HomeSportCaps takeover saga rages on

Caps takeover saga rages on

Enock Muchinjo

THE bid by Caps Holdings (Private) Limited to repossess Caps United Football Club took another twist after documents this week revealed that the phar

maceutical company had given up all advertising, branding and naming rights to current owner Twine Phiri when it disposed of part of its ownership in 2002.

But a source close to the deal has said the disposal could be annulled as it did not follow correct procedures.

According to Article 8 of the contract copy obtained by IndependentSport, “the name of the football team shall be maintained as Caps United Football Club until such time as the board of the new company revisits it”.

The company referred to is Caps United Football Club (Private) Ltd, a stand-alone joint-venture formed in 1999 by Caps Holdings and Phiri’s company, Twin-Con, that until now runs the team.

According to the source, Caps first came into the ownership of current proprietor Phiri when then Caps Holdings chief executive officer Ed Robinson decided that the company could no longer run the club and that “any entity had to stand alone and make money and that anything not viable had to be sold”.

The club management at the time then successfully lobbied against the outright sale of the team. They came up with the idea of a joint-ownership. Robinson agreed but correspondence between him and club officials shows that he had initially wanted the club to find another name.

Again, the club officials had it their way and managed to include the “Caps name right” in the contract. The officials were then tasked with finding a joint-owner for the new company, Caps United Football Club (Private) Limited.

Businessman Daniel Shumba, then chairman and sponsor of Jets Football Club, came close to becoming the partner in 1999 but the deal collapsed at the last minute after Caps Holdings rejected a condition that his company, Systech, becomes the IT equipment supplier to Caps Holdings.

When the Shumba deal fell through, Phiri then bought into the club. He paid $900 000 for his 50%.

Phiri agreed with Caps Holdings that “upon registration of the new company Caps shall transfer ownership of the Caps United Football Club franchise to the new company including the players and other Caps United Football Club-related issues”.

However, IndependentSport has also established that proper procedures as specified in the contract may not have been followed when the Caps Holdings management decided to dispose of the remaining 50% to Phiri. This is why, according to sources, the current Caps Holdings board believes it can get back the team.

In 2002, Caps Holdings decided to dispose of part of its ownership after it became difficult for Phiri to contribute to the team. Caps Holdings at the time was forced to contribute the bulk of the team’s operational costs.

“Each part had to contribute to the budget,” the source said. “But Phiri’s business was going through a difficult spell and he was struggling to contribute. One part was injecting the money and Caps decided to give up all football matters.”

Mudiwa Mundawarara, Caps Holdings CEO at the time of the disposal, requested to be excused from commenting on the issue, saying he was not privy to the deal.

It also emerged that the decision to dispose of the remaining shares was subject to approval by the Caps Holdings board.

“Indications are that the decision was made without the approval of the board,” the source said.

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