On the other sat a man who controls one of the largest family-owned businesses on the market, driven to the edge by his rival’s convictions and is a staunch believer in control. So, when a settlement was finally reached last year with Kingdom Bank founder Nigel Chanakira emerging with a 43% stake in KFHL, the highest shareholding he has controlled after listing the bank, observers saw problems in the settlement from the word go.
Meikles had extended US$22,5 million to Chanakira’s KFHL for statutory capital requirements in happier times. Naturally, this had to be paid back somehow.
Once the US$22 million had been paid back, Chanakira would get 43% of KFHL’s total issued share capital, it was agreed last year.
But the adoption of multi-currencies last year meant that a lot of businesses would be starting from scratch after capital was eroded by runaway inflation.
And KFHL, like all other businesses, was not spared. Against such a background, raising US$22,5 million was always going to be an uphill task. Even rights offer subscription results on the market in the past year lend credence to such worries. First came the March deadline for Chanakira to pay up but he failed. Then came the August one which he failed to honour.
By the end of the first half of the year, Meikles Ltd CEO Brendan Beaumont says he had received a number of proposals that he described as “meaningless”. Beaumont told the Zimbabwe Independent in June that he once received three offers inside a week on how to settle the debt.
When a settlement was agreed last year, Chanakira was given up to end of March to meet his side of the bargain but failed, prompting Meikles to extend the deadline twice. Now, it seems Meikles’ patience has run out and the company is content having Chanakira’s banking group as a subsidiary. Judging from Meikles’ reaction to Chanakira’s failure to settle the debt, Chanakira seems set to lose control of a bank he founded a decade ago unless if a miracle happens.
And that miracle might just have come in the form of the central bank’s intervention over the weekend ordering Moxon and Chanakira to settle the issue by end of this month.
Analysts see Reserve Bank of Zimbabwe Gideon Gono’s involvement in the matter as an attempt to save Chanakira from losing his financial services empire.
But Gono says he is more concerned with the security of the banking sector as a whole than anything.
He said: “Developments at Meikles and Kingdom Bank are worrisome to both the Ministry of Finance and Reserve Bank of Zimbabwe. The disputes have gone on for far too long in a vague and inconclusive way that is not only damaging the two organisations and their respective shareholders but also threatening the stability of the banking sector in particular and the economy in general.
“Both the Minister of Finance and myself as government have had enough of this nonsense and are calling on all parties to the dispute to resolve this matter once and for all before the end of this month.”
But analysts say government should not intervene in the dispute, arguing it is purely about ownership and acceptable in business.
Gono also told both Chanakira and Moxon that they were not squeaky clean. He remained vague on the consequences . Below is a timeline of the Kingdom Financial Holdings Ltd and Meikles Africa Ltd saga:
July 2007: In separate statements, Meikles Africa Ltd and Nigel Chanakira’s Kingdom Financial Holdings Ltd announce plans to merge their businesses. Also coming to the party were Tanganda and Cotton Printers.
Decemeber 2007: Shareholders okay KFHL and Meikles merger.
December 3: KMAL list on the ZSE.
September 2008: Moxon attempts to kick Chanakira and Calisto Jokonya and Rugare Chidembo off the KMAL board.
October 2008: Chanakira attacks Moxon and accuses him of externalisation. A few days later, the banker deposits an affidavit with the police highlighting Moxon’s financial misdemeanors.
KMAL board passes vote of no confidence in Moxon alleging “recklessness”. The board accuses Moxon of making unilateral decisions and issuing statements without consulting them among other charges.
February 2009: Moxon is specified.
March 2009: Chanakira and Moxon fight escalates after the two fail to reach a deal following a meeting in South Africa. At the meeting Moxon demands immediate demerger of KMAL as soon as possible, the appointment of directors to the Meikles Africa Ltd board and the lifting of his specification order. But Chanakira urges him to return home and face the music and face possible imprisonment.
April 2009: Moxon refutes Chanakira Entitlement Claims. Moxon tears to shreds claims by Chanakira that he is entitled to 51% of the company in indigenisation option rights and called the banker “delusional”.
Moxon and his family reject an Econet Wireless proposal to cancel the merger between Meikles Africa Ltd KFHL and Tanganda.
October 2009: Econet Wireless announces the sale of its 10% stake to a consortium of local businesspeople composed of Chipo Mtasa, Langton Nyatsambo, Temba Mliswa, Rugare Chidembo and Philip Chiyangwa. Econet’s move to exit KML leaves Chanakira without any backing in his fight with Moxon.
l Chanakira collapses and is airlifted to South Africa.
l High Court stops Kingdom Meikles Africa Limited Extraordinary General Meeting (EGM) after Chanakira’s lawyers sought an interdict barring the meeting until he has recovered.
l The battle between Moxon and Chanakira to control Kingdom Meikles Ltd (KML) is settled after the two protagonists agree on the finer details of the company’s demerger.
l Moxon and Chanakira make peace. Chanakira emerges with a 49% stake in KFHL after cornering Moxon politically but is told to pay back US$22 million to Meikles.
l Chanakira resigns as KML CEO in line with the settlement.
l Chanakira accuses Econet Wireless’ Tawanda Nyambirai of not representing the banker’s best interests.
November 2009: (KFHL) CEO Onias Makamba gets a US$200 000 golden handshake from the banking group after he was eased out of the financial institution amid suspicion the executive could have been siding with a camp controlled by Moxon.
December 2009: Chanakira claims his dream to list KFHL on Wallstreet is alive.
April 2010: Temba Mliswa accuses KMAL chairman Farai Rwodzi of attempting to keep the fitness expert-cum-politician-cum-businessman off the board by paying him board fees without his actual presence.
Mliswa further alleges a spook plot as Rwodzi fights him off the board.
May 2010: Moxon is de-specified.
l Meikles Ltd CEO Brendan Beaumont says KFHL is still his company’s subsidiary in an interview with the Zimbabwe Independent.
Beaumont says Chanakira’s offers are unrealistic. He claims the banker once made three different offers to settle the US$22 million inside a week.
l Chanakira fails to finance demerger for the second time.
August 2010: Chanakira’s bid to buy back Meikles 43% stake falters after he fails to pay back US$15 million.
Banker looks set to be kicked off KFHL, a company he founded.
Gono orders Moxon and Chanakira to settle their disputes by end of August or face unspecified action.
Story still unfolding…