteng High Court granted him leave to bring new evidence in his contempt of court application against Old Mutual. This means he can introduce his second letter of termination. Moyo believes Old Mutual is in contempt of court for not allowing him back at work.
IMO he's just making sure he never finds work again! Taking your boss to court is seldom a career enhancing prospect...Moyo to go after Old Mutual directors in their personal capacity
More at: https://www.dailymaverick.co.za/article/2019-09-24-moyo-to-go-after-old-mutual-directors-in-their-personal-capacity/
BBEEE simply backfired at Old Mutual.
Nothing to see here.
Convince me that Peter Moyo was EVER qualified to hold this position in the first place.
Makes me wonder if Old Mutual put him on in order to get juicy financial benefits from BBBEE deals diverted to Old Mutual.
"He has a Bachelors degree in Accounting science which he obtained after studying at the University of South Africa. The executive is also proficient in Tax Law after attending the University of Witwatersrand for training on the same."
Tell me something new, both those qualifications were probably given to him or he was conveniently pushed through to graduate.
When he opens his mouth it is very hard to imagine much going on upstairs.
State-owned development finance institution, the Industrial Development Corporation, has been forced to explain why it has launched a process to recoup a loan it extended in 2006 to Moyo’s private company NMT Capital. The parties seem to be at odds about the value of the outstanding loan.
In the letter, the IDC’s lawyers, ENSafrica, have accused NMT Capital directors of “unlawful conduct” and misleading the institution as there have been “high levels of misrepresentation and non-disclosure from NMT Capital regarding its financial position.”
The IDC believes that NMT Capital didn’t play open cards with it when the IDC forgave a big portion of the debt. The IDC has accused NMT Capital of misleading it by not disclosing that it had a multimillion-rand windfall before it entered into the debt agreement. In other words, NMT Capital was in a healthy financial position to pay back the IDC loan in its entirety.
The windfall was linked to the sale of NMT Capital’s shareholding in JSE-listed real estate company Growthpoint Properties on 25 June 2018, which saw proceeds of about R311-million flowing into NMT Capital accounts. NMT Capital bought one million Growthpoint shares at R8.79 per share in 2005 in a Black Economic Empowerment deal, with a ten-year lock-in period. The deal was a success for NMT Capital as it sold its Growthpoint shares at R25.55 per share.
At an NMT Capital meeting chaired by Moyo on 4 July 2018, the firm opted to use the proceeds from the Growthpoint sale to, among other things, payout a R105-million dividend to ordinary shareholders and reserve funds for new investments.
In a July letter to NMT Capital, IDC lawyers said the institution was “deeply concerned” about its Growthpoint windfall.
“NMT Capital’s failure to disclose, having received such a sizable payment of approximately R300-million prior to the settlement agreement been approved and/or concluded, is a gross and material representation and non-disclosure of NMT Capital’s financial position, which would have inter alia impacted on the conclusion of the settlement agreement and/or on the repayment of the full outstanding amount at the time,” the lawyers wrote.
Should have done that when requested ages ago - stinks of corruption.The judge will stand down in the ongoing case:
The judge who ordered Old Mutual to reinstate its axed CEO, Peter Moyo, has recused himself from the insurer’s prolonged legal battle.www.fin24.com