JOHANNESBURG-Former Old Mutual CEO Peter Moyo has detailed the breakdown of his relationship with Old Mutual chairperson Trevor Manuel in court papers before the South Gauteng High Court, where he alleges that Manuel treated him with “open hostility” and that it was an “understatement” that “all hell broke loose” as a result.
Manuel is listed as one of the respondents in the matter.
The “last straw”, says Moyo, was his objection to the board regarding the “improper non-disclosure of a payment amounting to millions of rand, which was paid by Old Mutual in respect of [Manuel’s] legal fees for his much-publicised legal battle relating to the Guptas and their associates”.
Moyo has filed an urgent application in the South Gauteng High Court seeking, among other things, to be reinstated in his position. He also wants an interdict stopping the firm from filling his old job. Moyo was unexpectedly suspended from his position on May 23, due to what the company described as a breakdown in trust and confidence. He was later sacked.
In his notice, Moyo wants his suspension to be declared “unlawful, unconstitutional and null and void” – and is also asking for contractual damages against Old Mutual.
While Moyo’s dispute with the insurer is the payment of dividends to NMT Capital, a black-owned investment company that he co-founded, in papers before the court, it is his relationship with Manuel that he highlights as a key factor in the matter.
Old Mutual Life Assurance Company, a subsidiary of Old Mutual, is an investor in NMT Capital.
‘Triple conflict of Interest’
In his affidavit, Moyo says the dispute started in March 2018 when, acting in good faith, he approached Manuel over his “genuine concerns” relating to what he perceived as being Manuel’s “triple conflict of interest”.
“In brief, this occurred around a massive multi-billion rand commercial project, known as Managed Separation, which involved the delisting of Old Mutual plc from the London Stock Exchange and the proposed listing of Old Mutual Limited on the JSE,” Moyo’s affidavit reads.
“It so transpired that one of the aspects of this exercise involved the proposed transfer of a large liability or obligation, valued at more than $400 million or R5bn from Old Mutual plc to the present-day Old Mutual Limited.
“Were it to transpire that the assumption of that liability by Old Mutual in SA would be rejected, then the entire Managed Separation project would have most probably have been aborted. One of the companies which stood to benefit the most from the realisation of the … project was Rothschild, which stood to gain (and eventually did gain) hundreds of millions of rand in fees as one of the transaction advisers.”
Moyo goes on to say that while this would ordinarily be normal at face value, the fact that Manuel was a director of all three companies created a “triple conflict of interest”. Manuel was simultaneously a director of Old Mutual plc, the chairperson of Old Mutual (Limited) and the chairperson of Rothschild & Co.
“I openly voiced my objections to Mr Manuel about the impropriety of his participation in any discussions regarding our proposed assumption or takeover of the Old Mutual plc (contingent) liability, which was in the nature of a guarantee in favour of an American company.
“Mr Manuel ignored and failed to act on my raising the alarm in that regard, despite the obvious seriousness of the transgression. He continued to participate in the discussion of this matter,” Moyo says, adding that it was from this point that Manuel’s attitude toward him “deteriorated”.
“I tried to explain to him that it was nothing personal, but all in vain,” says Moyo, adding that there were several other incidents of “pettiness” following this incident.
“Last straw” and how “hell broke loose”
But it was the most recent incident in February/March 2019 that was the “last straw”, says Moyo.
He says that he told [Manuel] that he intended to raise another objection to the board, via the Corporate Governance and Nominations Committee or NomCom regarding the “improper non-disclosure of a payment amounting to millions of rand, which was paid by Old Mutual in respect of [Manuel’s] legal fees for his much-publicised legal battle relating to the Guptas and their associates”. Manuel was chairperson of the NomCom, which is comprised of eight other directors.
“The matter had absolutely nothing to do with Old Mutual,” Moyo says. “It was highly irregular and improper not to disclose it to the Old Mutual shareholders, who knew nothing about it. Mr Manuel tried to dissaude me from doing so.
“In March 2019, I nonetheless put the matter on the agenda of the NomCom, of which Mr Manuel was a member. He was asked to recuse himself and he did.”
The NomCom, however, again resolved not to disclose the expenditure, Moyo says.
“[This was] despite my motivation that it was compulsory to do so, inter alia, because it amounted to a form of remuneration in the hands of Mr Manuel.
“It would be an understatement to say that after that episode and as a result thereof, all hell broke loose and Mr Manuel treated me with open hostility,” he says.
‘Gunning for me’
Moyo says it was at the end of April that he became aware of Manuel’s allegations against him of having breached the protocols in respect of the Old Mutual/NMT relationship.
“Towards the end of April, I was totally taken aback when it first came to my attention that there was a view being bandied about that I had breached the protocols in relation to the late payment of the preferential dividend and the non-repayment of the capital loan…
“It became clear to me that Mr Manuel was strongly spearheading this suggestion that I had acted contrary to the provisions of the protocol.”
Moyo says the allegations against him was later referred to the Old Mutual Related Party Transactions Committee, which in turn referred it to NomCom and then to an Ad Hoc Committee and eventually to a board decision where after he was suspended and eventually sacked without a hearing.
He said at one point, at least one board member – whose identity he does not wish to disclose – had “whispered to him in very strict confidence that the chairman of the board [Manuel] was ‘gunning for me’ and bullying other directors to pursue the NMT matter for some inexplicable and ulterior purpose”. Moyo says he was prepared to disclose the identity of this witness to the court, subject to the information receiving the necessary protection.
“From this interaction, I confirmed the distinct impression I had gained that the chairman was determined to get rid of me using the NMT matter as an excuse and that he was putting undue pressure on other directors, who were unfortunately and improperly allowing themselves to be bullied and to which they clearly succumbed.” Fin24