HomeBusiness DigestKMAL goings-on: More questions than answers

KMAL goings-on: More questions than answers

THAT a merger of the old order and the new would most likely end in tears was predicted. However, what few could have ever seen coming was the curious assortment of interests that would gather to pick up the pieces of the failure of the Kingdom and Meikles merger.

When news first broke in 2007 that Meikles Africa, one of the country’s oldest companies, was to merge with Kingdom Financial Holdings, one of the many start-ups on the local financial scene, the market’s initial reaction was how tough it would be to hold these two sides together for long.
On one side was one of the country’s newest banking groups, while on the other was a hugely conservative group, whose Victorian hotel lobbies are still adorned with portraits of colonial-era family relics like Thomas Meikle.
Now, in the words of Alice in Wonderland, “it gets curiouser and curiouser”.
Last week, Econet surprised the market by announcing a US$17m sale of its stake in Kingdom Meikles Africa Ltd.  While the sale itself was big news, the market has been left to digest a heap of questions since the sale.
The identity of members of the consortium that bought the stake — Loakcape Investments — is one major source of questions.
And the market, normally a laid back one with few scandals and corporate battles, cannot help anticipating another round of bruising corporate brawls should the acquisition fail to stand the legal heat. Can shares in a specified company be traded, or is it that shares cannot be traded only where those that hold them are the ones specified?
ZSE chief Emmanuel Munyukwi says there is nothing irregular if shareholders sell shares in a specified company.  He said: “I don’t see any problem with the transaction. These are transactions between shareholders, if they are not specified.”
But questions remain. So, what good can ever come out of the likes of Themba Mliswa, Philip Chiyangwa, Rainbow Tourism Group CEO Chipo Mtasa and a corporate shark like John Moxon sitting together in those black oak boardroom chairs associated with the old order?
Another question surrounds Mutasa, who is CEO of Rainbow Tourism Group, one of the largest listed hotel and leisure group’s in the country. Does her acquisition of significant shares in a rival hotel group not present a curious case of conflict of interest? Why is she buying into a rival hotel group, more so one that is specified? How would she handle the publicity that will likely arise over the legality of the deal?
For the likes of Mliswa, any publicity is good.
Mliswa is a former fitness trainer who shot to prominence a few years ago for land grabs. Now, Mliswa has moved his game up a notch. Recently, he announced he had acquired an 8% stake in Premier Banking Corporation, which the bank denied, saying it did not need his money.
Mliswa is also something of political royalty, with listening ears in the old order of Zimbabwean politics, including, he would like to claim, the most powerful ear of them all. He is currently secretary of lands for Zanu PF in Mashonaland West province.
Chiyangwa, who is no stranger to controversy, is rather the most publicly recognisable face in the consortium. Last year, he listed his engineering firm — Zeco — on the ZSE and is a major player on the property market via his Pinnacle Properties. He has claimed to be related to President Robert Mugabe, and is a former Zanu PF provincial chairman.
So, just how compatible will the likes of Themba Mliswa and Philip Chiyangwa be with the Moxon axis, which, judging by the way it has handled Nigel Chanakira, remains very much a bastion of conservatism and tradition?
Inside the consortium — Loakcape Investments — are the characters themselves compatible?
How is Mtasa —-a relatively low key corporate figure — going to get along with Mliswa and Chiyangwa, who have little to no public corporate culture to talk about? Will Mtasa, a small fish, swim the murky business waters together with these sharks? Will it be another shark tale?
It is curious, and only time will tell.
Post-demerger, should it follow through as expected, it will mean this consortium will own a significant stake in Kingdom Financial Holdings Ltd. More “curiouser and curiouser”.
Will Chanakira be able to work with Mliswa and Chiyangwa?
Chanakira founded Kingdom Bank and has steered it through turbulent times and is a breed apart from the political princes. He could get along with Mutasa, a corporate off spring through and through, but his relations with the other members will indeed be curious.
What are relations between Chanakira and this outfit be like? Will Chanakira work with these politicians or individuals with such connections?
Judging by the manner he handled his row with Moxon, he could either supper with the devil or wash his hands off politicians, system and its products.
Even more “curiouser and curiouser” is whether Chanakira or any other KMAL shareholder did not have first right of refusal on the stake?
It would have been assumed that Econet founder Strive Masiyiwa, who enjoys, or enjoyed, a cozy business and reportedly personal relationship with Chanakira, would have offered his buddy pre-emptive rights to his shares in the event of a sell off. Worryingly, therefore, is whether the sell off marks the end of a business relationship between the two icons of black business.
Econet says the decision was in keeping with plans to exit all non-core investments. The group still holds on to Africa Renaissance Corporation Ltd, although this too is being reduced. It also holds shares in RTG and a controlling stake in unlisted Mutare Bottling Corporation.
Could an irreconcilable strategy difference in dealing with the Moxon dispute have motivated Masiyiwa — a schemer who stays in the corporate shadows while trying to leave no fingerprints at the same time — have been the motivation for the decision to sell?
Chanakira’s Draft affidavit lodged with his lawyers before he was airlifted to South Africa provides some clues. In the draft, Chanakira cites possible conflict of interest with Econet chairman Tawanda Nyambirai on how the de-merger would proceed and how best to iron out the Moxon debacle. Nyambirai once acted as Chanakira’s lawyer as well as his go-between with Moxon. At the same time, he also represented Econet’s interests.
And, one final question, in this unusually dry market, how did the group fund this transaction?


Chris Muronzi

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