HomeBusiness DigestVCCZ shuts down

VCCZ shuts down

Kuda Chikwanda

THE Venture Capital Company of Zimbabwe Ltd (VCCZ), a company set up by the Reserve Bank of Zimbabwe (RBZ) to fund high risk loans without collateral, has

shut down because of a serious ownership battle.

Board chairman Tichaendepi Masaya is involved in an ownership wrangle with other shareholders who accuse him of trying to wrestle control of the company. Masaya is a former Finance minister.

VCCZ has not been operating for the past month after Masaya refused to sign cheques to pay for bills incurred by the company.

VCCZ was set up by the Reserve Bank as an equity financier for entrepreneurs for high-risk investments without collateral.

businessdigest has established that Masaya is facing a probe over the disposal of five million VCCZ shares by the International Finance Corporation (IFC) and another company called Swissco in 2002.

Documents in the possession of businessdigest show that Masaya, through Climax Investments, illegally acquired the shares despite having been mandated by the RBZ to warehouse them while waiting for a suitable purchaser.

Climax is a debt recovery company wholly owned by RBZ. Masaya is Climax Investments’ board chairman which means he is an interested party.

Masaya has also been accused of trying to use his influence as board chairperson of the two companies to facilitate a takeover of VCCZ by Climax. The documents allege that Masaya has allowed Climax to give loans to VCCZ. The loans are given despite the fact that VCCZ had not applied for them.

“The intention of this is to call for a rights issue and then convert the loans to equity and acquire the assets of VCCZ for close to nothing as in the case of Rutsungo (Pvt) Ltd” the notice said.

Climax is also accused of stripping VCCZ assets and trying to forcibly relocate VCCZ from its offices without shareholders’ approval.

Minutes of a board meeting held on August 8 show that Masaya proposed Climax’s takeover of VCCZ. Masaya informed the board that the next VCCZ board meeting will be held at Climax Investments offices.

“The chairman after explaining that since VCCZ is not doing much Venture Capitalism, he proposed that Climax Investment becomes the managing agent of VCCZ. Climax investment will provide both the managing director and the secretary to the VCCZ board,” the minutes state.

The VCCZ assets, which Climax Investments was been accused of trying to seize include the Venture Agribusiness and an investment arm called Rutsungo Investments, which Climax bought for $60 million despite it having $3 billion worth of assets.

The use by Climax Investments of a VCCZ Mercedes Benz E240 vehicle without the approval of the acting managing director, Noah Nyamaropa, was also up for discussion.

Masaya has been accused of running VCCZ without an elected board of directors. He is also accused of making unprocedural appointments of four directors in contravention of VCCZ’s Articles of Association.

“The chairman in doing so should act through the Board and not individually,” the notice read.

Masaya cancelled the EGM in a handwritten note dated August 20, 2007. Nyamaropa replied the same day nullifying the cancellation notice and questioning the legitimacy of the board.

“The legitimacy of the current chairman and his board is questionable. The EGM must go ahead and resolve this issue once and for all” he said.

Masaya refused to comment when reached for comment.

“Phone the head office and speak to Mukotsanjera. He is the managing director, I am just a non-executive chairman,” Masaya said before hanging up. Repeated attempts to get a comment from Masaya were futile as he kept hanging up the phone.

Mukotsanjera could not be reached for comment.

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