Update on Peter Moyo and Termination of Employment
Old Mutual Limited
Incorporated in the Republic of South Africa
Registration number: 2017/235138/06
JSE Share Code: OMU
MSE Share Code: OMU
NSX Share Code: OMM
ZSE Share Code: OMU
("Old Mutual" or “the Company”)
18 June 2019
UPDATE ON PETER MOYO AND TERMINATION OF EMPLOYMENT
The Old Mutual Board (“Board”) refers stakeholders to previous announcements
regarding the suspension of the Old Mutual CEO, Mr Peter Moyo, as released on
SENS on 24 May 2019, and various subsequent media reports.
The Board wishes to inform stakeholders that Mr Moyo has, on 17 June 2019, been
given notice of termination of employment. The Board considers it appropriate
to provide certain material facts that have led to this.
There is a duty on directors of all institutions to be vigilant regarding the
management of conflicts of interest. The importance of this duty has been
highlighted by a number of recent corporate governance breakdowns within both
the private and public sector.
Mr Moyo’s conflicting interest in the NMT group of companies was declared upon
his employment and was governed by a specific protocol to regulate the conflict
of interest in addition to the general obligations flowing from his employment
contract. 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. One of the concerns raised involved two
declarations of ordinary dividends by NMT Capital during 2018 totalling R115m.
The resultant benefit to Mr Moyo and his own personal investment company was
R30.6m. These dividends were declared in breach of Old Mutual’s rights as
preference shareholder, since arrear 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 R105m was declared.
These matters were investigated and reported to the RPTC in February 2019. The
RPTC reported to the OML Corporate Governance and Nomination Committee (NomCom)
in March 2019. 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 Mr Moyo
personally, in an effort to secure information relevant to these events. NomCom
considered these matters at several meetings during April 2019. 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 whilst
debt to Old Mutual was outstanding. On 23 May 2019 the Board discussed these
matters at length and considered its options, noting its duties towards its
stakeholders. 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 23 May 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 24 May 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.
The Board will shortly initiate a process to appoint a new CEO. T his process
will follow our recruitment policies and the requisite Board approvals. Iain
Williamson will continue to act as CEO for Old Mutual, until further announcements
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Notes to Editors
About Old Mutual Limited
Old Mutual is a premium African financial services group that offers a broad
spectrum of financial solutions to retail and corporate customers across key
markets segments in 14 countries. Old Mutual's primary operations are in South
Africa and the rest of Africa, and it has niche business in Asia. With over 170
years of heritage across sub-Saharan Africa, we are a crucial part of the
communities we serve and broader society on the continent.
For further information on Old Mutual, and its underlying businesses, please
visit the corporate website at www.oldmutual.com.
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