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Makamba faces the boot

01 Jun, 2018 - 15:06 0 Views
Makamba faces the boot James Makamba

eBusiness Weekly

Martin Kadzere
Telecel Zimbabwe will reconvene an extra ordinary general meeting by next Friday to effect the removal of James Makamba as a shareholder and director of the country’s second largest mobile firm.

The development comes as Makamba now appears to be backtracking on an earlier agreement to dispose of his entire shareholding in Empowerment Corporation (EC) to businessmen George Manyere and prominent lawyer Gerald Mlotshwa in May last year. Subsequent to that, the businessman was expected to step down as Telecel chair at the initial EGM in August last year.

EC holds 40 percent shareholding in Telecel Zimbabwe, while the balance of 60 percent is owned by the Government of Zimbabwe through an internet service provider, ZARNET.

Sources told Business Weekly that next week’s extra ordinary general meeting would ensure that all outstanding issues relating to the ouster of Makamba are resolved.

Also read:
Who is Makamba?

“Not later than Friday (next week), James will be out,” said one source close to the developments. “It is clear that Makamba is playing games, but I think it is too late for him.

“The intention of holding the EGM had already been made and it will take place next week.”

Genesis of Makamba’s troubles
Makamba fell out with a consortium in EC, led by Mlotshwa after failing to pay a deposit of $2,75 million, which Mlotshwa’s partner Manyere had paid as a deposit to the purchase of a $6,6 million loan Makamba’s vehicle Kestrel had advanced to EC.

The loan by Kestrel was securitized by shares in the empowerment group (EC) and conclusion of the loan purchase would have automatically transferred Makamba’s beneficial interests in EC to the consortium.

The deposit was supposed to be paid within nine days of the signing of the share purchase agreement. The agreement provided for the payment of the $3,75 million balance on closing of the share purchase agreement.

High Court papers seen by Business Weekly, show that the deposit was paid, but the conditions of the share purchase agreement were not satisfied and the agreement

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was formally cancelled on January 25, 2015.

Makamba, through Kestrel Corporation and Jane Mutasa’s Selpon Investments, co-owned the EC. But their shareholdings have on several occasions been challenged by fellow affirmative empowerment groups who claimed to be bonafide shareholders in the vehicle.

Fighting for control

The Business Weekly failed to get a comment from Makamba during the week. But the flamboyant businessman, who returned home last December from years of self-exile, is fighting to retain control of the telecom company.

The documents seen by Business Weekly signed on February 19 last year, show that Makamba had agreed to sell his shares in EC to a consortium made up of Manyere and Mlotshwa. He, alongside Mutasa, Manyere and Mlotshwa signed the minutes of the February 2017 agreement to sell his shares.

On May 29, 2017 Makamba and Mutasa signed two agreements relating to the disposal of Makamba’s shareholding to Manyere and Mlotshwa through a company called Ecsponent Zimbabwe. Pursuant to these agreements, Makamba called for an EGM of Telecel shareholders.

Makamba was going to resign as chairman of Telecel at the meeting. He had signed his resignation letter before a lawyer in January last year.

The EGM was held in August 2017, but not all resolutions could be passed. Only one was passed; the appointment of Mlotshwa to the Telecel board this year was meant to protect the interest of Ecsponent pending completion of other EGM resolutions.

Adjournment of the meeting

Last year’s EGM was adjourned indefinitely until government nominated its directors to the Telecel board. The government appointed Francis Mawindi, Selby Hwacha and Barbara Rwodzi to represent its interest.

“The directors are now in place,” another source said. “The EMG will conclude the outstanding resolutions, which were

communicated by Makamba himself.

“It will also take note of the agreements related to the disposal of Makamba’s beneficial interest in EC, retain Mutasa and appoint Manyere as a director of the company.”

The EGM is also expected to approve the restructured shareholding of Empowerment, taking into account certain legacy issues relating to the investment vehicle.

Under the new structure, Manyere and Mlotshwa will have about 70 percent shareholding in EC, Selpon 21 percent, Indigenous Business Women Organisation 3 percent while Zimbabwe Miners Federation, Affirmative Action Group, Zimbabwe Farmers Union and Integrated Engineering Group will own 1 percent each.

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