SOME shareholders of the Empowerment Corporation, a 40 percent shareholder in Telecel Zimbabwe, say there was no agreement between EC and Brainworks Capital regarding the sale of EC’s stake in the country’s second biggest mobile phone company.
As the shareholding saga deepens, Dr Jane Mutasa, a significant founding shareholder in EC, said that she was not part of the purported meeting that is said to have approved the transaction to sell the stake to the locally registered private equity firm.
Magamba Echimurenga, another founding EC shareholder, said the planned disposal of EC’s shareholding in Telecel was illegal as it was being pushed through illegitimate structures in an elaborate scheme designed to swindle them out of their shares.
Magamba Echimurenga chairman Mr Andrew Ndlovu said exiled businessman James Makamba’s Kestrel Corporation, Dr Mutasa-led women’s group IBWO, her investment vehicle Selpon Investments and Magamba Echimurenga were the only fully paid up members of EC with legal authority to make decisions on behalf of the entity.
“We were never part of that meeting (which allegedly approved the sale of EC’s stake in Telecel). Only fully paid up members have the legal authority to decide on that in a legal procedure and according to the Companies Act,” Mr Ndlovu said yesterday.
Mr Ndlovu said other original prospective shareholders in EC, namely Zimbabwe Farmers’ Union, National Liberation War Veterans’ Association of Zimbabwe, Integrated Engineering Group (fronted by Leo Mugabe) failed to pay for their allocation.
He added that there were illegal attempts to sneak back in beneficiary groups that failed to pay for their shares and legalise their entitlement while at the same time booting out legitimate shareholders.
“They may think that this is the end of the story, but what they do not know is that it could be the beginning of unending legal battles in Empowerment Corporation,” he said.
Mr Patrick Zhuwao, whose role as chief executive of EC is being contested, told this paper last Friday that shareholders had accepted the offer after taking into account that the company was operating without a licence after failing to pay for its renewal.
He said the meeting also resolved to revert to the original shareholding structure that prevailed when the Government issued Telecel with a licence in 1998 to empower locals.
Dr Mutasa said she was never part of the meeting that approved the sale and that whatever was agreed at the purported extraordinary general meeting was illegal.
“We were not part of that meeting and whatever was agreed on is null and void,” said Dr Mutasa.
“We were given the licence by His Excellency President Mugabe to empower Zimbabweans and why the talk about selling the shares? I don’t even know who Brainworks is and someone is now claiming that I have agreed to sell my shares.
“Someone is playing games and it’s not fair. It is not in the best interest of indigenisation.
“After all, if any partner decides to sell their shareholding, the first right of refusal should be offered to existing shareholders. We want the right procedures to be followed,” she said.
Dr Mutasa said there was nothing wrong with accommodating other supposed beneficiaries who failed to pay for their shares, but it should be done properly.
Dr Phillip Chiyangwa, another founding shareholder who later sold his stake, said any actions on Telecel should be co-ordinated between the Government and EC. He said the licence was given to EC primarily as a way of empowering indigenous Zimbabweans.
“So any move to reverse that arrangement should be dismissed with the contempt it de- serves.
“What should be happening in Telecel is reconstitution of the shareholding of the foreign partner who has failed to pay for licence renewal. This does not make sense at all,” said Dr Chiyangwa.
“What Brainworks needs to understand is that the licence was issued as a way of broad-based empowerment of Zimbabweans and that arrangement should be maintained,” he said.
Dr Chiyangwa added that although there were shareholding wrangles in EC, any measures to resolve them should be taken in the spirit of maintaining that objective.
Efforts to get a comment from Mr Zhuwao were fruitless by the time of going to press.