eBusiness Weekly
Golden Sibanda
Businessman James Makamba has failed to repay the $3,7 million he received from a local consortium in exchange for his stake in an investment holding vehicle that holds nearly half the shares in State-controlled telecommunications firm, Telecel Zimbabwe, industry sources have revealed.
Highly placed sources familiar with the transaction, told Business Weekly that despite being pressured several weeks ago to either fulfil terms of the original agreement, take only part of the deal or reimburse funds he was paid by the consortium and reverse the transaction, Makamba had not budged.
Makamba was not available this week to comment on the issue, and his spokesman and son Zororo Makamba did not respond to questions sent to him.
Makamba, who strongly denies selling his shares in Empowerment Corporation (EC), which owns about 40 percent shareholding in Telecel Zimbabwe, reportedly has little room to manoeuvre as sources claim he is struggling and under considerable pressure to settle a mountain of overdue debts.
Well-placed sources earlier said Makamba has previously been in constant touch with the consortium led by businessman George Manyere, to whom he agreed to sell his shares and had made several proposals to settle his dues.
The once self-exiled businessman, holds 68 percent of EC from 95 percent, after reportedly agreeing to give 20 percent to a women’s empowerment grouping led by Harare businesswoman Jane Mutasa.
Other indigenous interest groups received an average of 1 percent stake in EC following a protracted dispute with Makamba over his correct shareholding in the empowerment vehicle, having allegedly converted into his name share which other targeted interest groups failed to pay for when Telecel was established.
On return from self-exile Makamba reportedly agreed to sell his entire stake in EC to the consortium, and was therefore paid a deposit of $3,7 million. Thereafter, Makamba was due to receive a further payment amounting to $11 million after which he was expected to step down as chairperson of Telecel Zimbabwe.
The businessman, who returned to Zimbabwe in December last year after 12 years in self-exile in neighbouring South Africa following the resignation of ex-president Robert Mugabe with whom he had fallen out, reportedly agreed to sell his entire shareholding in EC to the consortium early last year.
If Makamba did not wish to see through the original agreement, the businessman was expected to at least bequeath 30 percent of his shares in the investment vehicle to satisfy obligations arising from the funds he received.
But a source told this publication that Makamba had neither repaid the $3,7 million he received nor agreed to see through the original terms of the shares disposal transaction, meaning the dispute with the consortium persisted.
Contacted for comment Manyere said he could not discuss the matter as he was currently out of the country.
“Nothing has happened; there has not been any progress to the issue. Everything has also been clouded and delayed by what has been happening regarding the elections held last months and subsequent events. The issue will be pursued in the next few weeks,” a source that cannot be named said.
Lately, the businessman, who doubles as a broadcaster, recently issued statements denying that he had sold his shares. This came after Makamba fell out with the consortium’s proxy in EC, Gerald Mlotshwa.
But Makamba’s lawyers said earlier that he wanted to sell his equity to a certain (Manyere) consortium, “which failed to fulfil the terms of their conditional purchase and sale agreement, which saw him writing a conditional letter of resignation, which could only have been effective upon meeting of conditions in the conditional agreement of sale.”
However, overwhelming documented evidence and board minutes exist, supporting the position that Makamba agreed to sell his shares in May last year and also justifies the consortium’s claim for a board seat in the investment vehicle, unless Makamba repays funds he received and the deal is reversed.
When Makamba fell out with the consortium’s proxy, lawyer Mlotshwa, he solely passed a resolution, the only director out of the currently indicated two members; comprising Jane Mutasa, stating that the Harare lawyer was no longer director of EC.
While Makamba denies selling his shares, minutes of an extraordinary general meeting of Telecel show that a meeting was held consequently to him agreeing to offload, during which the transaction was approved and sale noted, but the process was not consummated due to lack of a quorum; a two-thirds majority of members.
This was because Government, now the 60 percent majority shareholder in Telecel Zimbabwe following its purchase of the entire shareholding previously held by Russian telecommunications giant Vimpelcom, did not participate in the extraordinary general meeting.
