Peter Moyo. Picture: MOELETSI MABE
Peter Moyo. Picture: MOELETSI MABE

As any wise lawyer will tell you, even when there are only two parties involved, there are always at least three sides to a story. And so it is with the Peter Moyo versus Old Mutual saga where only two sides have been revealed so far. Each of the parties has provided a credible version of the events that led to Old Mutual’s dramatic suspension and subsequent firing of its CEO. But a third story is needed to understand why.

While corporate SA probably doesn’t want yet another governance-related dispute playing out in the full glare of the media spotlight, it might be helpful to watch this particular battle unfold before a judge. That would provide insight into the workings of high-level executive decisions that are usually taken behind closed doors. It would cast light on how these calls are made and in whose interest.

Moyo says both sets of competing interests were satisfied as Old Mutual’s representative on the NMT board approved the dividend payment.

But, for that very reason, it is likely this matter will never see the inside of a court and the third story never revealed. Our corporate leaders are tribal and, when push comes to shove, they will deal with this in their tribal way and place: behind closed doors.

On the face of it the battle is about the payment, or rather the nonpayment, of preference share dividends owed to Old Mutual by private equity company NMT, co-founded by Moyo in the early 2000s. Since then Old Mutual has poured R279m into various NMT-controlled entities, most of it in the form of preference share capital. The capital has been rolled over a number of times since the initial repayment date in July 2010. NMT says in 2018 it began discussions with Old Mutual on another rollover. All in all a very casual affair.

Until it wasn’t. By late 2018 Old Mutual seemed particularly irked by the casual treatment of its superior rights as a preference shareholder. This is in contrast to the rather generous treatment of ordinary shareholders, who were paid R115m of dividends last year.

Moyo’s 26.6% holding in NMT entitled him to R30.6m of this, which on top of the R50.5m for his job as Old Mutual CEO meant it was a very good year for him.

As part of that job Moyo is obliged to act in the best interest of Old Mutual. But therein lies the rub. He is also required to act in the best interests of NMT. Moyo says both sets of competing interests were satisfied as Old Mutual’s representative on the NMT board approved the dividend payment.

That approval and every minute engagement between NMT and various levels of management at Old Mutual over the past 12 months were no doubt subjected to detailed legal scrutiny before Old Mutual pulled the trigger and issued the termination notice.

Whatever the legal niceties in all of this, one thing is very clear. There are good reasons why companies should avoid situations that give rise to potential conflicts of interest. They are almost never resolved in favour of the main body of stakeholders.

What was Old Mutual thinking when it put in place an elaborate board infrastructure to accommodate Moyo, who was appointed CEO-designate in June 2017?  If it was so keen to secure his employment, surely his assets should have been put into a blind trust or Old Mutual could have purchased his NMT stake? Or have conflicts of interest at the very top become so mundane they are easily accommodated?

Not only was there a protocol put in place to regulate the conflict of interest but there was a board subcommittee — the related-party transaction committee — tasked with overseeing the protocol. And the corporate governance and nomination committee was also involved in the oversight.

What must Old Mutual’s policyholders, shareholders and ordinary employees think when they read about so much board time and executive effort being devoted to determining whether or not their well-paid CEO has their best interests at heart?