CAPITAL Alliance (CA), one of the biggest management empowerment ventures on the market, is in the process of winding up its operations, businessdigest can reveal.
CA was formed in 2003 by First Mutual Ltd (FML) executives to take over 20% of the insurance company when it demutualised.
The proposal to wind up operations was made at a meeting held on February 28. The meeting was convened to decide the fate of the company.
The meeting was attended by four of the original CA shareholders who are Pelagia Kafesu, Godfrey Jowa (now based in Malawi), Douglas Hoto (head of Altfin) and Norman Sachikonye.
Sources who attended the meeting said the four directors agreed to appoint Matamba & Company Chartered Accountants to carry out the process in accordance with company and tax laws.
The meeting however did not discuss the time frame for the winding up.
Businessdigest understands that the meeting resolved to give former First Mutual Ltd (FML) chief executive officer, Norman Sachikonye, his shareholding which he had lost in 2005.The High Court ruled last December that Sachikonye was still entitled to his shareholding in CA.
Sachikonye now effectively controls his 3900 shares in CA â€” translating to 26% of the management investment vehicle.
This was after Sachikonye challenged CAâ€™s decision to dispossess him of his shares on the basis that he had ceased to become a member of the empowerment vehicle when he resigned as FML chief executive on June 1, 2004.
The meeting also adopted a proposal tabled by Hoto and Kafesu to revert to the original shareholding allocations adopted in 2003.
“The shareholders agreed to revert back to the original shareholding of 2003 and distribute value based on those stakes for all members,” the source said.
Kafesu told the meeting that some partial distributions of shares had already been done according to the original shareholding stakes and that it would be logical to adopt the same basis for shareholders that were yet to be paid.
The meeting also resolved that Kafesu hold discussions with the current board of the company and “co-opt” Sachikonye, Hoto and Jowah as board members.
This, it was agreed, will give the necessary authority to the Board to proceed with the winding up of the company. The issue of litigation between Capital Alliance and Renaissance Merchant Bank (RMB) was discussed with the members resolving that the case continue as there were reasonable prospects of increasing the value of the company.
The four participants agreed that the case had been one of the major points of difference between members of the working party and that they had been satisfied that a common position had been reached.
The long-running court dispute on Sachikonyeâ€™s shares came after Hoto â€” who took over from Sachikonye as FML chief executive in 2004 â€” convened a meeting of CA members in October 2005 to decide on how to handle Sachikonyeâ€™s stake in CA.
At that time, Hoto held 12,50% of CA. Other CA members to attend the meeting included Kafesu (12,50%), Biti (10%) and FML company secretary Sheila Lorimer (1,20%).
The meeting resolved that the former FML executives, including Sachikonye, were no longer entitled to hold shares in CA and re-distributed their shares to the existing shareholding.
Other former FML executives to have their shares redistributed along with those of Sachikonye were Jowah (12,50%), Oliver Kamindimu (2,40%), Maxwell Bero (1,20%) and Simba Dodzo (1,20%).
The five former FML executives were not paid for their stakes.
After the distribution, Hoto and Kafesu increased their shareholdings in CA to 22,05% each making them the majority shareholders.–Kuda Chikwanda