Businessman James Makamba, who stoutly denies selling his shares in an investment vehicle that owns nearly half of the shareholding in Telecel, has little room to maneuver as sources say he is struggling and under considerable pressure to settle a mountain of overdue debts.
While the Harare businessman maintains, at least in public, that he retains his shareholding in Zimbabwe’s third largest mobile operator, he has not repaid the funds he received for the shares in the investment vehicle, as he is reportedly under considerable pressure for funding he needs to settle the debt.
Sources at the company say Makamba has been in constant touch with a consortium he had agreed to sell his shares to and has made several proposals in this regard.
Empowerment Corporation (EC), originally made up of several empowerment groups when it obtained a mobile licence from Government in 1998, is a 40 percent shareholder in Telecel, one of Zimbabwe’s three mobile telecoms companies.
At one time a self-exiled businessman, Makamba holds 68 percent of EC from 95 percent, after agreeing to give 20 percent to a woman’s empowerment grouping led by businesswoman Jane Mutasa. Other interest groups received an average of 1 percent following a protracted dispute.
The new EC shareholding structure, which saw Makamba cut from 95 to 68 percent of shares in EC, was restructured recently following years of haggling over ownership of the vehicle.
At the centre of the squabbling was the dispute over Makamba’s shareholding, which many original beneficiaries disputed, claiming he allegedly converted unilaterally into his name shares meant for other empowerment groups, which failed to pay.
Also, no known evidence exists that Makamba did actually pay for his shares, particularly those he converted into his name from other groups, and some which had been set aside for allocation to indigenous empowerment groups in the future.
Makamba, who returned to Zimbabwe in December last year after 12 years in self imposed exile and lived in neighboring South Africa, following the resignation of ex-president Robert Mugabe with whom he had fallen out, had agreed to sell his stake to the consortium in early last year.
Lately, the businessman who doubles as a broadcaster has however recently issued statements denying that he sold his shares; this after he fell out with the consortium’s proxy.
However, overwhelming documented evidence and board minutes exist, which support that Makamba had sold in May last year and the justification for the consortium’s board seat, unless he repays the cash he received.
When Makamba fell out with the consortium’s proxy, prominent lawyer Gerald Mlotshwa, he solely passed a resolution, the only director out of the presently indicated two on the board; also comprising Jane Mutasa, stating that the Harare lawyer was no longer director of EC.
The businessman had entered into the share sale transaction early with the consortium led by businessman and entrepreneur Gorge Manyere.
Manyere is founder of investment holding company Brainworks Capital Management and a shareholder of Getbucks Zimbabwe, who was to buy Makamba’s entire stake in EC, and already paid $3,7 million.
Manyere entered the transaction through his JSE listed company Ecsponent, which bought the entire shareholding in unlisted Brainworks.
Makamba was to be paid the balance of $11 million, assuming the agreement to buy his entire EC shareholding stood as earlier agreed, while the transaction provided thereafter for the businessman to resign from the Telecel board of directors and his replacement by Mlotshwa.
In fact, an extraordinary general meeting of Telecel was held consequent to him agreeing to sell, at which meeting the transaction was approved and the sale noted, but the process could not be consummated due to lack of a quorum; a 2 thirds majority of members.
This was because the Government of Zimbabwe, now the 60 majority shareholder in the Telecel following its purchase last year of the controlling stake in the telecommunicationss company, which previously held by Russian telecommunications giant Vimpelcom.
But Makamba has lately cast more confusion over the already vexatious state of affairs and shareholding in EC, as, after falling out with Mlotshwa under unclear circumstances, he recently denied selling his stake in EC or agreeing to step down as chairman of Telecel.