NSSA ponders fate of investment in CFI

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Golden Sibanda
The National Social Security Authority will soon engage its investment ally in Zimbabwe Stock Exchange listed agro-industrial, CFI Holdings, to decide the fate of their investment in the group.

NSSA chairman Robin Vela told Business Weekly this week that NSSA would sit down with its shareholding ally in CFI through Stalap Investments, Zimre Holdings, to map the way forward. Stalap, jointly owned by NSSA and Zimre, holds 42 percent of CFI Holdings.

The plans to decide their future in CFI Holdings comes after Nicholas van Hoogstraten through various investment vehicles, effectively took control of the agro-focused industrial concern, which saw a number of directors appointed by Stalap Investments voluntarily stepping down.

The British businessman also successfully mobilised his associates to save his board representative Shingirayi Chibanguza from being voted out during a charged extraordinary general meeting, entrenching his grip and influence on the company.

Stalap had called the EGM in December to seek the expulsion of Chibanguza claiming that he was not fit to hold office given his irregular conduct after he allegedly allowed illegal collection of cash from a company he manages, a subsidiary of CFI Holdings.

Van Hoogstraten’s board proxy and now acting managing director of CFI was alleged to have allowed officials from Bellevue Butchery, owned the business mogul, to collect cash from Farm and City, which he managed, without approval of the CFI board.

As the battle to control CFI heated up, the National Social Security Authority early last year exchanged its 12,89 percent equity stake in CFI for a 31,426 percent stake in Stalap in order to create a 41 percent equity block in CFI for effective control.

But after Stalap’s failed bid to fire the tycoon’s proxy, Van Hoogstraten and his associates who control 52 percent of CFI, and with most Stalap directors having left the company, now hold swaying influence over the affairs of the agro-industrial concern.

Stalap board nominees Ephraim Chawoneka and Dougals Mamvura had opted out ahead of the extraordinary general meeting (EGM) called by Van Hoogstraten to kick the them out.

Acting chairperson, Grace Muradzikwa had resigned before the December 2017 EGM. Acting chief executive Timothy Nyika also resigned.

“We will regroup with other shareholders (Zimre) to ascertain the way to go. We wanted to put CFI on strategic long term growth path.

“Unfortunately, without (major) shareholders working together, it is difficult to know where you are going. In the next week or so, we will regroup and ascertain the way to go,” Vela said.

NSSA may find it unworthy the while to maintain its interests in CFI given the control Van Hoogstraten now wields and a fractious relationship that has existed for a while now.

Vela is on record saying struggling CFI required $12 million recapitalization to get on its feet, but that that Van Hoogstraten had been unwilling to inject fresh capital. With a fractious relationship, agreeing on CFI’s future might prove difficult.

The British business mogul has recently accused the market regulator of complicity in alleged irregular transactions that have driven CFI into the troubles it is facing.

While the relationship has been a tumultuous one for years now, the situation reached boiling pint when van Hoogstraten to reverse the disposal of a major asset claiming the transaction was fraudulent.

The British businessman demanded that the sale of 81 percent of Langford Estate to Fidelity Life Assurance in 2016 for $18 million approved by both the ZSE and CFI shareholders at an AGM.

However, Van Hoogstraten later made an about turn claiming that he had discovered that the parties to the deal were related and that other shareholders had been prejudiced since the asset was sold at a discounted price.

But while Van Hoogstraten has wrestled away control of CFI, he has immediately run into problems after the Zimbabwe Stock Exchange suspended trading in CFI’s share for 90 days over alleged shareholding irregularities.

The suspension was with effect from January 2, 2018.

The ZSE alleged that the company needed to comply with regulatory requirements that stipulate that at least 25 percent of a company’s issued shares must be free-float on the stock market.

Between them — Van Hoogstraten, associates and Stalap — the shareholders hold over 80 percent of the company, a violation of provisions of the ZSE’s listing rules.

A mandatory offer by Stalap in July last year, to buy out CFI minority shareholders flopped after the agro-industrial firm’s share price skyrocketed amid aggressive buying by van Hoogstraten and his associated investment vehicles, who also made an audacious, but informal bid for which he was reprimanded by the ZSE.

Further, the ZSE expressed concerns over Governance issues and ordered CFI to appoint substantive chairman, chief executive and required number of independent non-executive board directors.

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