eBusiness Weekly
Golden Sibanda
Confusion is reigning supreme over the exact ownership structure of Telecel Zimbabwe, following the exit of Vimpelcom, the former controlling shareholder, last year. This comes amid indications that businessman Dr James Makamba is also angling to reclaim his footing in the mobile telecoms firm, despite allegedly losing his interest to a consortium led by lawyer Gerald Mlotshwa and businessman, George Manyere.
Dr Makamba came back into the country last month after a decade long self-imposed exile. While Dr Makamba and businesswoman Dr Jane Mutasa are believed to be the only remaining active members of Empowerment Corporation, an indigenous lobby group which was awarded the licence by Government in 1998, there has been squabbling between the members over ownership in recent years.
Market intelligence also suggests a potential wrangle lurks in the horizon over the legitimacy of the transaction that saw Vimpelcom selling its 60 percent stake in Telecel Zimbabwe to Zarnet, as EC was not accorded their right of first refusal. Until Vimpelcom sold, Telecel had largely remained foreign-owned for years, an allowed departure from rules that locals own at least 60 percent of telecommunications firms although the original deal was that local ownership would gradually increase to the laid-down minimum.
First, Telecel was owned by Orascom through 100 percent owned Telecel International and later by Vimpelcom. The return of Dr Makamba, who reportedly retained strong links with former foreign shareholders during his time in exile, has reportedly plunged Telecel into a mini-crisis in terms of ownership.
But the real ownership structure of the mobile phone operator, especially Empowerment Corporation, remains shrouded in unending secrecy. The puzzle has also been worsened by the happenings at Zarnet. Presently, Telecel does not have a fully constituted board because Zarnet, which bought the controlling 60 percent stake from Vimpelcom, has not yet appointed representatives to the mobile network operator’s board of directors.
However, Business Weekly understands the biggest confusion relates to issues over who rightfully owns what in Empowerment Corporation, an issue which hopefully should be resolved with finality following Dr Makamba’s return. Efforts to get a comment from Manyere, who is part of a consortium that supposedly bought Dr Makamba’s stake, were unsuccessful as he did not answer his mobile phone yesterday.
But Business Weekly has it on good authority that the biggest confusion is on the true ownership within Empowerment Corporation, where Makamba is reportedly still running the show despite selling his stake. Makamba, who initially had a 15 percent interest in Telecel through Kestrel Corporation later on reportedly bought out all other empowerment groups that included (IEG), War Veterans, Zimbabwe Farmers Union 9 percent and Zimbabwe Miners Association who held 9 percent.
Another empowerment group that was a key member of EC was the Indigenous Business Women’s Organisation (IBWO), which owns 9 percent of EC and is said to have never sold its quarter, earmarked for women. Makamba is also said to have converted into his name another tranche of 30 percent of unallocated EC shares reserved for other future empowerment groups into his name, allegedly without other members approval.
Sources say at this point, Makamba ended up with 95 percent of the EC shares, which then sold to a local consortium led by entrepreneur and businessman, George Manyere. However, Makamba did not deliver the shares.
“The contestation in EC is about the 30 percent that he converted into his name, which was not his and should have been shared among existing members, since it was not allocated new group’s,” a source said.
The challenge now, a source of confusion in and about the ownership of EC, is that Makamba must resolve his differences with all beneficial owners of EC who existed from the outset as well pay $4 million to the consortium. “The consortium is prepared to buy all the shares, but there must be clear sharing, especially of the 30 percent which was not allocated.”
However, untangling the puzzling web of share ownership in EC might prove difficult given that some of the founding members of the empowerment group died. In the meantime, Makamba calls the shots at Telecel, which raises eyes since he had reportedly sold his entire stake. Business Weekly has in on good authority that while reports last year intimated Dr Makamba had sold his Telecel Zimbabwe interests to a local consortium and that appointments were in line to reflect these changes, the business tycoon was still very much in the picture and angling to stake his claim.
The other intrigue in Telecel pertains to the lack of clarity on whether NSSA has transferred the beneficial rights of ownership and voting to Zarnet. Questions also abound whether NSSA is holding shares simply security for facilitating payment of as an asset. Interestingly, there was a dispute about whether NSSA would immediately hand over the shares after extending the loan facility to Zarnet or continue to hold the stock until it had been paid in full.
While Zarnet had the prerogative to appoint its board members as the new controlling shareholder, it has not, allegedly because it does not have the share certificates. This is despite the fact that it bought the stake as far back as late 2015. This has sparked speculation that while Zarnet acquired the 60 percent stake after ICT Minister Supa Mandiwanzira announced it had paid $40 million for the shares, it may not have paid the full amount required to assume control of the telecoms firm. But Chigwedere differed.
“No, that is not the reason. “Actually, we could not hold board meetings here because the chairman was based outside the country. Now that he has returned, we will not allow that to happen. In fact, soon we will hold an AGM,” he said.
Meanwhile, sources close to developments at Telecel claim that it was not possible that the $40 million transaction between Zarnet and Vimpelcom would be legally binding because it violated certain conditions of disposal.
“EC, as a 40 percent shareholder, should have been given the right of first refusal.
“If they (Zarnet) bought the shares from Vimpelcom, where are the certificates? They did not talk to us and they did not have the share certificate. How did the transaction go?” queried the source.
