HomeBusiness DigestClimax majority control ignites VCCZ conflict

Climax majority control ignites VCCZ conflict

Kuda Chikwanda

THE boardroom squabbles that have hit Venture Capital Company of Zimbabwe Ltd (VCCZ) emanate from the majority control assumed by Climax Investments (Pvt)

Ltd after it “illegally” acquired five million shares disposed by the International Finance Corporation (IFC) and Swissco.

IFC and Swissco sold their shares, amounting to 17,2% of VCCZ’s share capital in 2002. Climax had 17% shareholding at the time of disposal.

A subsequent rights issue in February 2005 saw Climax being allotted an additional 5,7 million shares.

Coupled with purchases from Zimnat Lion, Continental Capital, Lonrho and ILA, Climax’s shareholding rose to 50,3% giving it control of VCCZ.

Climax has since sought to takeover VCCZ and has announced plans to relocate VCCZ from its Fidelity Life Tower offices in Harare to Climax’s offices also in Harare.

Documents show that Climax was supposed to warehouse the shares until a suitable investor was found.

VCCZ board chairman Tichaendepi Masaya proposed to warehouse the shares in a letter to the then RBZ deputy governor Charles Chikaura in 2002.

“I am proposing that the Reserve Bank of Zimbabwe helps in facilitating the warehousing of these shares while authorities decide on whether or not original policies that led to the creation of the VCCZ need to be changed and which groups in our society should benefit,” said Masaya in a letter (Reference number TRM/pc/rbzlm192) dated September 5, 2002.

Masaya informed Chikaura that Barbican had expressed interest in acquiring the shares and turning VCCZ into a subsidiary.

“We did not agree to sell a public asset to an individual in this manner without causing public outcry. They may wish to come in using this new opening as it appears to me that not many shareholders would like to exercise their rights given the current unfavourable economic environment,” Masaya said.

Chikaura responded on September 16, 2002 saying RBZ was agreeable with the proposal that Climax warehouse the IFC/Swissco shares.

“In this regard we are agreeable to your proposal for Climax Investments (Pvt) Ltd to warehouse these shares pending a review by the authorities on the original public policy objectives that necessitated the creation of VCZ. Climax should fund this investment from own resources as the Reserve Bank is not in a position to assist,” Chikaura said.

Masaya then wrote to Stanbic Bank’s Pindie Nyandoro on October 21, 2002 informing her that Climax would warehouse the shares while the central bank reviewed original public policy objectives. Stanbic was a shareholder of VCCZ.

It is this transaction that seems to be the root of the problems at VCCZ at the moment.

In an Extraordinary General Meeting (EGM) notice dated August 9, 2007, VCCZ company secretary Noah Nyamaropa called for shareholders to authorise an investigation into the illegal acquisition of the shares.

“Climax Investments illegally acquired the shares of IFC and Swissco. The board of VCCZ agreed to transfer the shares to Climax Investments for warehousing presumably with the agreement of the Reserve Bank of Zimbabwe. The minutes of the meetings were altered to transfer the shares to Climax as issued and fully paid,” the notice read.

Two days earlier Nyamaropa had written to Masaya informing him that the acquisition of the shares by Climax was unprocedural and that once a properly constituted board was in place, the fate of the shares would be discussed.

“It is common cause that when Swissco and IFC disinvested from Venture Capital Company of Zimbabwe Ltd, it was agreed that their respective shares be warehoused with Climax.

It is imperative that once a board is in place it must decide on the fate of these shares,” he said.

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