Old Mutual terminates chief executive officer's employment

18th Jun 2019 08:32

(Sharecast News) - The board of Old Mutual terminated the employment of its chief executive officer Peter Moyo, alleging that he breached his contractual obligations with the South African financial services group when, as chairman of NMT Capital, he benefitted personally from two dividend payments that it believed to be in breach of Old Mutual's rights as a preference shareholder.During the back half of 2018, NMT Capital approved two dividend payouts totalling ZAR115.0m, of which his own personal investment company benefitted to the tune of ZAR30.6m.Moyo allegedly also chaired the NMT Capital board meeting at which the second of those payouts, worth ZAR105.0m was approved.But at the time, arrear preference dividends had not yet been paid, and when the second payout was approved the share capital was redeemable, Old Mutual said.On 23 May, "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," the company said.Moyo was suspended from his duties on the following day and his "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."Old Mutual added that it would begin the process of finding a replacement shortly with Iain Williamson set to continue in Moyo's stead in the meantime.As of 0834 BST, Old Mutual's London-listed shares were climbing 3.07% to 118.76p.