South Africa-based financial services firm Old Mutual has expressed its fury about two articles reporting on the fallout of its current court battle with ousted chief executive Peter Moyo.
The stories ‘Sunlight will reveal the cracks in governance’ and ‘Moyo and [Trevor] Manuel drama casts a shadow over Cyril’s [Ramaphosa] backers’ both appeared in the business section of South African newspaper City Press.
The firm said the articles “unfairly attacked Old Mutual, without giving the company an opportunity to respond”.
“Apart from casting aspersions on the reputation of the entire executive and board and, in particular, embarking on full-on personal attack on the integrity of chairman Trevor Manuel, the articles displayed an overt partisan bias and clear misunderstanding of the facts.”
The case
Old Mutual suspended Moyo in May following a “break down” between him and the board.
He was sacked the following month for gross misconduct.
Moyo hit back and took the company to court, which ruled on 30 July that Old Mutual acted unlawfully and temporarily reinstated him as chief executive.
On 5 August, Old Mutual appealed the ruling in a bid to stop Moyo returning to work.
It said the legal move is intended “to deal with the residual noise relating to Mr Moyo contending that he can immediately return to work”.
The appeal is set to be heard on 13 August 2019.
Untenable
Old Mutual added: “Ongoing court processes are certainly thrusting corporate governance into the spotlight, but certainly not the way the two writers see it.
“Far from Mr Moyo being the hero of this piece, Old Mutual has made it very clear in both its appeal papers and last week’s recent declaratory application, that there has been an irreparable breakdown in trust and confidence, and that any future working relationship with Mr Moyo is untenable, notably due to Mr Moyo’s insistence on instituting further court action to declare board members delinquent.”
“The writers, however, neglect the corporate reality that a chief executive is accountable to the board of a company and the board is elected by its shareholders.
“Once the board has lost confidence in a chief executive, it’s the end of the road. Unfortunately, they then proceed to make judgment calls before even a judge has decided on two crucial outstanding processes.
“Only a judge can, with any finality, decide and no one yet knows what the final outcome will be, especially when it comes to the so-called part B of Mr Moyo’s action.
“In our view, the filing of our application for leave to appeal has, in the meantime, suspended the original order.”
Governance
It added: “There is little doubt that Old Mutual’s actions throughout show in clear, unequivocal terms the high premium it places on strong corporate governance. It forms the foundation of a culture that supports customer, investor and employee confidence.
“It is unfortunate the writers in the above articles failed to see this situation for what it is, and they fail to applaud good governance standards when they see it, especially in light of the devastating challenges SA is faced with today.
“It is time to move SA forward together, with the highest possible ethical and governance standards providing the guiding light every step of the way.”
Old Mutual
The Old Mutual South Africa business split from the group following the managed separation that was first announced in March 2016.
The move saw Nedbank and Old Mutual in South Africa spun out, while the UK wealth management business rebranded as Quilter and the single-strategy arm of Old Mutual Global Investors was sold and renamed Merian.
The South Africa operation has no connection to Quilter or Old Mutual International, which has yet to adopt the group’s branding.
