September 6, 2019 / 12:44 PM / 15 days ago

UPDATE 2-Fired Old Mutual boss plans return to work as court rules against insurer

(Adds details, trader and analyst quote, updates shares)

By Emma Rumney

JOHANNESBURG, Sept 6 (Reuters) - Sacked Old Mutual chief executive Peter Moyo intends to return to his desk next week, his lawyer said on Friday after a Johannesburg court dismissed the South African insurer’s attempt to block his temporary reinstatement.

Moyo, who was fired in June in a dispute over a conflict of interest, was temporarily reinstated by the court in July but Old Mutual said he could not return to work while it appealed.

South Africa’s second largest insurer had hoped to block Moyo’s reinstatement, arguing that his temporary reinstatement would in effect be permanent as a court case against his dismissal would take so long.

But Judge Brian Mashile on Friday ruled in favour of Moyo, whose lawyer confirmed the ruling and told Reuters the chief executive intended to return to work on Monday.

Moyo has applied to have Old Mutual’s board declared delinquent in an increasingly messy public battle that has frustrated investors and knocked around 15% off the 173-year-old insurer’s share price.

The board has repeatedly said a breakdown in relations and trust with Moyo is such that it is untenable for him to continue as CEO, and fired him for a second time in August.

An Old Mutual spokeswoman said this second sacking would prevent Moyo from returning to work, adding that Old Mutual had also been granted leave to appeal.

Iain Williamson is running Old Mutual as interim CEO and the insurer has said the dispute is not disrupting its operations.

REPUTATIONAL BLOW

Old Mutual shares were up 0.82% at 1252 GMT on Friday.

Warwick Bam, insurance analyst at Avior Capital Markets, said Friday’s ruling probably did not have much significance on the longer case, but it was another reputational blow. “That’s the disappointment: the reputational damage for the management team and how poorly they have dealt with this, and how wrong they have been in their communication.”

Greg Davies, trader at Cratos Capital, said investors were likely to be pleased Old Mutual could appeal to another judge.

The market likely see the dispute as a “short-term, solveable problem”, he said.

Moyo has also applied twice to have Old Mutual declared in contempt of court over its refusal to allow him back to work and its second attempt to sack him.

In the longer-term, he is seeking to be permanently reinstated or granted damages from the insurer in a fuller case against his dismissal.

In its argument against his temporary reinstatement, Old Mutual said this process would likely last the duration of his remaining term at the company. (Reporting by Emma Rumney; editing by Jason Neely, Emelia Sithole-Matarise and Alexander Smith)

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