(Recasts with Old Mutual chairman comments)
JOHANNESBURG, Sept 13 (Reuters) - Old Mutual’s Chairman Trevor Manuel said the board had no intention of stepping down and wanted to set the record straight in court to put an end to a dispute with sacked CEO Peter Moyo.
According to court papers, Moyo, who was fired in June over a conflict of interest, has accused Manuel, a prominent businessman and former finance minister, and other members of the board of breaching governance principles and wants the board to be declared delinquent.
The very public spat has knocked nearly 10% off the 173-year-old insurer’s share price forcing it to launch its second share buyback of the year in a bid to bolster its stock price.
On Friday Manuel told journalists the board intended to remain in place, adding “the board is solidly behind what has happened every step of the way.”
Old Mutual has talked with its shareholders, including the two largest shareholders Allan Gray and the Public Investment Corporation, and they have not raised any issues on the credibility of the board and how the dispute is being handled, Manuel added.
The court temporarily reinstated Moyo in July, blocking Old Mutual from taking steps to replace him while a fuller case against his dismissal was heard.
But Old Mutual said he could not return to work while it appealed. Last Friday the High Court dismissed Old Mutual’s application to suspend the July 30 reinstatement order, while at the same time granting the insurer leave to appeal the first judgment.
“That victory last Friday in being granted leave to appeal is fundamental to us because we believe that we will be afforded an opportunity to set the record straight,” Manuel said.
“We look at the appeal process with a great deal of confidence...but the matter must come to a conclusion. The share price needs to pick up and I think people need the confidence.”
Old Mutual dismissed media reports that it was backing down from the legal dispute with Moyo, after confirming it had sent a letter to Moyo’s attorneys on Thursday saying it would not seek further court intervention on his second letter of termination.
Moyo turned up for work on Monday but was again prevented from resuming his duties, with the insurer saying a second notice of termination given on Aug. 21 stands.
Old Mutual is currently trying to deepen its roots as an African financial services group following the breaking up of its conglomerate structure. (Reporting by Nqobile Dludla; Editing by Mark Potter and Elaine Hardcastle)
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