JOHANNESBURG (Reuters) - Old Mutual’s former chief executive Peter Moyo plans to take the South African insurer to court after he was fired on Tuesday following a row over an alleged conflict of interest.
The newly-listed insurer had said in a statement that it had sacked Moyo after the break down of attempts to separate amicably following his suspension as CEO in May.
A lawyer for Moyo, who was suspended less than a year after becoming CEO, said Old Mutual’s statement was at best incomplete and at worst misleading, and that it had suffered no financial or other prejudice as a result of his actions.
“Mr Moyo will therefore challenge Old Mutual’s conduct in court, where we trust the truth will be ventilated,” Moyo’s lawyer said in a statement.
The breakdown between Moyo and Old Mutual makes his departure difficult and potentially costly as South Africa’s second-largest insurer could be ordered to make a payout to its former CEO if he wins his case in court.
Old Mutual declined to comment after Moyo announced his plan to take the matter to court.
Old Mutual shares, which rose after the insurer said in a statement that Moyo had been sacked, slipped into the red, easing 0.3% below their previous close by 1522 GMT.
Old Mutual earlier said Moyo’s actions since his suspension contravened his fiduciary duties to Old Mutual, his employment contract and his notice of suspension, and it had terminated his employment following unsuccessful attempts to engage with him.
The dispute relates to dividend payments made by NMT Capital, an investment firm Moyo founded, where he was a non-executive director and in which an Old Mutual subsidiary is the only institutional investor.
Moyo’s interest in NMT Capital was disclosed upon his employment and protocols put in place to manage the relationship.
But Old Mutual said on Tuesday that two dividend payments made by the firm in 2018, totaling 115 million rand ($7.8 million), breached its rights as a preference shareholder because “arrear preference dividends” were unpaid at the time and preference share capital was redeemable at the time of the second payment.
Old Mutual said Moyo chaired the board meeting of NMT Capital where the second ordinary dividend was declared, and said the benefit to Moyo and his personal investment company of the payments was 30.6 million rand.
The full-year financial statements for Old Mutual Life Assurance Company, the Old Mutual subsidiary, said the total impairment on preference share capital held in NMT Capital and NMT Group amounted to 97 million rand in December 2018.
NMT Capital declined to comment.
Moyo’s lawyer said Old Mutual benefited from the ordinary dividend payments, was paid millions of rand in preference dividends and at all times had a separate director on the board who voted in favor of all the payments.
Reporting by Emma Rumney, editing by Louise Heavens and Alexander Smith