Old Mutual CEO Peter Moyo and chair Trevor Manuel at the company’s listing on the JSE last year. Picture: Freddy Mavunda
Old Mutual CEO Peter Moyo and chair Trevor Manuel at the company’s listing on the JSE last year. Picture: Freddy Mavunda

The timing couldn’t have been worse.

Life assurance company Old Mutual announced the "suspension" of CEO Peter Moyo on the morning of its first AGM since it moved its primary listing to the JSE last year.

The sticking point, it seems, was Moyo’s personal holding of about 25% of NMT Capital, a black-owned investment company in which Old Mutual itself bought 20% in 2004.

Quite why it came to this is unclear. It’s not as if Old Mutual wasn’t aware of Moyo’s links to NMT — he is, after all, the "M" in the name. The other founders are Sango Ntsaluba, who started accounting firm SNG, and Thabiso Tlelai, the CEO of Don hotel group. Founding chair Bulelani Ngcuka, former head of the National Prosecuting Authority, has left the business.

Moyo also disclosed his interest in NMT Capital to Old Mutual in 2017, and a formal protocol was implemented to deal with any conflicts of interest. This, Moyo says, even forms part of his employment contract.

Speaking to the FM, Moyo says he has stuck to the letter of the agreement: he has neither reduced nor increased his holding in NMT; he kept to the requirement of sitting in no more than six official NMT meetings, lasting no more than four hours each; and he took no director’s fees. Moyo says NMT’s board looked at putting the assets into a blind trust, but decided it was not necessary — a decision it maybe now regrets.

"I still haven’t been told what the board believes to have changed since I rejoined the group two years ago," says Moyo. "NMT has not raised any new money or made any acquisitions. The only event was the rolling over [extending the term] of the preference shares."

Old Mutual’s main investment in NMT Capital is through R277m of these preference shares. But in its first statement, Old Mutual said it "disagreed materially on how the conflict of interest has been managed".

The protocol document confirms that the final decision-making process regarding Old Mutual’s investment in NMT rests with the corporate governance and nominations committee of the Old Mutual board — and Moyo is explicitly excluded from this process.

That committee is chaired by Old Mutual’s chair (and former finance minister), Trevor Manuel. Moyo says he did not always work with the chair "in the way you love to work".

Reading between the lines, it would seem the personal chemistry between Moyo and Manuel was limited. Those smiles when they blew the horn at Old Mutual’s JSE listing last June may not have been entirely genuine.

Manuel, it transpires, took the conflict of interest issue seriously enough to set up a separate related party transaction committee.

Moyo then found out that law firm Bowmans was conducting an investigation — not into NMT Capital, but into Moyo himself.

In a press statement on the day of the AGM, Manuel said: "Unfortunately the board and the CEO have disagreed materially on how the conflict of interest has been managed, resulting in a breakdown in the required mutual trust and confidence."

Patrice Rassou, head of equities at Sanlam, says he is concerned that the Old Mutual board has not shared the precise circumstances of the bust-up with shareholders.

"It is particularly baffling as [Moyo] was paid R50m in the prior year, presumably for [doing] a good job," says Rassou.

NMT also has no businesses that compete directly with Old Mutual. But perhaps Old Mutual’s board would have preferred more support from companies in which NMT has a shareholding — particularly Willis Towers Watson SA.

As one of the three largest pension fund consultants in SA, Willis Towers Watson SA has given limited business to Old Mutual, preferring Allan Gray, Coronation and Investec.

Another of NMT’s portfolio companies, WFDR Risk Services, the former Alexander Forbes Risk Services Zimbabwe, also may not have acted like the obedient sales channel Old Mutual would have liked.

Quite how this impasse is resolved from here is anyone’s guess. But at the least, it is likely to lead to a prolonged dispute, not helpful to either Moyo or the company.

Warwick Bam, head of research at Avior Capital Markets, says it seems the conflict "has nothing to do with financial misconduct or company performance, [so] it is possible that Moyo could create a long struggle in the hope of limiting lost credibility".

Moyo says he won’t simply roll over — especially as he has kept to the letter of the conflict of interest agreement.

"If others at NMT Capital have acted in a way which has made Old Mutual unhappy, that is not covered by the agreement — it is solely between me and the board," he says.

Late last week, Manuel clarified that a "breakdown in trust" doesn’t necessarily mean someone did something wrong.

But Moyo believes that nevertheless, he is now subject to unfair rumours.

Rassou says Moyo had a unique combination of broad experience, blended with an intimate knowledge of the group. Over the years he not only ran Old Mutual’s employee benefits business, but was also CEO of Alexander Forbes when it was a much bigger business than today, and was a director on the Vodacom and Liberty boards.

For the time being, Rassou believes interim CEO Iain Williamson, who usually runs central operations, can keep the show on the road. "But I don’t think there is anyone else of Moyo’s calibre in the current top management. It looks as though Karabo Morule [head of personal finance] is being groomed for the job, but she is not yet 40 and may not be ready."

Thabo Dloti, who narrowly missed the CEO’s job a decade ago, might be a contender, though he now has a far greater conflict of interest as his company, Sithega, is the major shareholder in investment group Prescient — a wealth manager that competes directly with Old Mutual.