Old Mutual has to fired,its chief executive Peter Moyo in an open letter to shareholders, after a court ruled last month that he should be reinstated.
The insurer has appealed the High Court ruling ordering Moyo’s temporary reinstatement and has said it will not allow him to return to work because of their breakdown in relations.
Old Mutual fired Moyo in June after a disagreement over an alleged conflict of interest. Moyo has since challenged the validity of his firing.
Key points of the open letter to shareholders:
"In June 2019, Mr Moyo was given six months’ notice of termination of his employment. This is the notice period provided for in his contract of employment.The Board took legal advice on the procedure that it followed before giving notice and considered whether it should initiate a formal inquiry before taking further decision. On careful reflection, it considered that the process of dialogue and engagement that it had followed with Mr Moyo had provided a fair and appropriate opportunity for Mr Moyo to address the issues raised with him, and that an adversarial internal process would not have been either more fair to Mr Moyo or appropriate from the point of view of the company and its stakeholders."
"The ongoing appeal processes and related litigation have, however, in certain respects been overtaken by events.It will remain important to finally resolve the dispute about the validity of the June notice of termination. However, irrespective of what might eventually happen in those legal proceedings, events following the June notice have made it clear that a continued employment relationship between Mr Moyo and Old Mutual is untenable. The directors have been appointed by shareholders, and are required to take appropriate steps in the exercise of their fiduciary duties to the company. It is clearly in the best interests of the company and its stakeholders that the employment relationship with Mr Moyo should come to an end."
"For this reason, Old Mutual has now given Mr Moyo a further notice terminating his employment."
Old Mutual has not initiated the litigation with Mr Moyo, and is unfortunately not able to bring it to an end of its own accord. Its lawyers have proposed expedited arbitration of those aspects that are suitable for arbitration, and the company will continue to explore and consider all reasonable alternative options open to end the disputes with Mr Moyo. But the Board cannot discharge its fiduciary duties without opposing claims where this is in the interests of stakeholders and where the company is legally advised that it has good grounds for doing so.
Old Mutual has been under pressure from shareholders to end the damaging dispute with Moyo, which has knocked its share price.