THE battle between First Mutual Limited (FML) and Renaissance Financial Holdings has taken a new twist, with fresh details indicating that FML is in fact a significant shareholder in Renaissance.
Investigations reveal that FML is one of the
key investors in Renaissance, with a 9% stake in the financial services group.
Renaissance is on the verge of taking over FML in which it has laid claim to a 27% stake.
The revelations add to the mystery surrounding the protracted dispute between the two financial institutions over a deal that had triggered market speculation because of its shroud of secrecy over the past 15 months.
Econet Wireless Zimbabwe reportedly laid claim to the same stake that Renaissance claims to own.
Both Econet and Renaissance are demanding representation on the FML board of directors based on the same stake.
This has triggered speculation that Renaissance could have been representing Econet’s interests, reports Econet vehemently denies.
Speculation too is that Econet might have a controlling stake in Renaissance.
Reports suggest that both Renaissance and Econet bosses, Patterson Timba and Douglas Mboweni, travelled to South Africa last week to iron out any differences that might have emerged as a result of the deal. They are said to have met a key financier of the deal.
Renaissance two weeks ago went public over its interests for the first time since the issue came under the spotlight 15 months ago, declaring in its financial results that the stake in FML was a “strategic investment”.
The confusion however mounted after it was learnt that Mboweni had earlier on led a special emissary to FML to discuss the shareholding and the possibility of board representation.
There is also a mystery as to how Econet and Renaissance could lay claim to the same amount of shareholding in FML.
It is, however, the information about FML’s stake in Renaissance that has added drama to the mystery.
It is not clear how Renaissance could have increased its stake in the insurance giant without FML knowing as a shareholding. Apparently, because of the size of its stake, FML should have board representation in Renaissance.
Sources say the FML chief executive Douglas Hoto was however in the dark for the better part of the period in which Renaissance was on a buying spree of FML shares. Sources said Hoto at one time travelled to South Africa to verify initial information then that Sanlam were the financiers of the large purchases of FML shares at that time.
FML later wrote a letter to the Zimbabwe Stock Exchange (ZSE) requesting an investigation of the transaction.
ZSE chief executive Emmanuel Munyukwi promised to look into the issue but did not report back to FML.
In the heat of the moment, the insurance giant appealed to the central bank to investigate the issue. Sources say the company got a ‘sketchy answer’ which did not help clarify the situation.
The battle for control is however far from ending.
Sources close to the issue told businessdigest that Renaissance had intensified its bid to control FML.
“They are still in the market buying FML shares,” said a source close to the deal.
The company, sources say, was now targeting pension funds which make up the bulk of FML’s top 50 shareholders.
Renaissance have been pushing to buy their stake for sometime.
Their efforts are however being blocked by FML which happens to control most of the pension fund portfolios.
Renaissance have since set their sights on increasing their stake to 31% before June before FML’s annual general meeting.
Renaissance is assisted by the fact that they have comprehensive knowledge about FML which they gathered when they were lead advisers during the company’s demutualisation three years ago.