A South African court ruled that Old Mutual Ltd. doesn’t have to give fired chief executive officer Peter Moyo his job back, clearing the way for the insurer to find a replacement. The stock rose.
The High Court in Johannesburg yesterday upheld an appeal by the 175-year-old insurer against a judgment delivered in July last year to temporarily reinstate the CEO.
“It confirms that Old Mutual acted properly,” spokeswoman Tabby Tsengiwe said at the court.
“Importantly it also provides legal clarity on corporate governance and board stewardship, including the relationship between a board and its executive. Old Mutual is committed to strengthening governance and the management of conflicts of interest.”
Moyo told reporters outside the courthouse that there is a “very good chance” he will seek to overturn the decision through the Supreme Court of Appeal in Bloemfontein. His team will first need to study the judgment.
The spat first spilled into the open in May when Old Mutual suspended Moyo, citing a “material breakdown in trust and confidence” over an alleged conflict of interest.
Moyo has denied any wrongdoing and fired back with counter-accusations against the firm over conflicts involving Chairman Trevor Manuel, which both he and the company denied.
Old Mutual had prevented Moyo from gaining access to his office following his initial court victory.
It issued another notice terminating his employment in August, paying out six months of his salary.
Old Mutual’s shares jumped as much as 5,6 percent, the most since November 2018.
That helped pare losses since May to less than 10 percent, the second-worst performer on the five-member FTSE/JSE Africa Life Assurance Index.
The stock hit a record low on September 3.
The case comes as Old Mutual struggles to grow sales and operating earnings amid tepid capital markets, a moribund South African economy and the worst crisis in Zimbabwe in 10 years. — Bloomberg.