A sign makes the entrance to Old MutualPlc's company headquarters in Johannesburg, South Africa, onMonday, Aug. 23, 2010. HSBC Holdings Plc, Europe's largest bank, isin exclusive talks to buy a controlling stake in Nedbank GroupLtd., the South African banking unit of Old Mutual Plc, to benefitfrom business ties between Asia and Africa. (Photographer: NadineHutton/Bloomberg)
Old Mutual Ltd. plans to fire Chief Executive Officer Peter Moyoafter suspending him due to a conflict of interest.
|The board gave Moyo a “notice of termination of employment” andwill “shortly” start the process to find his replacement, theJohannesburg-based insurer said in a statement.Chief Operations Officer Iain Williamson will continue as acting CEO.
|The 174-year-old insurer suspended Moyo last month toinvestigate a conflict involving his investment firm NMT Capital.It found a breach of dividend payments of 115 million rand ($8million), of which the benefit to Moyo's NMT was about 31 millionrand, Old Mutual said. No clear explanation was given on why thepayments were declared outside of the insurer's policies.
|“The board came to the conclusion that there was a materialbreakdown in trust and confidence,” it said.
|Moyo is drafting a comprehensive response with his lawyers andit “goes without saying that we will be going to court,” he saidwhen contacted by phone.
|Old Mutual's shares rose as much as 2.3% to 22.19 rand inJohannesburg before paring gains to trade 0.3% up at 21.75 rand asof 12:54 p.m. in the city.
|The action “deals with some of the uncertainty around Moyo'ssuspension and that's the most crucial part of this,” Warwick Bam,head of research at Avior Capital Markets said by phone. “There maystill be a court case and some uncertainty around this, but itsounds like there have been further circumstances that haveoccurred beyond the suspension that have added to theconcerns.”
|This isn't the first time the 56-year-old has featured inboardroom battles. Moyo, who trained as a chartered accountant atKPMG in Zimbabwe, joined Old Mutual in 1997 before becoming head ofAlexander Forbes Group Holdings Ltd. in 2005. He quit two yearslater after clashing with the board. In 2016, while chairman atVodacom Group Ltd., Moyo tried to buy a stakein the mobile phone company through NMT, before the dealwas scuppered.
|NMT Investment
When Moyo was appointed CEO in 2017, Old Mutual set up aprotocol regarding an earlier 291 million rand investment made bythe insurer in Moyo's NMT. The company, founded by Moyo and twoothers, has investments in construction, energy and financialservices.
|Old Mutual's board felt that the relationship had “becomeunmanageable and untenable” as they tried to effectively navigatethrough appropriate disclosure and conflict-of-interestpolicies, Chairman Trevor Manuel said on May 25.
|Related:
- What top personalities can teach us aboutreputational risk
- D&O policy elements, exclusions risk managersneed to know
- D&O liability: Looking back at 2018& ahead to 2019
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