The nearly three-month long battle between financial services giant Old Mutual and its chief executive, Peter Moyo, is far from over, with the company maintaining that his reinstatement as its head should be heard by a higher court.
Court papers filed by Old Mutual on Wednesday morning questioned the suitability of Moyo’s reinstatement, saying that the Johannesburg high court failed to consider that the “relationship of confidence, trust and mutual respect [between the board and Moyo] has been completely lost”.
Moyo reported to the Old Mutual offices in Sandton on Wednesday after the court found that his dismissal was unlawful and ordered he be temporarily reinstated pending Part B of his application.
In that part, Moyo is seeking to have the Old Mutual board, led by chairperson Trevor Manuel, declared delinquent. This would prevent the 12-member team from holding any directorships for several years, according to the Companies Act.
Old Mutual says that Moyo’s interim reinstatement was inappropriate given that he is pursuing legal action against the board while he is also be expected to be running the business for an unspecified period while the board has “genuinely lost trust and confidence in [him] and whose employment will have been found to have been properly and lawfully terminated.”
“The breakdown in the relationship of trust and confidence, especially in light of the ongoing litigation that the non-executive directors are to be declared delinquent, would render Old Mutual the ultimate loser.”
In the papers seen by Mail & Guardian, Old Mutual argues that Judge Brian Mashile failed to properly apply the law when he ruled that the company considered themselves no longer bound by the employment contract between themselves and Moyo following the breakdown of trust between the two parties.
Old Mutual argues that a clause in Moyo’s employment contract does not stipulate a “contractual requirement to follow a fair process to provide just cause or a fair reason for termination.”
Judge Mashile also interdicted Old Mutual from appointing another chief executive while Moyo’s temporary reinstatement stands and pending the finalisation Part B of Moyo’s application. Old Mutual argues that the order is not founded on legal right and that Part B, if successful could take a number of years to be finalised, leaving the company without a permanent chief executive.
With just over four years remaining on his contract with Old Mutual, Moyo has said that he would like to return to the company despite the litigation.
“This is a great company and some of us have spent a long time making sure that we get this company to be what it is today. We must separate the doings of individuals with the doings of the company,” he said.
Although no date for the leave to appeal has been granted, M&G understands that the case should be heard at the Supreme Court of Appeal during the course of next week.
In a day of high drama, Moyo did not resume his duties on Wednesday after he, together with his lawyer, Eric Mabuza were locked in discussions with Old Mutual’s legal representatives.
Following a breakdown in the discussions, Mabuza told journalists who had gathered at the entrance of Old Mutual that the company had proposed that both parties had turned over the remainder of the discussions to their senior counsel. Old Mutual then indicated that their representatives would not be available for further discussions, leaving Moyo and Mabuza no option but to exit the building.
“The board is clearly in contempt of court because it is a clear and unambiguous decision [by the court],” Moyo said as he left the building.
Part B of Moyo’s application is expected to be heard within 60 days following the ruling by the court. The legal wrangling could increase volatility in the company’s share price tumbled by 5% to R19.45 following Tuesday’s ruling.
“Mr Moyo is not permitted nor allowed to resume duty because our leave to appeal actually means that the order to have him reinstated is suspended,” said old Mutual spokesperson Tabby Tsengiwe.
“We’re acting within the confines of the law and that everything that has happened is actually primarily in the interests of all our stakeholders,” Tsengiwe said.