The group said on Friday that the separation was a result of a material breakdown of trust and confidence, which occurred due to the management of conflicts of interest in business relations with related parties.
“These business relations pre-exist the appointment of Mr Moyo as chief executive of OML and were considered at the time of the appointment to be manageable,” the group said.
Moyo rejoined Old Mutual in June 2017 as chief executive of Old Mutual Emerging Markets (OMEM) and later Old Mutual Limited after a managed separation from Old Mutual plc.
Moyo led the group in June last year, when it moved its primary listing to the JSE after it was separated from the London-based group.
When Moyo was appointed chief executive in 2017, Old Mutual set up a protocol regarding an earlier R291 million investment made by the company in Moyo’s NMT Capital. Old Mutual disclosed the link and a process to manage it when it appointed Moyo.
“There is actually absolutely no wrongdoing on my part,” Moyo told Reuters, adding that the disagreement was the result of differences over the approach to engagement rather than the relationship itself.
A spokesperson for the company said Old Mutual chairperson Trevor Manuel would provide more information at the insurer’s annual general meeting on Friday afternoon.
The stock lost ground on Friday morning as it opened weaker, declining to R20.67 a share. However, it regained some losses in the afternoon before closing at R21 at the end of the day.
Ron Klipin, a senior analyst at Cratos Capital, said the suspension had come as a surprise.
“It is possible that OMU might suffer reputational damage as a result of Moyo’s suspension, but we expect to see a full investigation being conducted on what really happened that led to a breakdown in the relationship between the parties,” Klipin said.
He added that it also appeared that there was a conflict of interest that could not be adequately resolved.
The group said the competing interests were regulated in the chief executive’s contract of employment and were disclosed in the OML pre-listing statement and the annual financial statements.
“Unfortunately, the board and Mr Moyo have disagreed materially on how the conflict of interest has been managed, resulting in a breakdown in the required mutual trust and confidence,” the group said.
Kokkie Kooyman, a portfolio manager at Denker Capital, also said the announcement came as a total surprise to him and perhaps the markets.
“However, the suspension should not affect the operations.
“But that also depends on the reasons for his suspension. The share price’s decline during the day is definitely caused by Moyo’s suspension, and when a company suspends its chief executive it means there is a lot of uncertainty. But Old Mutual is big enough to ride that out,” Kooyman said.
The board has appointed its chief operating officer, Iain Williamson, as acting chief executive.
Moyo’s suspension coincided with the group releasing its operating update for the three months to the end of March.