HomePoliticsButau Plots rivals’ Ouster

Butau Plots rivals’ Ouster

FIRED chairman of Dande Capital Holdings (DCH) and former Zanu PF legislator David Butau has launched a campaign to regain control of the company by convening an extraordinary general meeting to oust four rival shareholders.


Impeccable sources in DCH and documents in possession of the Zimbabwe Independent reveal that Butau — who was stripped of his chairmanship and directorship of the company in February — wanted co-shareholders Danisa Mhlanga, Evison Musanjeya, Wilfred Hlanguyo and Decent Chitsungo removed as directors.

The boardroom tug-of-war at DCH, a firm that offers financial advisory services to local, regional and overseas organisations, erupted when High Court judge Justice Lavender Makoni on February 4 granted an application by Mhlanga, Musanjeya, Hlanguyo and Chitsungo for Butau’s ouster from the company’s board of directors for absenting himself from its meetings in excess of six months without permission.

Makoni also barred Butau’s brother, Grey, from interfering in the running of the company and confirmed that Mhlanga, Musanjeya, Hlanguyo and Chitsungo were the legitimate directors of DCH.

Butau fled Zimbabwe in December 2007 when police said they intended to question him in connection with dealings in foreign currency on the black market and only returned to the country last month to launch a fight to regain control of DCH.

He is currently on bail on allegations of attempted fraud, fraud and violation of the Exchange Control Act and Exchange Control Regulations.

In a notice to convene the extraordinary general meeting on April 20, Butau said the current board of DCH must be reconstituted by firing Mhlanga, Musanjeya, Chitsungo and Hlanguyo.

A reconstituted board made up of Butau as chairman and Tapera Mavura and George Chikupo would be appointed during the meeting, wrote the former Guruve North MP.

Butau said he wrote the notice on behalf of shareholders holding 55,2% of the issued share capital of the company.

He said the convening shareholders were of the view that there was general plundering of company assets and an attempt to take over the ownership of the firm by some members of the board of directors in manner that was inconsistent with their mandate.

“There is discord between certain members of the board of directors of the company (“the board”) and its executives which is hampering the board’s ability to function effectively and in the best interests of the company,” the notice reads. “This discord is negatively impacting on the company’s ability to sustain the company’s operations and to pursue new opportunities which are required for the continued growth of the company and the board cannot continue functioning as it is at present in such state of discord. There is no production at all.”

The convening shareholders, the notice added, had lost confidence in the board as presently constituted and were of the belief that it needed to be reconstituted.

They want it restructured to “address the current state of discord which exists between board members, to end the current impasse at board level, to make the board more representative of all shareholders, to supplement the experience of the remaining board members and to add to stature of the board”.

The fight to control DCH has also seen Hlanguyo filing a criminal case against Butau after the ex-MP allegedly threatened the director in connection with a vehicle he was using on March 16.

Butau on Wednesday confirmed the convening of the extraordinary meeting of shareholders.

“The meeting will go ahead,” Butau said. “I am the majority shareholder and I cannot allow the plunder of assets currently going on.”

DCH was incorporated in 2000 and re-registered in 2002.

The company has seven subsidiaries — El’e Resources (Pvt) Ltd, Cynthesis Agriculture (Pvt) Ltd, Cythensis Cotton (Pvt) Ltd, Tsakare Chickens (Pvt) Ltd, Timbsbury Timbers (Pvt) Ltd, Heldnet Enterprises (Pvt) Ltd and Telequip (Pvt) Ltd.

Butau fled to Britain on a six-month tourist visa before later moving to Pretoria, where he was holed up until March 6 this year.

He returned home after arrangements with the Attorney General’s office that facilitated travel documents for him after he lost his passport in South Africa, and is due to face trial for alleged fraud.

The state alleges that on October 19 2007, Butau asked a Joseph Manjoro to deposit Z$562,5 billion into his company, Nyamasoka Farming’s CBZ account after having agreed that he would source US$450 000 using a parallel market rate of US$1:Z$1 250 000 to purchase tractors from Michigan Tractors of South Africa on behalf of the government.

“After receiving the money, and during the period extending from October 25 to December 19 2007, the accused sourced foreign currency from the parallel market, which foreign currency was never remitted to Joseph Manjoro,” reads the state outline. “When he did so, the accused knew very well that he had no exchange control authority to deal in foreign currency thereby contravening the said (Foreign Exchange Control) Act.”  

The state alleges that after receiving the Z$562,5 billion and converting it on the parallel market, Butau gave Manjoro a copy of a telegraphic transfer dated October 23 2007 purporting that he had transferred US$450 000 to the credit of Michigan for the purchase of equipment meant for the Farm Mechanisation Programme.

Verifications made by Manjoro with Michigan proved that no funds were deposited by the accused and when asked to clarify the issue, Butau allegedly asked Manjoro to hand him back the copy of the telegraphic transfer.

He then gave Manjoro a copy of cheque number 100146 for 215 000 British pounds drawn upon his HSBC account number 82435063 domiciled at Channel Islands, United Kingdom, to the credit of Michigan South Africa.

The accused caused the cheque to be deposited into Michigan tractors held by Standard Bank of South Africa.

However, the cheque was returned by HSBC Bank late in November 2007 unpaid marked “refer to drawer”.

The state alleged that Butau issued the cheque even though he knew he had insufficient funds in his account.

As a result of this misrepresentation, the state alleged, government suffered a prejudice of Z$562 billion and nothing was recovered. 

      
Last week, a Harare magistrate dismissed Butau’s bail application on the basis that he may abscond.
Butau is out of custody on bail.

BY CONSTANTINE CHIMAKURE 

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