Zimplow Holdings’ financial director Francis Rwakonda is set to step down soon amid indications he has been serving notice, businessdigest has established.
Management and board members said Rwakonda and Zimplow had agreed to a mutual separation.
Zimplow chairman Zivanai Rusike said Rwakonda was leaving after the parties agreed to a mutual separation agreement.
“We would like to confirm that Mr Rwakonda is indeed leaving the company, but this is as result of an agreed mutual seperatuion basis,” Rusike said.
“… As a matter of interest, Mr Rwakonda and the company are in possession of the relevant, signed and mutual separation agreement as negotiated between the parties.”
A mutual separation agreement is a gentlemen’s negotiated exit.
Additional questions on why Zimplow did not exercise its rights as provided for by the Labour Amendment Act of 2015, which allows employers to fire workers on a three months’ notice and pay a two weeks salary for every year served, had not been responded to at the time of going to print.
Nigel Moore, a representative of Sino Properties, an offshore investment vehicle that was used to acquire a controlling equity in Zimplow when the company floated a rights issue early this year, confirmed that an audit had been conducted at the instigation of new shareholders, but insisted this was for other purposes.
“There is an audit yes, that was requested by the new shareholders, but this was for other purposes,” said Moore.
Asked why the parties had to enter into a mutual agreement to part ways in the wake of the labour law reforms empowering employers to fire workers on three-months’ notice and pay two weeks’ salary for every year served, Moore said it was common practice. A legal expert said top executives can be fired under labour law reforms, but can still cut deals and largely depended on the contract.
“That is common practice that when employees are leaving, they enter into such agreements,” he said. “And I have read about that law you are talking about a while back.”
Asked what was contained in the audit report, Moore said he did not know off-hand, adding he had other responsibilities in the company such as strategy and marketing.
“There was a due diligence to validate the net asset value of the company and to look at internal controls. That audit was done in February. But you know there are a lot of things when new shareholders come, such as operating style, which shareholders may not like,” a board member said.
Another source on the board confirmed that before the rights issue, there was an audit to determine the NAV.
“I hear he (Rwakonda) is looking to go into business in Kenya,” the source said.
Sino Properties (Proprietary) Limited, an investment vehicle domiciled in Mauritius, holds 59,4% equity of agro-industrial firm Zimplow following an undersubscribed US$5 million rights issue.
Zimplow is going to announce the changes next week. Sino Properties acted as the underwriter for the transaction.
The rights issue had a 40,53% subscription level, meaning the underwriter had mopped up 59,47%.
Out of the total number of rights offer shares (77 840 000), the ordinary rights offer shares subscribed amounted to 31 548 469, while ordinary shares issued to the underwriter were 46 291 531.
The group earlier this year sold its property for US$3,2 million to extinguish expensive short-term debt that was eating into the bottom line.
The company had short-term debt of US$13 million.
Zimplow acquired Tractive Power Holdings. Prior to the latest transaction, Sino Properties was already the largest shareholder in the agricultural equipment company.
Sino represents a Singaporean company which has interests in mining, and has other interests in the country.