Presumably one or other of the parties in the Old Mutual vs Peter Moyo punch-up has already approached the competition authorities, either to secure approval for a takeover or to block that same takeover.
That might seem a bit of a stretch but doesn’t the whole thing seem like a seriously big stretch? An enormously well-paid former CEO, who had an overarching duty of trust to his employer, wants his job back; not only that, he wants the entire nonexecutive board declared delinquent, which would mean they would have to be fired. He is using the high court to give effect to this plan.
Hold on, says one competition pseudo expert, the high court may not have jurisdiction in the matter; nor perhaps even the labour court.
The thing is, if Moyo’s legal team has launched an action that could end up with the removal of the entire nonexecutive board, then we might have a takeover/merger on our hands.
Section 12 of the Competition Act deals with the definition of a merger and describes when a person is deemed to control a firm. Section 12 (c) states that a person controls a firm if that person is able to appoint or to veto the appointment of a majority of the directors of the firm.
The first obvious point is that Moyo’s plan does not directly involve appointing a majority of the directors. But if he is successful in removing the existing directors then he has essentially controlled the inevitability of the appointment of an entirely new board, save two executive directors.
And if, as Moyo’s plan requires, he has been reinstated as CEO by the time a new board is appointed, we can assume he will be able to play a key role in their selection.
Old Mutual’s answer had the delightful, for journalists, feel of a novel as much as a legal document
It will of course be entirely down to the shareholders to decide if they want to back that selection.
But by then — we’re talking months, possibly years down the track — the shareholders will be so fatigued they’ll support anyone just to put an end to it all.
Anyway, as with so much of present-day SA, there is scope in this battle for at least several months of legal fees if the lawyers play their cards right. A little detour down the competition route would be just the trick.
No doubt Old Mutual was hoping the South Gauteng High Court, after taking one look at both sides’ papers, would rule it wasn’t an urgent matter: "Come back to me in a few years."
This would have removed the spat from the public eye and thus reduced Moyo’s negotiating power. Not that Old Mutual seems in much of a rush to settle things. Its answering affidavit had the delightful, for journalists, feel of a novel as much as a legal document, with every one of Moyo’s barbs matched.
Given the passion involved on both sides it’s hard to imagine anyone thought reinstatement was a possibility. Even the labour court is reluctant to consider reinstatement at any sort of senior level.
Getting the parties to talk about settlement rather than reinstatement might have been more productive.
Of course the question is whether the (surely inevitable) settlement will include Old Mutual agreeing not to go after Moyo’s investment company, NMT Capital, for deprivation of its shareholder rights.
So much for controlling conflicts of interest. Outside the echo chamber that is the modern boardroom such control never sounded plausible.
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