Old Mutual to Fire CEO for Breaching Dividend Payment Rules
(Bloomberg) -- Old Mutual Ltd. plans to fire Chief Executive Officer Peter Moyo after suspending him due to a conflict of interest.
The board gave Moyo a “notice of termination of employment” and will “shortly” start the process to find his replacement, the Johannesburg-based insurer said in a statement. Chief Operations Officer Iain Williamson will continue as acting CEO.
The 174-year-old insurer suspended Moyo last month to investigate a conflict involving his investment firm NMT Capital. It found a breach of dividend payments of 115 million rand ($8 million), of which the benefit to Moyo’s NMT was about 31 million rand, 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.
Moyo is drafting a comprehensive response with his lawyers and it “goes without saying that we will be going to court,” he said when contacted by phone.
Old Mutual’s shares rose as much as 2.3% to 22.19 rand in Johannesburg before paring gains to trade 0.3% up at 21.75 rand as of 12:54 p.m. in the city.
The action “deals with some of the uncertainty around Moyo’s suspension and that’s the most crucial part of this,” Warwick Bam, head of research at Avior Capital Markets said by phone. “There may still be a court case and some uncertainty around this, but it sounds like there have been further circumstances that have occurred beyond the suspension that have added to the concerns.”
This isn’t the first time the 56-year-old has featured in boardroom battles. Moyo, who trained as a chartered accountant at KPMG in Zimbabwe, joined Old Mutual in 1997 before becoming head of Alexander Forbes Group Holdings Ltd. in 2005. He quit two years later after clashing with the board. In 2016, while chairman at Vodacom Group Ltd., Moyo tried to buy a stake in the mobile phone company through NMT, before the deal was scuppered.
When Moyo was appointed CEO in 2017, Old Mutual set up a protocol regarding an earlier 291 million rand investment made by the insurer in Moyo’s NMT. The company, founded by Moyo and two others, has investments in construction, energy and financial services.
Old Mutual’s board felt that the relationship had “become unmanageable and untenable” as they tried to effectively navigate through appropriate disclosure and conflict-of-interest policies, Chairman Trevor Manuel said on May 25.
(Updates with comment from Moyo in fifth paragraph.)
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