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Only shareholders should resolve dispute — Meikles

MEIKLES Africa Ltd has written to Reserve Bank Governor Gideon Gono saying only shareholders should resolve the dispute pitting its majority shareholder, John Moxon, and Kingdom Financial Holdings (KFHL) founder Nigel Chanakira.

Gono had given Chanakira and Moxon an ultimatum to resolve their dispute by the end of August, threatening the two feuding businessmen with unspecified action.
In a letter to Gono dated August 23, Meikles chairman Farai Rwodzi said his board would adopt the wishes of its shareholders when the company holds its Extraordinary General Meeting (EGM).
Meikles was blocked from holding an EGM by Gono and has not yet indicated when it will hold the meeting to chart the way forward in its frosty merger.
Meikles said Chanakira, through his company Valley Field (Pvt) Ltd, had presented three offers which they said were “off the mark” from the initial agreement.
“In the event of an acceptable offer made before the EGM, such an offer will be put to shareholders for approval,” reads the letter in part.
“Please note an offer can now only be accepted by shareholders. The board will only adopt what shareholders would have agreed,” the letter said.
The EGM’s main business would be to amend the terms of the de-merger resolution adopted by shareholders in June last year, which gave Chanakira a chance to agree terms with Meikles and Econet Wireless Zimbabwe to acquire the two investors’ equity interest in KFHL.
If shareholders give the nod, the Meikles board would proceed to de-merge the two entities with Moxon maintaining his 43,9% stake in the group. Chanakira would be a minority shareholder in Kingdom Financial Holdings Ltd (KFHL) with a 6% stake.
Moxon would also be entitled to two board representatives as the single largest shareholder in the financial services company.
Two weeks ago Gono and Finance minister Tendai Biti told Chanakira and Moxon that they had “had enough of this nonsense” and warned that they would be forced to take “drastic action”.
“We are not sure that either shareholders of Meikles or Kingdom will benefit in the end,” Gono said in a local paper a week ago.
Chanakira could lose KFHL after Meikles Ltd recently rejected his offer to buy its 43, 95% stake in the firm.
He had been given until August 6 to present an acceptable plan on how he would raise US$15 million to buy Meikles out of Kingdom.
Meikles said Chanakira’s plan of action did not meet their expectations.
The banker had proposed to pay US$7, 5 million within 30 days while the balance would be settled over six months, saying he had the backing of a financial institution that he could not disclose to Meikles.
The Meikles board would not accept the proposal saying there was no guarantee that Chanakira would pay up and that the bank would approve his loan application.
Insiders at Kingdom yesterday said the KMAL saga had reached a stage where the two opposing parties spoke to each other and the outcome now depends on shareholders.
Analysts said RBZ had no formal or official role in the KMAL dispute.
Chanakira’s Kingdom Bank entered into a merger with Meikles to form Kingdom Meikles Africa Ltd (KMAL) which also included Tanganda and Cotton Printers in 2008.
The merger only lasted for 18 months after major differences between Chanakira and Moxon emerged, leading to the proposed de-merger.
Gono said the dispute had ceased to be a Chanakira-Moxon matter as they were jeopardising the stability of the banking sector at a time when the public “will soon see the decisive resolution to all other outstanding disputes involving Trust, Royal, Barbican and Intermarket banks as well as other cases which may have involved allegations of externalisation of funds such as Shabanie Mashaba Mine”.
He alleged both parties in the dispute should be reminded that “none of them had absolutely clean hands to show to the public of Zimbabwe in terms of historical conduct”.

 

Paul Nyakazeya

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