This was after Chanakira set tough conditions for Moxon as a way forward.
At the meeting held on March 2, Moxon demanded the demerger of KMAL as soon as possible, the appointment of directors to the Meikles Africa Ltd (MAL) board and the lifting of his specification.
But Chanakira urged him to consider returning home and face the music, which could mean imprisonment.
Chanakira, however, described the meeting, at the Mount Nelson Hotel in Cape Town, as "useful, frank and constructive".
Moxon demanded that the KMAL board should instigate a demerger of KMAL into Meikles Africa Ltd and Kingdom Financial Holdings (KFHL) as soon as possible.
After the demerger, Moxon demanded that all "ex-MAL" directors resign from the KFHL board and vice-versa.
In a letter dated March 5, Chanakira wrote to Moxon: "As a way forward for KMAL, you (Moxon) suggested the following: Meikles family companies would like and would vote for the demerger of KMAL into Meikles Africa Ltd (MAL) and KFHL."
Chanakira said he was agreeable to the proposal but suggested that Moxon first return to "engage the authorities" or meet with investigators in South Africa.
Chanakira said should the demerger occur, Moxon could lose more in the event of MAL getting entangled in government indigenisation schemes.
"A demerger of KFHL from KMAL albeit MAL would be extremely vulnerable to indigenisation laws, particularly Tanganda which you concurred would require a separate ownership structure," Chanakira said.
The documents to hand do not say, although Chanakira seems to believe, the farmland owned by Tanganda might be seized by the state. It is also not clear what ownership structure Moxon had proposed for the tea-maker to make it vulnerable to a takeover.
MAL controlled Tanganda Ltd, formerly a listed agricultural business.
Moxon’s other demands were that the MAL board be "reconstructed" since it would now be smaller after a spate of resignations and retirements.
He urged Chanakira to refrain from legal attacks and issuing press statements.
Should the need to deal with the press arise, he suggested, "only joint statements be released".
Chanakira proposed that Moxon engage the authorities by either returning to Zimbabwe or meeting with investigators in South Africa, thus placing Moxon between a rock and a hard place.
Chanakira has demanded, among other things, that the Cape Grace Hotel be sold to Moxon family companies Mentor Africa or Cool Bay at a value to be approved by unrelated shareholders.
In addition, Chanakira wants a settlement for indigenisation option rights held by Valley Field of up to 51% of KMAL, all outstanding salaries and benefits which the banker had not been paid since the inception of KMAL, and the return of US$22 million held at the RBZ from KFHL to MAL.
Chanakira said he had nothing to do with Moxon’s specification.
"I do however feel it appropriate to emphasise once again that notwithstanding any belief you may hold to the contrary, it is simply not within my power to ‘revoke’ the specification order granted against you.
In the context of a settlement I would be prepared to recommend to KMAL that it make appropriate
submissions to the relevant authorities with a view to having that order removed (subject of course to your full co-operation with the investigators)," said Chanakira.
Chanakira said in light of Moxon’s reluctance to return to Zimbabwe for fear of imprisonment, he (Chanakira) agreed to meet Zimbabwean authorities to pave a way forward.
"I (or in retrospect now, KMAL board, and you or your lawyers/representatives) meet with Zimbabwean authorities to negotiate a way forward. KMAL board negotiates for the recovery of funds from Cool Bay and Mentor Africa in shares and cash," added Chanakira.
Chanakira also wants KML to recover a R60 million loan to Cape Grace and its outstanding management fees amounting to R2 million.
Chanakira says in the letter that: "Any agreement that you and I may ultimately conclude in relation to our shareholding, would have to be in the best interests of KMAL and not, merely be convenient to us."
He promised to take a draft MOU, a truce from Moxon, to the board and seek guidance.
The dispute between Moxon and Chanakira marks the end of a long business relationship and eventual marriage between KFHL, who in the past have depended on their partner’s huge cash resources to finance key capitalisation concerns, and Meikles Africa Ltd in December 2007.
The merger sailed through last year resulting in the birth of KMAL.
Moxon and Chanakira first clashed after the former tried to unilaterally sell off the group’s prestigious Cape Grace Hotel at the V&A Waterfront in Cape Town.
After Chanakira led resistance to the sale of the asset, Moxon declared war on him and called for an EGM to have the banker, industrialist Callisto Jokonya and Rugare Chidembo, removed from the KMAL board.
Chanakira then accused Moxon of externalising US$18,6 million and R21, 2 million and alerted police to possible fraudulent conduct, which led to Moxon’s specification.
In another report, controversy surrounding Econet Wireless’ EGM last Friday is the culmination of years of bitter corporate battle between two of the Zimbabwe Stock Exchange’s largest investors.
Shareholders of Econet last Friday authorised a US$93,9 million funding package from South African-based Econet Wireless Group (EWG), Econet Wireless Holdings’ (EWH) largest shareholder.
The traditionally short EGM turned into a marathon that lasted until 7pm after Old Mutual and a group of foreign shareholders demanded a secret poll based on the number of shares held by each member present.
The shareholders also raised conflict of interest issues relating to chairman Tawanda Nyambirai’s role in the transaction. Nyambirai will step down at the next AGM.
With EWG and TSMI, who between them have more than 50%, unable to vote because of conflict of interest provisions, Old Mutual had hoped that its own shareholding of about 12%, and that of the other allied shareholders, would be enough to vote down the deal.
After the poll had been conducted, the vote in favour of the transaction was still much greater than that mustered by Old Mutual and its supporters.
Controversy erupted after Nyambirai said Old Mutual was not eligible to vote, because it had emerged that some of the institutions and investors they claimed to represent as an asset manager had not given them authority to vote on their behalf.
Old Mutual and Econet have been feuding for several years now. Last year, their feud broke out into an ugly fight when Old Mutual tried in vain to reverse the merger of Kingdom and Meikles.
The two giants are also known to be at opposing ends of the battle for KMAL, with Old Mutual backing John Moxon and his associates. Econet is the single largest shareholder in KMAL.
"It was inevitable such a fight would erupt at the Econet EGM. This is a battle between old money and new money," the head of a leading fund management firm said this week.
Market analysts trace the long-running battle between these two corporate giants to Econet’s decision to acquire, together with Renaissance, a controlling stake in FML, Old Mutual’s largest competitor in the life business.
Reflecting the bitterness between the two, an Econet executive told business digest yesterday: "We sold our shares in their company when we bought FML. They should do the same if they cannot deal with us in a professional manner," the executive said.
When shareholders and analysts arrived at the EGM they did not receive the results of the EGM. It was only after the request of a poll by some shareholders following a question and answer session that the complexion of the EGM changed and the role of the auditors, Delloite & Touche, became relevant as scrutineers to the voting process.
Mainly because a poll is a democratic process provided for in the Companies Act, the decision to hold the voting process by poll was passed by shareholders at the meeting.
At the time the poll was called for, the auditors made it clear that because they had not been forewarned that a poll would be conducted, they needed time to prepare the serialised ballot papers for voting by shareholders present at the EGM and time to verify names of shareholders and shareholding held by shareholders as per the register from First Transfer Secretaries.
For those shareholders who were not present, their proxy forms previously submitted to the company secretary prior to the meeting would stand in favour of the nominated proxies and still participate in the voting process through their nominated proxies.
"One would have appreciated the complexity of the exercise with the knowledge that Econet has just over 7 000 shareholders of which a number of them sent in proxies with their votes prior to the meeting and did not attend in person," said one analyst.
The company secretary at one point in the meeting informed shareholders that just over 200 proxies which comprised about 74,9% of the eligible votes had been received and the majority were in favour of the chairman.
Throughout the voting process and the verification exercise on the day of the EGM, the auditors are said to have done their work confined to a room where no unauthorised person was allowed to enter.
"Perhaps because of the complexity of the exercise and the need to exercise caution on accuracy, the auditors took several hours and it was subsequently decided in the meeting to adjourn to 1730 hours when the auditors had anticipated to have completed the collation of the voting," an industry told businessdigest.
Shareholders reconvened at 1730 hours on Friday for the results of the EGM. Unfortunately the auditors had not completed the exercise and the process dragged well beyond the anticipated time.
It was only after 1900 hours that the auditors came through with results of the voting process which they handed over to the chairman to announce to the shareholders.
The chairman announced the result of each resolution which had been carried by a margin in excess of 70% in favour of the resolutions.
After the chairman had declared the resolutions carried by a majority vote, Old Mutual Asset Managers and three other external shareholders who had initially called for the poll interjected the chairman declared that there were voting irregularities that warranted a cancellation of the meeting and nullification of the results.
The purported irregularities claimed by the dissenting shareholders centred on the following two issues: Old Mutual Asset Managers shares had been excluded in the results announced by the chairman; and the dissenting shareholders alleged that the auditors had inflated the shares eligible to vote. Dissenting shareholders alleged that only 49 million shares were eligible to vote and as a result the resolutions according to their calculations should have been rejected.
It has since been established from the announcement made by Econet that Old Mutual Asset Managers submitted a proxy and poll form which claimed to have 17 420 408 Econet Wireless Holdings Ltd shares.
The register however shows that Old Mutual Asset Managers only has 1 516 shares and could only validly claim votes for shares reflected in the register in their name.
"It is mind-boggling that the oldest asset manager in the country could just think they could assume to have rights over shares that do not belong to them and vote as they wish over those shares without seeking the relevant proxies that should have been presented at the EGM to show that they had been properly authorised to exercise discretionary voting rights over the shares," an analyst said.
This raised questions if proper procedures were done by Old Mutual Asset Managers of consulting their clients. Despite the alleged irregularity on the part of Old Mutual Asset Managers, some market watchers are said to have "swept this indiscretion under the carpet".
"The allegation of the auditors having inflated the eligible shares to vote is a serious allegation that should be substantiated," an analyst said.
According to Old Mutual Asset Managers, the number of shares eligible to vote were based on the attendance register that had a number of shares and the name of attending shareholders which shareholders filled in as they attended the EGM on Friday.
The EGM was held to seek approval for network stabilization and expansion. "If dissenting shareholders had something to the contrary they should have suggested another mechanism to raise money for the company to expand the network," said an analyst. The Independent