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Peter Moyo’s bid to censure the conduct of Old Mutual’s 14-member board for his tumultuous axing as the insurer’s CEO has hit a procedural snag.

In a small victory for Moyo yesterday, the high court in Johannesburg has ordered that the second letter terminating his employment contract, which was issued by Old Mutual on August 21, can be admitted as evidence in his application to charge the insurer’s board for contempt of court.

A contempt of court offence relates to being disobedient or disrespectful towards a court of law regarding its judgments/orders. If the high court finds members of Old Mutual’s board to be in contempt of court, they might face hefty fines or imprisonment.

Moyo is pushing for the latter, saying Old Mutual board members, including chairman Trevor Manuel, need to argue why they should not be imprisoned for six months or a period determined by the court.

Moyo wants the insurer’s board to be charged for contempt of court because he wasn’t allowed to return to his office even though the high court ordered on July 30 that he should be temporarily reinstated.

The latest high court order, which was written by Judge Brian Mashile, protracts Moyo’s court battle against Old Mutual because another court proceeding will begin. Mashile ordered that Old Mutual board members should be joined in Moyo’s contempt of court application.

“In the result, where one seeks an order holding a company criminally liable, the directors or some senior employees must be joined to the application because a company being a legal persona that derives its existence from a statute cannot be imprisoned,” read Mashile’s order.

“As such, it was not only critical but also imperative for the applicant [Moyo] to join the non-directors to the application if he had hoped to find the first respondent criminally liable with possible imprisonment flowing therefrom.”

Old Mutual fired Moyo on June 18, accusing him of wrongfully pocketing dividends worth R30 million linked to NMT Capital, an investment holding company he co-founded, and in which Old Mutual holds a 20 percent stake.

When Old Mutual fired Moyo, the insurer issued him with a letter terminating his employment contract, which he successfully challenged at the high court. On August 21, Old Mutual reiterated that it doesn’t want Moyo back and issued him with a further notice terminating his employment contract with SA’s second-largest insurer — effectively firing him again.

Mashile has admitted the second letter of termination as evidence under Rule 6 (5) (e) of the Uniform Rule of Court in Moyo’s application to charge Old Mutual board members with contempt of court.

In admitting the second termination letter, Mashile said Moyo has satisfied certain court requirements including, among other things, that he did not have the letter when he launched his contempt of court application early in August. Mashile also said the letter is material to Moyo’s application.

Court timelines

Old Mutual and its board members will have to submit affidavits to the court within the next ten days in response to Moyo’s second letter of termination.

Within five days of Moyo receiving Old Mutual’s affidavit, he will have to respond to it.  Then a court hearing will be set aside within 30 days, where Moyo’s application for a contempt of court order will be argued by his legal counsel and that of Old Mutual.

Old Mutual previously argued the second letter of termination was not included in Moyo’s contempt of court proceedings — thus the directors couldn’t defend themselves in court. The insurer wanted Moyo to launch a fresh court application that separately challenged the second termination letter.

Mashile rejected this saying it “would amount to piecemeal litigation resulting in extravagant legal costs and wastage of valuable time.”

Old Mutual’s spokesperson Tabby Tsengiwe said the insurer will comply with the latest order and submit its affidavits in line with the time frames given by Mashile.

Eric Mabuza, Moyo’s lawyer, said Old Mutual board members will now have to explain in court “why the second termination letter doesn’t constitute contempt of court.”

Old Mutual is appealing against the July 30 order and believes that Moyo should not return to work at the insurer’s headquarters in Sandton until the court decides on its appeal. The appeal is expected to be heard between November 4 and December 6.