BY Tatira Zwinoira
SOUTH African-headquartered financial services group, Old Mutual (OML), has fired chief executive Peter Moyo over conflict of interest with a firm he founded.
Moyo is a founder and dircetor of NMT Capital, in which Old Mutual is the only institutional investor.
Moyo, together with NMT Capital’s executive chairman, Sango Ntsaluba and director Thabiso Tlelai, helped form the company.
“During the latter half of 2018, the Old Mutual Related Party Transaction Committee (RPTC), a Committee of Independent OML board members, requested a report on Mr Moyo’s related party transactions, and confirmation that the terms of his employment contract had been adhered to. During this process, various concerns emerged relating to Mr Moyo’s conduct in relation to his conflicting interest,” read a statement from Old Mutual yesterday.
“One of the concerns raised involved two declarations of ordinary dividends by NMT Capital during 2018, totalling ZAR115 million. The resultant benefit to Mr Moyo and his own personal investment company was ZAR30,6 million. These dividends were declared in breach of Old Mutual’s rights as preference shareholder, since preference dividends were unpaid at the time and, at the time of the second dividend declaration, the preference share capital was redeemable.
“The preference share capital remains unpaid. Mr Moyo chaired the board meeting of NMT Capital at which the second ordinary dividend of ZAR105m was declared.”
According to Old Mutual, these matters were then investigated and reported to the RPTC in February 2019, where the committee reported to the OML Corporate Governance and Nomination Committee (NomCom) in March 2019.
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This was followed by engagements, both through members of the RPTC and Old Mutual’s legal counsel, with the NMT group as well as with Moyo personally, in an effort to secure information relevant to these events.
Old Mutual said NomCom then considered these matters at several meetings in April.
“The board deliberated on them at two meetings during May 2019. The board has not been provided with an acceptable explanation why, in clear contravention of the relevant preference share agreement with Old Mutual as well as Mr Moyo’s employment obligations, ordinary dividends were declared while debt to Old Mutual was outstanding. On May 23, 2019, the board discussed these matters at length and considered its options, noting its duties towards its stakeholders,” Old Mutual said.
“The board came to the conclusion that there was a material breakdown in trust and confidence in Mr Moyo. After reaching this conclusion, and in the course of May 23, the board engaged with Mr Moyo regarding the possibility of an agreed separation, but no agreement could be reached on this. The board decided that in the circumstances, it was appropriate to suspend Mr Moyo. This was announced on May 24, 2019.
“Mr Moyo’s actions, since the suspension, contravened his fiduciary duties to Old Mutual, his contract of employment and his notice of suspension. Following unsuccessful attempts to engage on the terms of separation, the board has now resolved to give notice of termination of employment.”
