The alliance between Masiyiwa and Moxon is widely seen as marking a turn in relations between the Econet boss and his long-time friend, Chanakira, who is not happy with plans to de-merge Kingdom from the assets predominantly owned by the Meikles family.
This week Econet Wireless moved to end the long-standing dispute between Chanakira, the group chief executive officer (CEO) and Moxon by requesting the board of KMAL to call for an extraordinary general meeting (EGM) at which shareholders will be asked to vote for a de-merger of the group.
At the EGM, Econet is expected to vote for the de-merger along with a cluster of companies linked to the specified former KMAL chairman.
Under the proposed de-merger, KFHL will be spun out of KMAL, which will then revert back to being called Meikles. The shareholders of Meikles will own the same shareholding in KFHL as before. KFHL will then be re-listed on the Zimbabwe Stock Exchange.
Econet Wireless Zimbabwe chairman, Tawanda Nyambirai, has formally sent a requisition to the KMAL board to call the meeting within 21 days. With a shareholding in excess of 10 percent, Econet has the authority to call such a meeting, in terms of the law, and the board must comply. In the notice, Nyambirai advises the KMAL board that he has secured the support of shareholders with more than 51 percent of the shareholding, who will vote in favour of the resolution.
This means that the de-merger is now inevitable, and will go ahead.
In his letter to the company, Nyambirai makes it clear that Econet Wireless’ proposal has nothing to do with the causes of the dispute, but is simply aimed at ensuring the businesses are able to operate efficiently, and that the interests of shareholders are protected.
If the resolutions are approved by the shareholders, Chanakira will go back to running KFHL, but Meikles is expected to appoint a new CEO. All the directors appointed by Kingdom to the KMAL board will be required to resign, and those appointed to Kingdom by Meikles will also have to resign.
The two companies will have exactly the same shareholders holding the same percentage shareholding in each company.
There will therefore be no prejudice to any shareholder currently holding KMAL shares.
KMAL – a 2007 merger between KFHL, Meikles Africa Limited, Tanganda Tea Company and the Cotton Printers – has been in the news for the wrong reasons altogether.
The group is at the centre of a boardroom fight between Moxon, whose investment vehicles control 43 percent of KMAL and Chanakira, backed by Africa First ReNaissance Corporation.
Moxon took the fight to the KMAL CEO when he tried to stage a palace coup through an EGM against Chanakira and two other directors in October last year. The EGM was later to be shelved after the High Court ruled it illegal.
This article was originally published in the Financial Gazett