July 30, 2019 / 2:09 PM / 3 months ago

UPDATE 3-S.African court gives Old Mutual CEO his job back, for now

* Old Mutual to appeal ruling to reinstate fired CEO

* Judge blocked insurer from seeking replacement

* Old Mutual to keep interim CEO until appeal heard (Updates with Old Mutual appeal, details)

By Emma Rumney

JOHANNESBURG, July 30 (Reuters) - Shares in South Africa’s Old Mutual fell more than 5% on Tuesday after a High Court judge ruled that the company’s dismissal of CEO Peter Moyo earlier this year was unlawful and that he must be temporarily reinstated.

The judge blocked South Africa’s No.2 insurer, which suspended Moyo in May and fired him in June after a disagreement over an alleged conflict of interest, from taking steps to replace him while a fuller case against his dismissal was heard.

Old Mutual, whose shares closed down 5.6%, said it would appeal the ruling and the company would continue to be led by an interim CEO until the appeal was heard.

“Both the suspension and subsequent dismissal were unlawful,” according to a ruling by Johannesburg High Court Judge Brian Mashile, which was read out by a different judge.

Mashile ruled that Old Mutual had not followed the correct contractual procedure. He also ruled that Moyo be temporarily reinstated and that Old Mutual pay his court costs.

Old Mutual said Moyo’s dismissal was lawful.

“While the company respects the court and its processes, it now plans to appeal to a higher court,” it said in a statement, adding that it had informed Moyo he was not required or permitted to return to work pending the appeal’s outcome.

It said interim CEO Iain Williamson would continue to lead the company after the ruling, which means a further delay in resolving a dispute that has hit the image of one of South Africa’s oldest companies.

Moyo, who punched the air in celebration on hearing the ruling, told reporters he would return to his office on Wednesday. He has also said he wanted to be permanently reinstated or receive unspecified damages, and have Old Mutual’s directors disqualified from their positions.

If reinstated, it would mean the company being led by a CEO who is at loggerheads with the board.

According to court papers, Moyo accused Chairman Trevor Manuel, a prominent businessman and former finance minister, and other members of the board of breaching governance principles.

Moyo said his effort to raise concerns about these breaches were the reason for his suspension and dismissal.

Old Mutual said its directors had acted in line with their fiduciary duties at all times and the dispute would not affect the company’s operations.

The insurer previously said it was considering whether to claw back any part of the 35.5 million rand ($2.5 million)already paid to Moyo as part of his remuneration.

He is currently set to be paid another 4 million rand in fixed pay for his six-month notice period.

$1 = 14.1883 rand Reporting by Emma Rumney; Editing by Kirsten Donovan and Edmund Blair

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