Chanakira organised "externalisation" of Meikles boss

He also reveals he was forced to flee the country last year after he was warned that CEO Nigel Chanakira had motivated Affirmative Action Group Chairman Supa Mandiwanzira, Youth Minister Saviour Kasukuwere and businessman Phillip Chiyangwa, to ‘molest him.’

BROADCAST: 25 September 2009


VIOLET GONDA: On Hot Seat this week we continue with the saga surrounding the specification of one of the country’s largest companies, Kingdom Meikles Africa Limited. Last week I spoke to co-Home Affairs Minister Giles Mutsekwa who said he authorised the seizure of the company because Chairman John Moxon committed a serious crime by externalising millions of US dollars. On Thursday I spoke to John Moxon himself, who gives us his side of the story. Thursday was also the day that riot police stopped the company’s shareholders from holding their EGM in Harare , where they wanted to remove group CEO Nigel Chanakira. I first asked Moxon to tell us what happened.

JOHN MOXON: They were to meet in terms of the extraordinary general meeting (EGM) which had been called, giving the appropriate notice – which is just short of a month’s notices. And the purpose of the meeting was to remove three directors from the board. Those being Chanakira himself as the Director and Chief Executive; Callistus Jokonya and Busi Bango – all of whom are closely associated with Chanakira. And they were to be removed because the board felt they were obstructing the process of de-merging the bank from the rest of Meikles – that was Kingdom Bank. The final resolution was to remove those directors from any of the subsidiary boards of the company. That was the purpose of the meeting. It was to start at 10am and the shareholders assembled at the venue for the meeting but they were told when they got there that there is a court order organised by Chanakira and I assume government to postpone the meeting for two weeks. So the meeting was postponed for two weeks. There were present police and other security forces to ensure that shareholders complied with this order. So they all dispersed and that was the end of it.

GONDA: Was Mr Chanakira himself present for the EGM?

MOXON: No, Mr Chanakira is in Johannesburg . He is allegedly ill, which is one of the reasons given for the court order. In other words they were suggesting that for compassionate reasons the meeting should be postponed. How ill he is I don’t know but we do know from people who spoke to him, yesterday, that he managed to conduct his business quite satisfactory from wherever he was in hospital. So he can’t be that ill.

GONDA: Oh so he is actually in hospital.

MOXON: He was admitted, we understand, to Milpark Hospital in Johannesburg .

GONDA:Is it known what is wrong with him?

MOXON: We heard on record, which is his own voice, voice clips that he had flu.

GONDA:I spoke to one of the Home Affairs Ministers Giles Mutsekwa and he accused you of externalising funds. Did you commit a crime? Did you externalise funds?

MOXON: Violet, the comment externalisation conjures up in anyone’s mind illegal transfer of monies or assets from Zimbabwe to another country, and that is why I don’t like the word externalisation. In our case money was invested in South Africa from Zimbabwe with Reserve Bank approval and the funds were remitted by the Reserve Bank to South Africa on our behalf. Those were the days prior to the present Reserve Bank governor’s office. It was when Leonard Tsumba was still governor – in other words it goes back before the current people there. Now the documentation for all this is available and has been given to the Zimbabwe State President in the last few weeks and it is hoped that he will use his offices to rectify these accusations.

As far as the co-Minister is concerned his comments or his accusations are defamatory and I have handed that over to my lawyers and I imagine they will be taking action against him. He has said things about me which are untrue and which he has to accept responsibility for. I have been advised, in fact, to sue him by other government Ministers – which is interesting. But I am still going to ask my legal people to advise me on what I should do.

GONDA:When you say you got authorisation years ago, you mentioned that it was during the time that Leonard Tsumba was the Reserve Bank governor, how long ago was that exactly, and is it not the case that a company needs to get authorisation for each and every transaction?

MOXON: Yes but that transaction was done in the early 2000s and our whole process of transactions goes back in fact to 1996 onwards. So we are talking over a very long period of time and a period over which the company developed a very good relationship with the Reserve Bank on these investments. Originally the company did its IPO in 1995, 1996 and at that point in time the foreign investors, who had invested in the company, were encouraged to invest on the basis that the company was to go regional and invest not just in Zimbabwe but in the region. And that was the basis in which we raised substantial sums. In fact it was the largest capital raised that Zimbabwe , up to that point, had ever done. And that whole process was negotiated with the Reserve Bank prior to the IPOs and so we are really going back a process of 15 years now.

GONDA:But when you were given this authorisation were you given a blank cheque, you know cart blanche, or the authorisation was just for one transaction?

MOXON: No it was for different transactions. There was a transaction connected to the Cape Grace Hotel (SA), there was a transaction connected with a company called Rebserve. So there were specific transactions at the time and those still exist. The entire business investments of the Meikle group – whether in Zimbabwe or elsewhere – were all displayed in the annual reports every year for shareholders to read and at the investor presentations which were held twice a year for many years – these were all discussed.

GONDA:So can you describe the nature of the allegations against you then and why you think you are being targeted?

MOXON: I think it all goes back to April last year when it came to my view, my opinion that the relationship between us as a family – or me in particular – and Chanakira was not going to survive. The family had the view that he had his own agenda and his own objectives different from the Meikles ones and we didn’t approve with the manner in which he was trying operate or run that company. Now moving forward from April we got increasingly concerned and in August we tried to remove him by calling an EGM for that purpose but he managed to get that blocked in the courts, as we now have now. At that point in time the family – despite having 43percent of the shares – were isolated because the board of directors as a whole at that time were not terribly supportive of the family nor were certain shareholders. And they all felt that Nigel Chanakira was doing a satisfactory job.

However by January and February of this year the major shareholder – Econet and the appointees to the board saw that this was not the case and they have been supportive in trying to remove Chanakira from the board. It’s no longer a battle between Chanakira and Moxon which is portrayed in a lot of the press. It was a battle between Chanakira, his appointees to the board, his friends outside the company – in political circles, and the company itself and management in the company and the workers in the company. The opinion in the company and the group is that they do not want Chanakira there and hence this effort at the EGM to have him removed and today (blocking of EGM) has been a big disappointment to management and to the employees of the company because they are really hoping that this situation can be sorted, that the company can progress, that the company can attract additional investment and become a vital company once more, in the Zimbabwean context.

And I am told, although I am in Johannesburg and not in Harare , I am told that the long faces amongst management after the EGM frustration is very relevant. They are furious, they are angry. They are angry that the EGM was once again frustrated, frustrated by elements in government, by Chanakira himself – whether he is ill or wasn’t ill. And all it has done is stop the company from progressing further and looking after its 4 500 employees for the benefit of one or two individuals – in this case probably one individual.

So Violet the issue is that he must go, he must go. He must go his own way and the company must then rebuild and that is where we are at. The whole board, it was the board who called the EGM, not Moxon, not the Meikles family. We were not part of that. It was the board. So over this last 12 months the entire board has gradually come around the view which Moxon saw last year that this man was the wrong man for that job. And the EGM we had on June 22 nd – the purpose of that EGM was to separate the group to dis-invest from the bank. That the bank – which he considers his – goes its own way and that Meikles go its own way. But there were problems involved with that separation and hence the present problems.

The main problem is that the bank has been advanced monies from Meikles to capitalise it properly – in terms of the Reserve Bank requirements – and those funds have to go back to Meikles. And then the case that the bank is going to struggle to do that. So even the de-merger, the publicised de-merger from June 22 nd has not been implemented and that is why we still have these problems today. Shareholders at that time were of the opinion that ‘lets de-merge the bank, that the bank goes its own way and let Chanakira go with it and let Meikles then look after itself.’

GONDA:What were the indicators that showed Mr Chanakira was the wrong man for that job because there are allegations that you are victimising him, or only want to remove him from the company because he disapproved with the way you were running the company and had noticed that you were illegally externalising money?

MOXON: Well Violet I think if you were to have a survey today of management and employees and I think the bank inclusive, you will find that there is no support for him. So it’s not me who is saying now that he has been the wrong man for that job. I am saying that, of course I am saying that but I am one of 4 500 people who are saying that and as far as his accusations are concerned, it started off in this manner:

After the merger at the end of 2007, and I will always remember this, we had a very good management conference. He stood up at the conference and told all the managers present and said ‘one thing I can tell you all is that John Moxon is not a racialist’ and then he presented me with a bible, and I have still got that bible. Now that was a start and it was a good start.

But when this dispute started, the first thing that happened was I was accused of racialism. And he has even conveyed those accusations to the State President, which I object to very much. The next thing is he went to the Reserve Bank and made false accusations of externalisation. The next thing that he did was get the family (Meikles) specified, and he achieved that. Now no one is going to start fighting the family’s battles because the family consists of five people only. So no one is going to fight that battle – one of those people is in a mental home anyway. So what does he know about what goes on in the company and in business in general. He is unable to earn a living for his whole life unfortunately.

So now because an EGM was called to remove this man from office, and that EGM was called by the board of directors and not by Moxon, who is no longer a director – he immediately went to government and got his own company specified. Now that I do know for a fact because management, after it was specified, went to see the MDC Minister of Home Affairs to object to the specification – and I noticed that he is saying they were my emissaries. They were not. They were acting on their own and for the 4 500 people. They were concerned and I can understand that. So they went to the Minister of Home Affairs and complained about the company being specified. Next thing that happens is the EGM being cancelled by government. And that started earlier in the week when the so-called investigators wrote a letter to the chairman of the company saying that anyone who attended the EGM would be committing a criminal offence. They said any shareholder, any employee, anyone and if that is not intimidation what is intimidation?

The day before the EGM, the co-Minister had a meeting with the chairman of the company at which the government, through the co-Minister, said they didn’t want this EGM to take place. So they decided that they would stop it on the basis of compassionate grounds for this so-called sick man – and that is what happened. But result of blocking of the EGM is not whether it hurts Moxon or Chanakira but it has hurt 4 500 people and that is the issue now. And I think there is going to be a heightening of tension now because the company does not want Chanakira and that is it. Although, I am getting to be an old man now to appoint, the company in fact wants me back and not him. And that is the message you will get if you were to question people in the company, even if you were to ask the waiters, the waiting staff in La Fontaine. If you go to TM supermarkets, the stores, that is the message you will get from them all.

GONDA: Which Minister ordered the blocking of the EGM?

MOXON : It was the MDC Minister for Home Affairs, Giles Mutsekwa and he agreed with the Chairman of the company Much Masunda, accompanied by one of the directors of the company called Dennis Stevens; they agreed that on compassionate grounds they would recommend to the shareholders that the meeting would be postponed. Now, when the shareholders as a whole arrived at Meikles Hotel for the meeting and they were denied entry into the meeting place, they were told apparently that a court order had been instituted in the morning with Justice Garwe that the meeting could not take place on compassionate grounds because Chanakira was ill. Now that was at half past nine; the meeting was supposed to be at 10am and I’m told that they had riot police outside the hotel, they had plain clothes police, there was a real threat there to shareholders who assembled there to do nothing more than to exercise their rights as shareholders to vote.

GONDA: But Mr Moxon, once a company has been specified, is it not a fact that a board, or the company’s board can no longer, or has no legal weight or authority after it has been specified? That under the Anti-corruption Act, once there’s a declaration, the powers of whatever board cease and are then passed onto an administrator?

MOXON: Violet, there are two answers here which I want to make. The first one is, if one was to examine the Act carefully, the board of directors are not restricted from calling an EGM, in fact it is their duty to call an EGM or an AGM , and it’s their duty still to carry out their judiciary duties. In this case the administrators have adopted powers which are not part of the Act and they are doing this by intimidation of the people in the company. If you were to speak to some of the management in the company who have close contact with those administrators, it is just like – and I’ll use this expression – it’s just like the Gestapo in Nazi Germany, it is no different. That’s their tactics. Now the second point I want to make Violet is this, the lawyers, both the company’s lawyers which is Gill, Godlonton & Gerrans, my lawyers which is Sternford Moyo of Scanlen and Holderness have pointed out to government that in fact both the company and the family, the Meikle family are not in fact legally specified because the specifications were done illegally, they were not done properly and so we are not specified, none of us are specified at law and that the administrators are, as a result of that, unlawfully appointed and it’s a nullity. That is the situation legally but of course in Zimbabwe today, the law – what is the law?

GONDA: It appears from a recent interview you did with Moneyweb recently you only brought in Nigel Chanakira because you wanted him to be a token black face, to be seen as complying with the government’s policy of increased black participation and that you actually never intended to adhere to this policy. Would you agree with that observation?

MOXON: No I don’t agree with that observation Violet. Let me tell you this, in 2007 when the government introduced their indigenisation implications, we as a family decided to embrace that. That was in June, now I know that specifically it was in June 2007, at a dinner in Johannesburg with Nigel Chanakira and his wife. We had dinner and discussed it all and we decided we were going to be proactive. You see, Meikles Africa as it then was, owned at that point in time 34% of Kingdom Financial Holdings. So we knew the people and there are some very good people in Kingdom and we thought we knew Nigel and we agreed to go forward in the proactive sense. In fact I think with any large business which was viewed as being a white-controlled business, I think we were the only one who proactively progressed along the lines of trying to, not trying, of implementing the indigenisation programme and it was very exciting – we were thrilled with it and this lasted until April 2008. In retrospect I think the job is too big, is just too big for Nigel. That’s the view in Meikles. So it’s not a racial implication at all, it’s just a view on the individual.

GONDA: And you know it’s also believed that Chanakira is a small fish in this whole saga, do you think there is someone or some group or somebody who is bigger or behind Chanakira in this case?

MOXON: Yes, yes.


MOXON: I don’t know who in terms of names but it’s extraordinary, it’s extraordinary how he’s managed to co-opt the State machinery, the State mechanism to assist his position. Now even today, if you have an EGM for the purposes of removing a director, I’ve never heard of a case where that EGM has been postponed because the man in question or lady in question whatever it is, is ill. It’s just extraordinary that the State would step in; the State would step in to deny the shareholders their rights for that reason. It’s just absolutely extraordinary so where are his influences, I don’t know. We as a family have always been apolitical; we don’t support the MDC , we don’t support Zanu-PF, we have always adopted a completely apolitical approach to business. So we don’t have that sort of clout and I’ve never wanted that sort of clout but he has that sort of clout and I don’t know where it is, I didn’t. It’s basically, it must be Zanu-PF I suspect although I don’t know why Minister Giles Mutsekwa has acted as he has – it’s extraordinary to me that. I don’t know.


GONDA: Speaking about the Minister, when I interviewed him last week, he said you sent representatives but you denied this earlier on in the interview, but the minister said you sent in representatives to him and you gave him assurances, through the representatives that you would repay whatever money you externalised. But now you are saying this is a lie, this never happened so what does this really mean? Are you not going to repay the so-called 21 million US dollars that was allegedly externalised?

MOXON: Violet those emissaries, as I think they were described, were not sent to see the Minister by me. They were representing management and the employees of the company, quite rightly to object to the specifications because of its impact on the company and in that context I think they would have told the Minister what they thought. And I don’t know what they told the minister because I’m not privy to that and the Minister at the end or the day after, said he had been misled. He made that comment publicly. These emissaries said that, I understand, that the Minister acted on Chanakira’s advice and he only listened to one side. So they weren’t my emissaries and the Minister has not made any contact with me at all. So that is that situation.

Now as far as the return of funds to Zimbabwe is concerned, those funds were legitimately invested outside Zimbabwe . They were invested with agreements down here in South Africa and so you can’t just suddenly sort of break those agreements and send the money back. But the real issue is this – and this is the important thing – it’s not whether the company should break its agreements with co-investors in South Africa , it’s whether the company should be a responsible citizen, which means that the company will remain a regional operative, a regional investor and attract investment into Zimbabwe , into the company.

Now what hasn’t been given publicity, and I’ll tell you now, is that if this situation is sorted out, the company can expect investment in the company in Zimbabwe of anything up to 100 million US dollars. And that has not been given publicity but that investment is not going to happen, it’s not going to materialise until that company becomes a responsible citizen again. People are very wary about investing, not only in Zimbabwe at the moment, and this is a good example I think, but also in the company unfortunately.

GONDA: But once specified, is it a straightforward task to de-specify the company and also can you translate the loss of business and effects of the specification?

MOXON: Yes, I don’t know legally how easy it is to de-specify, particularly in this case when the lawyers are saying we’re not specified anyway, so I’m not quite sure what the procedure is. All I do say is that it must happen fast because the company is deteriorating rapidly day by day as a result of this. Now where it is deteriorating, it’s deteriorating in its relationship with its bankers, its creditors. The suppliers are worried about it and are not extending normal trading terms to it. We have a relationship in TM Supermarkets with Pick ‘n’ Pay in South Africa and they are very worried about their investment and whether they should be supplying goods and I’m going to see them in fact tomorrow morning to try and discuss that with them.

Now even down to the Cape Grace Hotel with all this going on, it’s in South Africa, it’s in Cape Town and one would think on the surface it’s fairly isolated from what’s going on in Zimbabwe, but one is surprised how all the tour operators who supply the business to the Cape Grace Hotel have all picked up on all this and they’re all contacting the Cape Grace Hotel and saying well should we continue to be putting guests or encouraging guests when they come to Cape Town to go to the Cape Grace. And the Cape Grace management right now having to handle that issue, so it’s doing a lot of damage as we sit here tonight.

GONDA: And in monetary terms?

MOXON: Well let me put it this way, in 2007 at the date of the merger at the end of 2007, the market capitalisation of the group was 500 million US dollars and it was the largest market capitalisation, it was the largest group on the Zimbabwe stock exchange. Today it is unlisted, we’ve lost our listing on the Zimbabwe stock exchange so I wouldn’t like to say what it is worth – probably nothing.

GONDA: Are you a fugitive from justice because I understand that you actually fled the country last year and that’s why you live in South Africa ? So what is happening here?

MOXON: I’ve been described as two things, the first thing I am, I’ve been described by the company’s attorneys in South Africa as an oppressor – I’m not quite sure who I’ve oppressed, but I’m an oppressor so I’ve got a new way of life now from what I used to have and now I’m an oppressor. The second thing is a fugitive from justice, fugitive from justice – what does that mean? If you say will I go back to Harare tomorrow morning, which I’d love to do, the answer is no I won’t and I’ll tell you why I left Harare which was exactly a year ago and that was in September. And that was just as the family had called for the first EGM to remove Chanakira. We had a phone call at home in Harare and we were told by a friend to leave our house because we were about to be molested because we had called this EGM. Now we did leave, we left the house and we went and stayed with a friend and then we started making enquiries with some contacts we had and we were told, yes there is nothing wrong in terms of the police which is the same today incidentally, there are no charges of any nature against us today in legal terms, as we sit here today, but we were told that Nigel Chanakira had motivated three members of what is called the Affirmative Action Group to molest us, molest me and I will give you their names right now. One was Philip Chiyangwa, next was a government minister as he is today Kasukuwere, Saviour …

GONDA: Saviour Kasukuwere?

MOXON: Yes and the third one is Mandi, who is current chairholder for the Affirmative Action Group, Supa Mandizvidza.

GONDA: Supa Mandiwanzira?

MOXON: Yes, he was the other person involved in that effort last year. And the fourth one of course is Chanakira himself. So what we are going to do at the age, I’m now 64, I was a younger man last year, I was only 63, so what are you going to do at that sort of age when you get told that these people are going to try and get you locked up in those sort of prison conditions or whatever it is you’ve got in Harare? You reach an age eventually when you lose resilience to face up to that. If I was thirty years old I would have probably told them well I’m going to stay here and go to hell but not at my age.

GONDA: In terms of the rule of law, what does this Anti-corruption law do, as a person who has been affected by this?

MOXON: Well in the case of my family and I, my entire family, we have left Zimbabwe because we don’t want to be harassed by the investigators appointed by government. These investigators have acquired powers which the law doesn’t allow them to have, but they’ve acquired those powers, all of which is intimidatory and very similar to Nazi Germany to be frank. The law in terms of this Act, this Act is I think fairly unique in the world, I don’t think they’ve got it elsewhere, it was a most unsatisfactory Act, it does not allow for property rights in the normal sense of the word, it doesn’t allow for the rule of law, but even then, in Zimbabwe these people are interpreting the Act to their own advantage so in effect you are living in a complete and utter Nazi Germany type police state and that’s the implication of it.

GONDA: And a final word?

MOXON: The final word is this, since the company was specified, since it was specified, there’s been a lot of interest in the issue internationally about investing in Zimbabwe and about what happens in Zimbabwe and in addition to that there is a lot of questioning of where the MDC stands because of what Minister Mutsekwa has done in this and I think what he did is probably what’s raised interest in this more than anything else because Zanu-PF people, I think the international community might have said, well we’ve heard this before, it’s a bit of déjà vu, we’ve heard the land issue, it’s also déjà vu as they see it. But now that the MDC have appeared to be complicit in the same activity I think that they have an issue, they have an issue internationally which they have to answer for and how they answer that and how the unity government in turn answers this issue will be very, very critical in terms of foreign investment in that country, which we all need to see because there are so many people which are suffering, the Zimbabweans are suffering.

GONDA: OK, thank you very much Mr John Moxon for talking to us on the programme Hot Seat.

MOXON: OK thank you Violet, thank you very much.

Feedback can be sent to