Old Mutual Braces for Backlash After Firing On-Off CEO Again

(Bloomberg) -- The door to Peter Moyo’s office at Old Mutual Ltd.’s headquarters in Johannesburg may as well be replaced with a revolving one as his feud with Chairman Trevor Manuel turns increasingly bitter.

The 174-year-old company on Thursday gave Moyo further notice of termination in a dispute that erupted in May and has seen the chief executive officer of the South African life insurer suspended, fired, and then reinstated by a court amid allegations and counter-accusations of conflicts of interest.

Moyo hardly spent a day at the office on July 31 following his court victory, before he was sent packing again as Old Mutual sought leave to appeal the ruling. That judgment is expected in about two weeks.

“This step, as with previous steps taken in relation to Mr Moyo, has been taken after legal advice and on careful reflection by directors, with proper regard to their fiduciary duties to the company,” Old Mutual said in a letter to shareholders on its website. “We must accept that Mr Moyo may decide to challenge this step too. We will stand our ground if he does.”

Eric Mabuza, Moyo’s legal representative, said the move will only cause more confusion and that his client is considering his options. Old Mutual isn’t respecting the process currently before the Johannesburg High Court, he added.

“The route they have chosen is a cul-de-sac,” Mabuza said by phone. “They terminated his contract in June, what are they terminating now?”

Having Moyo back would be untenable for Old Mutual. “It is clearly in the best interests of the company and its stakeholders that the employment relationship with Mr Moyo should come to an end,” it said.

For his part, Moyo believes Old Mutual is a good company and says this is fueling his desire to return. Nevertheless, the 56-year-old CEO also has a separate case pending for the board to be declared delinquent directors.

‘Reasonable Alternatives’

The company is willing to consider “all reasonable alternative options” and its “lawyers have proposed expedited arbitration of those aspects that are suitable for arbitration,” it said.

Assertions that directors are “collectively unable to act independently or are under the sway” of Manuel, a former finance minister, are “insulting, baseless, and defamatory,” the insurer said.

The letter comes as Old Mutual said it expects first-half adjusted earnings per share to climb 7%-13% on the back of higher investment returns. Results from operations will probably fluctuate between a decrease of 1% and an increase of 4% compared with a year earlier.

The stock was trading 0.5% higher at 18.40 rand as of 2:51 p.m. in Johannesburg. That pared losses since Moyo’s suspension was announced to 12%, the second-worst performer in the FTSE/JSE Africa Life Assurance Index.

©2019 Bloomberg L.P.

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