By Fifi Peters and Monique Vanek
Update to paragraphs 1-3, explaining the contempt of court application in more detail and last two paragraphs explaining the reasons for the move in Old Mutual’s share price since listing.
Round two of the biggest legal battle in present corporate South Africa is expected to play out at the South Gauteng Court on Friday when Old Mutual seeks to get clarity on the reinstatement of its former CEO Peter Moyo, who is fighting to get his job back. Not only will the court hear arguments about whether axed CEO Moyo can return to work, but a contempt of court application against Old Mutual has also been added to Moyo’s answering affidavit.
Moyo alleges that Old Mutual is in contempt of court as it removed the 15 non-executive directors from its declaratory order application, to presumably suggest that they should not have been part of Moyo’s original application filed in July to get his job back. He wants them to be added as joined parties.
He alleges its contempt is shown in various media interviews and articles penned in which independent non-executive directors Paul Baloyi and Nombulelo (Pinky) Moholi as well as Old Mutual’s spokesperson, Tabby Tsengiwe, the company’s chief communications officer participated or were quoted.
This argument was made in Moyo’s responding affidavit filed on Monday in response to Old Mutual’s urgent court application for clarity on whether Moyo can legally return to work through a declaratory order, pending the outcome of an appeal process.
Old Mutual had initially set the deadline to respond to its declaratory order application as 12pm on August 6.
At the time of writing, Tabby Tsengiwe, the company’s chief communications officer told CNBC Africa that she was unaware that Moyo had responded to the declaratory order and filed a contempt of court counter application. Moyo’s attorney Eric Mabuza of Mabuza Attorneys told CNBC Africa that the firm has served its responding papers to Old Mutual’s lawyers, Bowman Gilfillan.
SA’s second largest insurer filed its court application at the South Gauteng Court on July 31, a day after Judge Brian Mashile ruled that Moyo be temporarily reinstated as CEO because the decision by Old Mutual to fire him was unlawful.
The company will argue that doing so will cause harm to Old Mutual and its shareholders and may seek an order suspending Judge Mashile’s decision until its application to appeal the decision is heard.
Moyo’s contract was terminated on June 18 after Old Mutual initially suspended him on May 24, citing a breakdown in trust and confidence in the former CEO over a conflict of interest related to his investment company, NMT Capital, which Old Mutual owns a 20% stake.
The former CEO has refuted the allegations of wrong doing and argues he was fired for blowing the whistle on Old Mutual Chair, Trevor Manuel’s triple conflict of interest and Manuel’s “improper non-disclosure” of payments made by Old Mutual for his his legal battle against the Gutpa family and their associates. Allegations that have been denied.
Moyo is being defended by Mabuza Attorneys while Old Mutual’s legal defence team is Bowmans.
Old Mutual’s stock price ended 1.14% lower at R18.19 on the JSE as escalating trade tensions between the US and China hurt most emerging markets. The JSE’s all share index was also weaker, falling 0.29% to 55,371 points at close.
Old Mutual’s share price has lost 18% since Moyo was suspended and is down 39% from its listing price of R29.90 on 26 June 2018, when it returned its primary listing to the JSE following the managed separation from its London parent.
According to Sizwe Ndlovu, Old Mutual’s Head of Investor Relations, the slump in the share price since listing is mainly due to heightened global uncertainty; the unwinding of Old Mutual’s stake in Nedbank from 52% to 19.9% last year and the payment of a special dividend, which also took place in 2018.