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LONDON BRIEFING: Old Mutual Fires Suspended CEO In Row Over Dividends

(Alliance News) - Anglo-South African financial services firm Old Mutual has fired Peter Moyo as ...

Alliance News 18 June, 2019 | 8:09AM
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(Alliance News) - Anglo-South African financial services firm Old Mutual has fired Peter Moyo as chief executive, it announced Tuesday, following a conflict of interest.

Moyo had been suspended in May following a "material breakdown of trust and confidence". Moyo had declared these interests, Old Mutual said, but the parties disagreed on how they had been managed.

One of the issues was a ZAR115 million dividend paid by investment firm NMT Capital, of which ZAR30.6 million went to Moyo's personal investment vehicle. Old Mutual also has a stake in NMT Capital, and Moyo is a founder and non-executive director.

Old Mutual said: "These dividends were declared in breach of Old Mutual's rights as preference shareholder, since arrear preference dividends were unpaid at the time and, at the time of the second dividend declaration, the preference share capital was redeemable.

"The preference share capital remains unpaid. Moyo chaired the board meeting of NMT Capital at which the second ordinary dividend of ZAR105 million was declared."

Old Mutual did not get an "acceptable" explanation as to why dividends were declared by NMT Capital while debt was owed to Old Mutual, leading to the "breakdown in trust and confidence" with Moyo.

Since his suspension, Moyo has not acted appropriately, Old Mutual also charged, meaning his contract has now been terminated.

Acting CEO Iain Williamson will continue in the role while a new CEO is sought.

The stock was up 2.2% early Tuesday in London.

Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: up 0.1% at 7,363.23
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Hang Seng: up 1.2% at 27,555.82
Nikkei 225: closed down 0.7% at 20,972.71
DJIA: closed up 22.92 points, 0.1%, at 26,112.53
S&P 500: closed up 0.1% at 2,889.67
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GBP: down at USD1.2535 (USD1.2559)
EUR: flat at USD1.1231 (USD1.1233)

Gold: up at USD1,345.40 per ounce (USD1,340.19)
Oil (Brent): down at USD60.69 a barrel (USD61.66)

(changes since previous London equities close)
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ECONOMICS AND GENERAL
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Tuesday's Key Economic Events still to come

Two-day US Federal Open Market Committee Meeting starts.

1100 CEST Germany ZEW indicator of economic sentiment
1000 CEST Germany Ifo economic forecast summer report
1100 CEST EU foreign trade
1100 CEST EU harmonised consumer price index

0830 EDT US new residential construction
0855 EDT US Johnson Redbook retail sales index
1630 EDT US API weekly statistical bulletin
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The US will send about 1,000 additional troops to the Middle East, Acting Secretary of Defense Patrick Shanahan said Monday, linking the move to last week's attacks on two oil tankers in the Gulf of Oman that the US says Iran carried out. Shanahan said the additional forces are "for defensive purposes to address air, naval and ground-based threats in the Middle East." The action also will help ensure the safety of US military personnel working in the region and protect US national interests, he added. He reiterated that the US does not seek conflict with Iran ,but said the US "will continue to monitor the situation diligently and make adjustments to force levels as necessary given intelligence reporting and credible threats."
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The battle for the Tory party crown in the UK is revving up with a fresh round of voting in the leadership stakes as Boris Johnson is due to break cover and take part in television debates. Tory MPs will vote in the second bout of the contest to select Britain's next prime minister on Tuesday ahead of a live TV debate that will feature the front-runner and former foreign secretary, Johnson. Candidates need to gain at least 33 votes from MPs to remain in the race to reach the final run-off, which will see some 160,000 Tory members select the next prime minister. If all candidates pass the 33-vote threshold, the one with the lowest total will be eliminated and by the end of the week, four of the six current riders will be forced out, leaving the final two to go head-to-head for votes from the Tory grassroots.
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UK Chancellor of the Exchequer Philip Hammond is prepared to resign over Theresa May's plans to spend billions of pounds on projects to shore up her legacy, it is understood. Senior government sources have told the Press Association that tensions between Treasury and Number 10 officials have reached boiling point over the prime minister's spending intentions. Hammond is understood to be so against the plans that he is prepared to quit the government in what would be an extraordinary move just weeks before the PM leaves office. Tensions have surfaced over May's intention to spend up to GBP9 billion per year over three years on education, totalling GBP27 billion, including plans to build new schools and pay teachers higher wages, the well-placed source said. The Chancellor is thought to be particularly angry that the plans could tie the hands of her successor, which the source said was "immoral" and "irresponsible".
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EU ministers for European Affairs are due on Tuesday to consider opening membership talks with Balkan hopefuls Albania and North Macedonia, although their hands are tied as Berlin has not yet received the green light domestically to back the move. The EU's enlargement policy serves as a tool to encourage neighbouring states to carry out pro-democratic reforms, offering the prospect of membership in return.
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US President Donald Trump on Tuesday is set to announce his candidacy for a second four-year term at a rally in Florida. Trump's campaign for re-election in 2020 chose the 20,000-seat Amway Center in the centre of the state to make the announcement. The event is scheduled to start at 8 pm local time. A poll conducted Sunday by Fox News showed Trump trailing former vice president Joe Biden, the front-runner among a crowded field of Democrats, by 10 points. The poll also shows him nine points behind Senator Bernie Sanders, another leading contender. Trump tweeted about the polls on Monday, suggesting they were fake. "Only Fake Polls show us behind the Motley Crew. We are looking really good, but it is far too early to be focused on that. Much work to do! MAKE AMERICA GREAT AGAIN!"
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BROKER RATING CHANGES
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BARCLAYS CUTS INTERCONTINENTAL HOTELS TO 'UNDERWEIGHT'('EQUAL WEIGHT') TARGET 4400(4737) PENCE
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CITIGROUP CUTS EVRAZ TO 'SELL' ('NEUTRAL') - TARGET 530 (611) PENCE
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CREDIT SUISSE CUTS EXPERIAN TO 'NEUTRAL' ('OUTPERFORM') - TARGET 2360 (2250) PENCE
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COMPANIES - FTSE 100
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Equipment rentals firm Ashtead Group reported a strong set of annual results for financial 2019, while also announcing plans for a GBP500 million share buyback. For the financial year ended April 30, revenue rose 19% to GBP4.49 billion from GBP3.71 billion the year before, and pretax profit rose 20% to GBP1.06 billion from GBP862.1 million. The company said it continued to enjoy strong end-markets in North America and was executing well on its strategy of organic growth supported by targeted bolt-on acquisitions. Ashtead proposed a final dividend of 33.5 pence, bringing a total payout 40.0 pence, up 21% from 33.0p in financial 2018. It said it will spend a minimum of GBP500 million on share buybacks in financial 2020. "Our business continues to perform well in supportive end-markets. Looking forward, we anticipate a similar level of capital expenditure in 2019-20, consistent with our strategic plan. So, with our business performing well and a strong balance sheet to support our plans, the Board continues to look to the medium term with confidence," said Chief Executive Brendan Horgan.
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AstraZeneca and Merck & Co said the European Commission has approved Lynparza as a first-line maintenance treatment for women with BRCA-mutated advanced ovarian cancer.
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COMPANIES - FTSE 250
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Multi utility services provider Telecom Plus said it delivered annual results for financial 2019 in line with expectations. For the year ended March 31, revenue rose 1.5% to GBP804.4 million from GBP792.9 million the year before, and pretax profit increased 4.9% to GBP43.0 million from GBP41.0 million. Adjusted pretax profit increased by 3.7% to GBP56.3 million from GBP54.3 million in 2018. The company said that in the absence of "unforeseen circumstances" it expect adjusted pretax profit for financial 2020 to be between GBP60 million and GBP65 million. Telecom Plus raised its annual dividend 4.0% to 52.0p from 50.0p last year and expects to raise its payout another 10% to 57p in financial 2020.
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Aerospace and defence components engineer Meggitt has signed a contract with US aircraft company Textron for the supply of fire protection systems on the Cessna Denali and Skycourier platforms. Deliveries are set to commence later this year. Chris Allen, president of Airframe Systems at Meggitt, said: "Meggitt has a longstanding relationship with Textron and we value the trust they have placed in us to deliver world-class fire protection systems."
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COMPANIES - OTHER MAIN MARKET AND AIM
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Woodford Investment Management continued selling holdings in order to raise funds for redemptions. It has cut its stake In Oakley Capital Investment to 7.35% From 19.39%. The 12% stake sold is worth about GBP55 million. Separately, Oakley Capital Investment said Non-Executive Director Peter Dubens bought 5.3 million shares at 220.0p each, worth almost GBP12 million.
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Tuesday's Shareholder Meetings

Coca-Cola HBC
Evraz
Plus500
Horizon Discovery Group
Clearstar
Ascent Resources
Ergomed
Rosenblatt Group
Westminster Group
Strategic Minerals
Netscientific
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By Tom Waite; thomaslwaite@alliancenews.com

London Briefing is available to subscribers as an email newsletter. Contact info@alliancenews.com

Copyright 2019 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Experian PLC 2,442.00 GBX 2.52
InterContinental Hotels Group PLC 4,832.50 GBX 1.12
EVRAZ PLC 365.10 GBX 4.02 -
AstraZeneca PLC 7,275.00 GBX 0.37
Old Mutual Ltd Ordinary Shares 108.40 GBX 1.21 -
Old Mutual Ltd Ordinary Shares 2,046.00 ZAC 0.84 -

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