Century in narrow takeover escape

Shakeman Mugari

CENTURY Holdings Ltd (Century) directors were last year caught napping as punters shook up the company’s share structure in a move that could have led to a take-over of its issued share capit


Market sources say the financial services group was a major target of the punters that included the now troubled ENG Investments.

The sources say the ENG Investment directors were also on a drive to become one of the biggest financial institutes with major stakes in key sectors of the economy.

The ENG directors, Gilbert Muponda and Nyasha Watyoka, who were arrested on fraud charges involving $61 billion, are understood to have started mopping up the Century shares on the local bourse as early as October last year.

The market watchers say the young directors could have scooped Century’s issued share capital had it not been for the financial crunch that hit the sector early this year. The crunch also effectively sunk their company. The directors and management at Century are currently evaluating the company’s exposure to the ENG affair.

Century announced in a cautionary statement last week that their investigations had indicated that ENG had a fairly significant stake of 16,8% in the financial group.

“On the basis of the available information, it appears that the aggregated shareholding in Century held through vehicles in which ENG directors have interest or influence amounts to 16,8%,” said the group in a statement. “Investigations are still under way to ascertain the exact position regarding ENG’s shareholding.”

Brokers and analysts however say the shareholding could be over 30%. “The rate at which the Century shares were selling does not warrant a 17% shareholding. It could be a 25% shareholding that the ENG holds in the group,” said a broker with a leading broking firm. “We are waiting for further investigations.”

ENG Investments took over Century Dis-count House (CDH) from Century Holdings in April last year for $1,6 billion.

ENG immediately went on a shopping spree acquiring properties and small companies. There was a steady increase in the Century share price as the two directors grabbed major bargains in the financial services company. The investment firm also went on an aggressive takeover campaign of some listed companies of which Century was top of the list.

Allied Conveyor, Amalgamated Health Services and Care Insurance Brokers were snapped up by ENG within six months.

The ENG directors began their long march up the Century share structure sometime in October last year. They intensified their bid as the company announced that it would seek more funds through a rights issue offer. The company’s share also shot up in October to notch $42, a value which analysts say was buoyed by speculation that prevailed in the market at that time.

In the space of three months the share had climbed to $42 from $5,40 a share in July-representing a rise of more than 600%.

Now the storm is over and Century is back to its humble region around $10 a share.

“The ENG directors started taking positions in Century as early as October. They could have scooped Century early this year,” said a broker who has been closely watching the Century shares on the market. “There was certainly a plan to take over Century. Unfortunately it was stifled by events in the market.”

Century is now one of the cheapest stocks on the market trading at $8 per share on Monday.