Old Mutual’s bid to stop Moyo’s return is a ‘predetermined strategy’, Mpofu says

The showdown between Old Mutual and its CEO, Peter Moyo, continued on Friday only because of the stubbornness of the JSE-listed financial services company’s directors, advocate Dali Mpofu told the Johannesburg high court.

Moyo, who was at the helm for two years, was fired by the insurance company in June over a breakdown in trust and a conflict of interest linked to NMT Capital, says Old Mutual.

At the heart of the breakdown is the payment of ordinary dividends by NMT, co-founded by Moyo, in July 2018 without first paying Old Mutual its preferential dividends and preferential capital. Old Mutual has shares in NMT.

Despite the court ruling that reinstated Moyo in late July, the CEO was prevented from performing his duties when he arrived back at work on August 2.

Old Mutual has asked the court for leave to appeal against a judgment that reinstated Moyo as CEO.

It also sought a declaratory order to ensure Moyo is prevented from returning to work until the appeal is resolved. In a conditional counter application, Moyo asked that the Old Mutual board be found in contempt of court for failing to reinstate him.

Mpofu, who represents Moyo, said the company’s applications for leave to appeal and for declaratory relief were not genuine but rather part of a predetermined strategy.

“The intention was just to kick Mr Moyo out of the gate, by hook or by crook.”

Advocate Alec Freund, representing Old Mutual, argued that an appeal would have reasonable prospects of success as another court might differ on certain aspects, including whether Old Mutual’s dismissal of Moyo was done with good reason and was procedurally sound.

Advocate Tembeka Ngcukaitobi, who also represented Moyo, argued an appeal would not succeed as Old Mutual plainly denied Moyo his contractual right to a pre-dismissal hearing.

Even if another court did not find in Old Mutual’s favour, Freund argued it was unlikely it would would grant Moyo’s reinstatement as the appropriate remedy in this case.

The parties also debated whether an interim order –including one which reinstated Moyo — could actually be appealed.

Freund said an interim interdict could be appealed if it was in the interest of justice, especially if irreparable harm would occur. He argued that, for Old Mutual, that would occur given the fundamental breakdown in the relationship between the board and the CEO, and the parties could not run the company in the best interest of the shareholders.

However, Ngcukaitobi said that for a court to allow an appeal of an interim order was self-defeating and “makes nonsense of the interim order itself” and was also not in the interest of justice.

Mpofu said the legal position was clear and Old Mutual directors “should add to their arsenal more common sense, rather than more lawyers”.

Old Mutual’s representative, advocate Vincent Maleka, said Moyo’s bid to have the board found in contempt of court “doesn’t get out of the starting blocks”.

Ngcukaitobi, however, said it was clear there was “a gross level of incompetence by the people running the show right now”.

Judgment has been reserved.

steynl@businesslive.co.za