Peter Moyo drags Old Mutual to court over second dismissal
Old Mutual served him with a second notice to terminate his employment last Wednesday
Former Old Mutual CEO Peter Moyo has upped the ante, launching yet another high court application, this time trying to have the insurer declared in breach of the constitution.
Moyo says Old Mutual contravened SA’s supreme law by firing him again while the JSE-listed company was still awaiting judgment on the legality of its first bid to dismiss him.
The latest salvo by Moyo, who was first axed by the country’s second-largest insurer in June, comes after Old Mutual served him with a second notice to terminate his employment last Wednesday. The company issued an open letter to shareholders on Thursday, saying the second dismissal was meant to make it clear that regardless of any court ruling Moyo would not be welcomed back as CEO.
Judge Brian Mashile of the Johannesburg high court ordered Old Mutual in July to reinstate Moyo temporarily because it had fired him without a disciplinary hearing in June for an alleged conflict of interest involving NMT, a private equity firm that Moyo co-founded.
Old Mutual Life is a shareholder in NMT.
Old Mutual’s image has taken a hit as a result of the dispute, causing its share price to slump nearly 19% in the three months since it first announced Moyo’s suspension. At close of trade on Tuesday, its share price was 2.76% lower at R17.60.
Last week, Stanlib, one of SA’s largest asset managers, joined other investors in calling for an end to the public battle between the insurer and Moyo, saying the uncertainty created by the dispute was having a negative effect on the company’s share price.
The insurer, which appealed against the July ruling, was waiting to hear if it had succeeded when it fired Moyo again on the basis of legal advice and "careful reflection by directors".
Moyo argues in his latest affidavit that the court should declare that Old Mutual was in breach of section 165(3) of the constitution because the latest dismissal put the insurer in contempt of court, and was a deliberate attempt to interfere with the legal processes.
Section 165(3) of the constitution states that "no person or organ of state may interfere with the functioning of the courts".
"Old Mutual’s conduct, which is deliberately calculated to undermine the efficacy of the judgment of this court, constitutes an act of interference with the functioning of this court," said Moyo in the latest affidavit.
Moyo’s legal team previously accused Old Mutual and its board of being in contempt of court, when it prevented Moyo from returning to work after the July ruling that he should be reinstated immediately. He said the latest move to fire him in anticipation of a judgment that the court was yet to deliver constituted a "grave act of interference" with the court processes.
Old Mutual, which has in the past month been meeting media and shareholders as more investors press it to end the public battle, said on Tuesday it wanted to leave the matter to the courts. "I think we’ll leave this to the court now," said the insurer’s spokesperson, Tabby Tsengiwe.
A labour lawyer, who has been following the case, said his understanding was that Old Mutual had now fired Moyo using a different process, which made his second axing completely unrelated to the first one.
When the insurer fired Moyo in June, gross misconduct was cited, but he was not afforded a disciplinary hearing. Judge Mashile ruled against the insurer because of that charge.
The lawyer, who did not want to be named, said that in its second dismissal notice Old Mutual was likely to have cited only the termination on notice clause as the reason for firing Moyo. By dismissing him on notice, the insurer does not have to hold a formal disciplinary hearing.