KINGDOM Meikles African Ltd (KMAL) chairman John Moxon and his family have rejected Econet Wirelessâ€™ proposal to cancel the merger between Meikles Africa Ltd (MAL), Kingdom Financial Holdings Ltd (KFHL) and Tanganda.
Econet which is the single largest institutional investor in KMAL with 11% said the reversal of the deal between Kingdom, Meikles Africa and Tanganda was the only way to end the dispute between KMAL CEO Nigel Chanakira and Moxon.
Sources this week said Moxon and his business assocuiated had rejected the scheme of arrangements citing â€œformal and informal hurdles which needed to be finalised firstâ€.
The Moxon family is said to be cautious of the agreement as they fear that it violates the rules of the Johannesburg Stock Exchange. They have also sought clarification with respect to similar Zimbabwe Stock Exchange regulations.
â€œThey (Moxon family) also need to be equally cognisant of London Stock Exchange regulations in this respect,â€ officials said yesterday.
The Econet plan seen by the Independent this week proposes the parties to the dispute shall withdraw any litigation between them and that the directors of KMAL shall withdraw any litigation against Moxon or any company associated with him.
Econet proposed that within 48 hours of the signature of the agreement, the current board of KMAL shall be restructured into an interim board through the appointment of additional representatives of the Moxon family such that they will have six representatives on the board.
The interim board, it is being proposed wouldÂ restructure the KMAL Group before shareholders vote at an EGM in favour of a scheme of arrangement in which:
- KMAL shall transfer to its shareholders pro rata to their shareholdings in KMAL 100% of the issued share capital of Kingdom Financial Holdings Ltd, simultaneously with the transfer by KMAL to Kingdom Financial Holdings Ltd of 100% of the issued share capital of Tanganda;
- l KFHL shall re-list on the Zimbabwe Stock Exchange;
- Â The interim board of KMAL shall resign upon the completion of restructuring of the company and a new board shall be appointed;
- Â The Moxon family shall appoint the chairperson of the board of Meikles Africa Ltd;
- Â They will also appoint four more directors of their choice, provided that in making the appointment, they will be sensitive to the possible impact of the indigenisation legislation on the composition of boards.
- Â Econet shall appoint two board representatives;
- The parties shall appoint an additional two directors by consensus to represent the interests of minority shareholders,
- Â The new board of directors shall appointed all the subsidiary boards;
- The Moxon family shall have management control of the company, subject to the authority of the board, the document said.
After this the current directors of the board Kingdom shall resign upon the completion of the restructuring of the company and a new board shall be appointed as follows:
- Â Econet shall appoint the chairperson of the KFHL board;.
- Â The Moxon family shall appoint two directors of its choice;
- Â Econet shall appoint an additional two board representatives;
- Â The parties shall appoint Nigel Chanakira as an executive director and as the group CEO of Kingdom plus an additional non- executive director nominated by him.
- Econet and the Moxon family shall appoint two additional directors by consensus to represent the interest of minority shareholders provided that such appointees shall not be connected to either of them or to Chanakira and shall be people of integrity who will be able to serve the best interest of the company.
- Â The same directors shall be the directors of Tanganda and shall be responsible for the appointment of the directors of the other subsidiaries.
The parties shall procure that TM Supermarkets conclude a commercial agreement with Kingdom Bank for all its banking business of be handled by Kingdom bank.
Businessdigest understands that each member of the Moxon family would need to agree in their independent capacity to any development that will be discussed in future.
Sources close to Moxon said he on Monday questioned why they wanted to enter into contractual arrangement with him when he was specified.
â€œWhether or not the specification position was valid he (Moxon) fears that it could be mischievously used against his best intentions to further their interest,â€ sources said.
The Moxon family said it wanted the KMAL issue solved by all the â€œactors involved as soon as possibleâ€ but not in the press or the courts.
BY PAUL NYAKAZEYA