IDC takes aim at Moyo
Now former Old Mutual CEO faces claim for millions over failed investment
● Peter Moyo’s NMT Capital, the company at the centre of his conflicts with Old Mutual, is facing a claim of more than R150m from the Industrial Development Corporation (IDC).
While Moyo, who was dismissed as CEO of Old Mutual in June, continues his court battle with the life insurer, the IDC now joins Old Mutual in the queue for payment from NMT.
Both sent letters of demand last week to the company co-founded by Moyo as Amabubesi in the early 2000s.
The IDC is threatening legal action to recoup R157m. This amount was a guarantee provided by NMT after the IDC had funded an investment by an NMT subsidiary in the construction sector.
A disastrous few years in the construction sector wiped out the IDC’s investment.
By November last year, the IDC and NMT reached a settlement, but the corporation has since terminated the agreement and now wants its money, because it claims NMT had not played open cards.
ENS Africa, the IDC’s lawyers, in a letter last week urged NMT to pay up, “failing which our client will have no other option but to consider its legal remedies against the directors (in their personal capacities) and the shareholders”.
The letter also alleges that NMT’s directors had breached their fiduciary duties in their dealings with the IDC and had acted unlawfully in declaring and paying dividends to shareholders.
Several attempts to reach NMT management for comment were unsuccessful. Moyo himself did not respond to a request for comment.
But the IDC confirmed that it had not been paid since sending the letter of demand. “Settlement has not taken place yet,” IDC CEO TP Nchocho told Business Times, adding: “We want full performance.”
Old Mutual said on Friday that this week it received R46.5m from NMT as a redemption amount in satisfaction of its preference shares.
The life insurer in May suspended Moyo as CEO and later terminated his employment due to a breakdown of trust and confidence over conflicts of interest.
One particularly sore point was NMT’s decision to distribute dividends to ordinary shareholders — from which Moyo benefited — while payments to preference shareholders such as Old Mutual were still in arrears.
Moyo went to court and won his case for reinstatement as CEO, only to be dismissed again by Old Mutual last month.
In the latest twist, the former CEO is accusing the life insurer of violating the constitution by not allowing him to return to work and sacking him a second time.
But the nearly R50m that NMT transferred to Old Mutual this week does not settle the matter completely.
The life insurer also wants a further R21.6m, according to a letter of demand from Old Mutual’s lawyers, Bowman Gilfillan, that was seen by Business Times.
This is the amount Old Mutual says NMT owes it under the guarantee for the indebtedness of a company called Amabubesi Capital Travelling.
Settlement has not taken place yet. We want full performance
TP Nchocho
IDC CEO
In the same letter, Old Mutual urges NMT to pay the IDC’s R157m claim. The life insurer is also demanding that NMT and its directors supply it with current information reflecting the financial position of the company, including its assets and liabilities.
The spat between Moyo and Old Mutual has dragged on in public for more than three months. Old Mutual’s share price has dropped almost 20% in that time.
Some of the life insurer’s large shareholders have urged it to settle as soon as possible, but its board has insisted it wants a public apology from Moyo.
The former CEO’s legal team argued in court that Moyo had been victimised by the company. This, they alleged, was for speaking out against board chair Trevor Manuel’s conflicts of interest and against Old Mutual’s payment of legal fees related to the former finance minister.
Old Mutual says it footed the legal bills only where it was in the company’s own interest to do so, and denied any wrongdoing on the part of Manuel.
Moyo has also denied any wrongdoing.