THE long-drawn dispute over ReNaissance Financial Holdings’ representation on composite financial institution, First Mutual Ltd (FML)’s board
looked set for an amicable resolution after the two institutions agreed to appoint Professor Norman Nyazema to the FML board, businessdigest established this week.
ReNaissance’s bid to control FML suffered an embarrassing setback after the group failed to secure five seats for its representatives at FML’s annual general meeting (AGM) last month.
ReNaissance managed to push through three of its nominees to the FML board, with South Africa-based Nyazema and Dunmore Kundishora failing to make it after failing to garner enough votes to secure seats on the board.
ReNaissance chief executive officer Patterson Timba and Softex MD Tose Ndebele were elected to the board together with another of their nominees, Ricky Mapani, who heads Econet Investments, an investment arm of Econet Wireless Holdings.
The three had been recommended to the board by FML chairman, David Murangari, who snubbed Nyazema and Kundishora, but allowed them to stand for election.
Kundishora and Nyazema however lost by 100 million and eight million votes respectively.
In an indication suggesting that ReNaissance was moving closer to breaking the ice over the dispute, FML is said to have finally agreed to appoint Nyazema, who sits on both the ReNaissance and the Econet boards, to its board.
Sources said FML and ReNaissance reached the agreement following the resignation of Michael Frudd from the board three weeks ago.
The agreement means Nyazema, whose initial bid for a board seat was thrown out by FML’s shareholders at the company’s stormy AGM, will replace Frudd, who is understood to be relocating to Australia.
Nyazema’s accomodation means that ReNaissance, which has been battling for the control of FML for two years, will now have four representatives on the board.
“There have been talks to let Nyazema in. The talks have been going on for the past three weeks,” a source said.
Sources told businessdigest this week that the agreement represented FML’s desire for a settlement with ReNaissance which holds 26% in the insurance firm.
Relations between the two deteriorated over the past two years following the controversial acquisition of FML shares by ReNaissance.
ReNaissance bought most of the shares from an FML management consortium, Capital Alliance, which had failed to repay financial institutions which bankrolled its acquisition of a 20% stake in FML when the institution demutualised in 2003.
Capital Alliance now holds a paltry 2% in FML, while ReNaissance, which holds some of its interests in FML through various investments vehicles, controls close to 26% of FML.
ReNaissance had initially demanded five representatives to the FML board, a request that was flatly snubbed by FML management who queried the legitimacy of its stake because of the circumstances under which ReNaissance had acquired the shares.
At the AGM, Nyazema had been nominated by ReNaissance while Kundishora had been nominated by New Africa which is understood to hold a significant portion of FML shares on behalf of ReNaissance.
Nyazema and Kundishora’s failure to secure board seats followed the disqualification of 112 million shares owned by ReNaissance Merchant Bank and New Africa Nominees, both ReNaissance’s investment vehicles.
The shares were disqualified because they are subject to an ownership dispute between Capital Alliance, ReNaissance Merchant Bank and New Africa Nominees.
Although accommodation of Nyazema increases ReNaissance’s influence on the FML board, it still falls short of the number required to give them control.