Old Mutual’s Fired CEO Peter Moyo Seeking $16 Million in Damages

(Bloomberg) -- Old Mutual Ltd. said fired Chief Executive Officer Peter Moyo issued the South African insurer with a summons seeking damages totaling 250 million rand ($16 million).

The company will defend “any claim vigorously,” Johannesburg-based Old Mutual said in an emailed response to questions on Wednesday. The amount is in addition to the 36 million rand Moyo received for “doing the job” and 4 million rand for his six months notice period, it said. “Old Mutual believes that it was correct to dismiss Mr Moyo.”

Moyo said his primary intention is to get his job back. “If they don’t give me my job back, I am entitled to claim in accordance with my contract,” he said by phone after Old Mutual confirmed the claim. He has also chosen to make a claim for what he views as a violation of the law by Old Mutual, Moyo said, declining to comment on the amount because the court filings may not have been made public yet.

The spat between the 174-year-old insurer and Moyo spilled into the open in May when he was suspended for an alleged conflict of interest. The company fired him three weeks later, a decision Moyo successfully challenged in the High Court in Johannesburg. Old Mutual has prevented the 56-year-old from returning to work on grounds it is appealing the ruling to temporarily reinstate him. Moyo was issued with another notice of termination in August.

Shares in Old Mutual have declined 10% since Moyo was first dismissed, the second-worst performer in the FTSE/JSE Africa Life Assurance Index, which is down 3.5%.

Old Mutual’s board fired Moyo for an alleged conflict of interest over his investment firm, NMT Capital, in which he owns a 20% stake. The insurer had acquired 20% of NMT by funding the company founded by Moyo and two others since 2004, and formed a pact to govern any potential conflicts when Moyo took the role in June 2017.

Dividend Payments

Moyo denies violating the agreement and has said that Old Mutual had representatives on NMT’s board so were aware of all of its decisions.

Among the conflicts highlighted by Old Mutual is that NMT made 300 million rand from the sale of shares in Growthpoint Properties Ltd. NMT then declared an ordinary dividend of 105 million rand to its shareholders. Old Mutual contends it was first in line for preference-share dividends of more than 65 million rand before an ordinary payout can be made.

Moyo has denied any wrongdoing and said that his contract extended until his retirement age of 61. He was entitled to a disciplinary hearing, the CEO said in court filings.

To contact the reporters on this story: Loni Prinsloo in Johannesburg at lprinsloo3@bloomberg.net;Roxanne Henderson in Johannesburg at rhenderson56@bloomberg.net

To contact the editors responsible for this story: Rebecca Penty at rpenty@bloomberg.net, ;Stefania Bianchi at sbianchi10@bloomberg.net, Vernon Wessels, Rene Vollgraaff

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