The word “tenacity” is defined by the dictionary to mean one of three things: the quality or fact of being able to grip something firmly, or the quality or fact of being very determined; determination or, finally, the quality or fact of continuing to exist; persistence.
The Chief Grip, Indefatigably Persistent, Royal King of Determination Peter Moyo has lived the good litigation life and come up empty. Again. Let me remind you who this tenacious gentleman is as I wrote about it back in 2019.
On May 24, 2019, the board of Old Mutual Limited released a statement to the Johannesburg Stock Exchange that it was suspending the CEO, Peter Moyo. A few weeks later, another statement was released that Moyo’s employment was being terminated.
The reason given was concerns that had emerged relating to a conflict of interest in a company in which Moyo was the chairman and in which Old Mutual was a shareholder. Moyo took the company to court, suing for wrongful termination thus seeking reinstatement, damages to his reputation and asking the court to declare the Old Mutual board of directors delinquent.
In July 2019, Judge Brian Mashile ordered for his temporary reinstatement as CEO, but the company refused to let him into his former Old Mutual offices, leading Moyo to sue further for contempt of court.
I wrote five articles about this divorce case between the board and its CEO over 2019 and 2020. In my last piece in June 2020, I wrote “On January 14, 2020, the South African High Court upheld an appeal by Old Mutual against the reinstatement of Peter Moyo as CEO and then two months later on March 17, 2020, the court dismissed Moyo’s application to prohibit the company from hiring a permanent CEO.
"However, Moyo’s streak of bad luck didn’t end there. A short week later, the Supreme Court of Appeal dismissed, with costs, his application for leave to appeal the January judgment that overturned the temporary reinstatement.
"The judges found that there had been no constitutional interference with Moyo’s right to work, dignity or self-worth and that he was not entitled, as a matter of constitutional law, to employment at a particular employer.”
But Moyo was determined to extract his pound of flesh from Old Mutual in court. To date, it is only Moyo’s lawyers who have extracted thousands of pounds worth of legal fees from their client in addition to Old Mutual’s legal costs.
He continued his law suit for damages amounting to R250 million (Sh1.9 billion), which is the amount he would have earned to the end of his contract and also sued the 13-member board of directors for delinquency.
It is important to note that the reason he was asked to leave was a very untidy conflict of interest issue. A company that Moyo co-founded before joining as CEO of Old Mutual, NMT Capital, also had Old Mutual as a preference shareholder.
During a board meeting which Moyo chaired, a dividend was announced that paid off the ordinary shareholders at the expense of the preference shareholder, which was in breach of the preference shareholding agreement. Moyo was paid R30 million (Sh226 million) out of that dividend while Old Mutual was paid nothing.
There were loud protestations of innocence from Moyo, saying that Old Mutual had its own director on the board of NMT Capital when that decision was made so “shauri yenu” (it’s your fault) and he should not be faulted for any conflict.
The board in a statement following Moyo’s departure said “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.”
So what’s the latest? In January 2022, the Johannesburg High Court dismissed Moyo’s R250 million claim for damages. The court found that Moyo had failed to produce any evidence that Old Mutual had wrongfully terminated his contract.
The rain continued to beat upon Moyo when last month, on May 16, a three-judge bench of the High Court dismissed Moyo’s applications to have the Old Mutual board declared delinquent and in contempt of court. The cherry on the icing on this litigation cake: the applications were dismissed with costs to be borne by Moyo.
“Old Mutual is pleased to put this matter behind us after three years of contentious litigation and to focus on growing the business well into the future, with good governance at all times its shining light,” the company said in a statement.
In summary: corporate governance 1 – impertinent tenacity 0. More importantly, a key lesson here is that if you’re going to sue a big company for wrongful dismissal, be sure you’re standing on the highest rung of the morality ladder.
