eBusiness Weekly
Happiness Zengeni
Any strategic thrust that CFI Holdings will take would need to include Stalap Investments, who hold a significant shareholding block of close to 42 percent. This is despite the resignation of all its representative directors following a protracted battle with Nicholas Van Hoogstraten, who later emerged as a holder of 52 percent proxies of the group through various investment vehicles.
The battle to control CFI started after 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 more control.
Stalap then went on to make a mandatory offer to minorities on the Zimbabwe Stock Exchange.
However, Van Hoogstraten through Willoughby’s Investments stymied Stalap’s mandatory offer of 22 cents a share to minorities, after mobilising against its acceptance by making a counter offer, which was more than double the price, sparking off wrangles.
The wrangles saw extra-ordinary general meetings being requisitioned to push out directors from both sides of the majority shareholders over the sale of Langford Estates in Harare South to Fidelity Life Assurance and on fraud allegations.
Stalap Investments representative, who is also the Zimre Holdings chief executive Stan Kudenga told Business Weekly that CFI remained a strategic asset for the group.
“It’s a strategic asset to us, given that this economy is still agro-based; we would like to maintain it and contribute to its growth. We are keen on its turnaround and we would be happy to support it with capital as long as there is a competent board and management.
“We are entitled to a board seat as we have close to 42 percent shareholding. Under good corporate governance systems you cannot ignore such a significant block and this holds true for a company such as CFI, which urgently needs restructuring.”
Stakeholder relationships will remain key especially after the ZSE suspended the trading of CFI shares for a period of three months with effect from January 2, 2018 to allow it to comply with the free float requirements of the Listings Requirements and for it to deal with corporate governance issues around its board.
The Listings Requirements state that 30 percent of each class of equity shares shall be held by the public, unless otherwise agreed with the ZSE. Where the issuer has had a private placement prior to the initial public offering, at least 20 percent of the total issued shares must be offered to the public.
In addition, the ZSE called on the company to appoint a substantive board chairman, chief executive officer and a finance director and to also appoint non-executive directors who are not affiliated or have any association with any of the company’s shareholders. CFI has been run by acting management since 2016.
Kudenga said the group would need to understand the strategic direction that the majority shareholder would want to take and possibly buy into it. “We can then discuss how we fit in to the structure.”
According to Kudenga, good corporate governance would have to be adhered to, and an independent board would need to be appointed.
On the fraud and financial impropriety allegations raised by Van Hoogstraten on the Stalap directors, Kudenga said: “As far as we are concerned those were just mere allegations brought about by the fight to control the board.”
On the other hand, a Willoughby’s nominated director Shingi Chibhanguza, who is now the acting chief executive was charged and found guilty by an independent panel of nine counts of fraud involving $1,8 million at Farm and City.
