Old Mutual’s share price (LON:OML) has fallen deep into the red in London this Friday as the South Africa-based group announced that it had decided to part ways with its chief executive. The company pointed to “a material breakdown of trust and confidence” as a result of conflict of interest.
As of 14:43 BST, Old Mutual’s share price had given up 3.28 percent to 114.96p. The group’s shares have lost more than 12 percent of their value over the past year.
Old Mutual share price down as group sacks CEO
Shares in Old Mutual have come under pressure as the asset manager announced in a statement today that it had decided to separate with its CEO Peter Moyo and appoint the company’s chief operating officer Iain Williamson as acting CEO.
“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,” the company explained in the statement, adding that while these business pre-existed Moyo’s appointment to the top job, he and the board had “disagreed materially on how the conflict of interest has been managed”.
Suspended CEO points to ‘no wrongdoing’ on his part
While Old Mutual did not elaborate on the conflict of interest, Moyo told Reuters by phone that his suspension related to how different parties thought Old Mutual should engage with NMT Capital, which he founded and in which an Old Mutual subsidiary is an investor.
“That relationship has always been there from the day I started and it was properly disclosed,” he explained, as quoted by the newswire, adding that there was “actually absolutely no wrongdoing on my part”.
Bradley Preston, chief investment officer at Mergence Investment Managers, which owns Old Mutual shares, told Bloomberg News that the question was “what does this mean for Moyo’s future and if he were to leave would that mean a change in strategy”.