Afre Corporation chairman Innocent Chagonda faces the boot from the board of directors of the company amid concerns of conflict of interest on his part relating to his involvement as a trustee of ousted chair Patterson Timba’s Bethel Trust.
Report by Chris Muronzi
The trust was involved in a transaction that saw MetBank releasing a US$500 000 loan to Timba which was guaranteed by the insurance conglomerate early last year.
Sources close to the developments told businessdigest that at a meeting held this week, the board resolved Chagonda be removed from his position as chairman.
The sources said this had been necessitated by Timba’s failure to repay a US$500 000 loan to MetBank, guaranteed by Afre Corporation, a development that has prompted the bank’s lawyers — Kantor & Immerman — to make a claim.
Sources close to the developments at Afre Corporation disclosed that newly-appointed independent non- executive director, Oliver Mtasa would most likely take over the reins at Afre Corporation as chairman of the Board.
In a letter dated September 14 2012 to Chagonda in his capacity as Afre chairman, B Chidziva of Kantor & Immerman, claimed US$771 642 on or before 25 September.
Afre directors — Sibusisiwe Ndlovu and Kennedy Lemani — signed an unlimited guarantee in favour of Metbank.
“On February 22 2011, Afre resolved to guarantee facilities to be granted by our client to Bethel Trust in the sum of US$1 750 000. Pursuant to the aforesaid resolutions, the directors of Afre namely, Sibusisiwe Ndlovu and Kennedy Lemani signed on unlimited guarantee and the board resolution are attached hereto,” part of the letter reads. “In terms of clause 1.1 of the unlimited guarantee referred to above, Afre bound itself as surety and co-principal debtor for the due payment of Bethel Trust’s indebtedness to our client.”
In a letter to Kantor & Immerman, Metbank’s lawyers, dated October 1, 2012, Chagonda said Afre CEO Douglas Hoto would be in better position to deal with some of the issues raised in a Chidziva’s letter.