Old Mutual shows CEO the door
Old Mutual shows CEO the door
Published Date: 2019-05-27 | Source: Stephen Gunnion | Author: Stephen Gunnion
The life assurer has separated with CEO Peter Moyo over what it called a breakdown in trust.
Old Mutual first suspended then said it had decided to separate with CEO Peter Moyo on Friday due to a "material breakdown in trust and confidence" between him and the board of the life assurer over the management of conflicts of interest in business relations with related parties.
It said the business relations, which were later reported to be his interest in NMT Capital, a company he co-founded and remains a non-executive director of, pre-existed his appointment as CEO of the group and were considered at the time to be manageable. Old Mutual is an investor in NMT. The competing interests were regulated in his contract of employment and disclosed in its pre-listing statement and annual financial statements last year.
The group said the suspension followed various engagements with Moyo and was effective immediately. It said chief operating office Iain Williamson would assume the role of acting CEO.
Moyo rejoined Old Mutual in June 2017 as CEO of its emerging markets business and became CEO of Old Mutual Limited a year ago following the managed separation of London-based Old Mutual Plc's component parts. He's also on the board of Nedbank. He left Old Mutual in 2005 for the CEO role at Alexander Forbes but quit in 2007 following a difference of opinion between him and the board of the pension funds administrator.
Separately, the group said it was at risk of missing its goal of growing its results from operations (RFO) by GDP +2% over the three year target period due to negative RFO growth last year and poor economic conditions this year in its key markets.
Life annual premium equivalent (APE) sales grew 4% to R2.95 billion in the three months to end-March as it attracted new business from customers. Gross flows of R39.3 billion were 10% behind the prior year due to lower flows in Wealth and Investments and lower single premium sales in Old Mutual Corporate. It reported negative net client cash flow of R1.1 billion, reflecting lower net flows in its Wealth and Investments businesses. Runs under management of R1,084 billion were in line with equity market returns in SA, it said.
Its shares fell as much as 6% before recovering slightly to close 3.2% down at R21.
$JSEOMU Old Mutual suspends CEO citing breakdown of trust, word is that Peter Moyo (CEO) has conflict of interest which he is not willing to relinquish. A longer statement will be issued in due course. Peter is no stranger to controversy, remember Alex Forbes.-- Runyararo Mherekumombe (@runyamhere) May 24, 2019
Old Mutual Chair Trevor Manuel tells shareholders that suspending Peter Moyo was one of the hardest things many of the board members had to do because of personal relationships. But the board did it in the interest of good governance @cnbcafrica-- Fifi Peters (@FifiPeters) May 24, 2019