HomeBusiness DigestCFI issue a fraud attempt: Van Hoogstraten

CFI issue a fraud attempt: Van Hoogstraten

British business tycoon Nicholas Van Hoogstraten has refuted claims by Hamish Rudland that he failed to follow his portion of rights at CFI Holdings (CFI), saying he did not want to endorse a fraud.

Chris Muronzi

In an interview in the capital this week, van Hoogstraten told businessdigest that Rudland’s claims were “rubbish”, adding he did not permit the rights issue to go ahead because the businessman was trying to commit a fraud at CFI through a rights issue.

“I didn’t fail to follow my rights. It was not a case of me failing to raise my share of the rights issue. We didn’t want them repeating what they did at Zimre Holdings. NMB pretended to be the underwriter of the ZHL rights issue. Well, at CFI they can’t do that without 75% special resolution,” he said.

“We could not sit around and wait for them to repeat that same fraud.”

Van Hoogstarten claims he stopped the Rudlands, who emerged with a majority 40% equity stake in Zimre, from proceeding with a plan that would have seen them underwriting a rights issue at CFI and a possible majority stake had shareholders failed to follow their rights.

He said the Rudlands attempted to take over CFI after they got a Mauritian bank to issue a letter of credit to sub-underwrite the diversified group’s rights issue.

“The same trick was also due to be effected at CFI with a Mickey Mouse rights issue ‘sub-underwritten’ by a letter of credit from a ‘bank’ based in Mauritius which is one of the main money laundering centres of the world,” van Hoogstraten told businessdigest last month.

“As you know I am the major shareholder in CFI, so I was able to stop the so-called rights issue and then ensured that an investigation was made into Zimre which holds shares in CFI on behalf of Fidelity and Nicoz.”

Van Hoogstraten this week said he would block covert plans to take over CFI.

He is the single largest shareholder in CFI.

This comes in the wake of revelations that the Securities Commission of Zimbabwe (Secz) has launched a probe into a deal that saw the Rudlands emerging with a majority shareholding in Zimre.

Van Hoogstraten says he alerted authorities when the Rudlands tried to get the CFI board to consent to a rights issue that would have been underwritten by the Mauritians.

“I am the one who was responsible for alerting the Reserve Bank and other authorities of this fraud. The Rudlands are fronting for a group of South African/Mauritius-based persons of Pakistani origin. The Rudlands have no serious money themselves, just look at Unifreight with a market capitalisation of less than US$1 million — another Zeco,” he said.

A source close to Zimre said NMB bank does not have capacity to underwrite the rights issue.

“NMB didn’t have capacity to act as underwriters. It’s clear they were acting on behalf of someone,” the source said. “They got millions from this deal.”

NMB has cited confidentiality around the deal.

The Reserve Bank of Zimbabwe (RBZ)’s anti-money laundering unit, Financial Intelligence Inspectorate and Evaluation Unit (FIIE Unit), is looking at whether NMB Bank used depositors’ funds when it underwrote the US$15 million capital raise and whether the money was already onshore.

“The FIEE unit bungled the job. They sent a letter alerting the bank that they would be doing an investigation. An investigation like that is supposed to happen without prior warning. It leaves a lot to be desired on the part of the RBZ. They are just not serious. This is the same as telling an armed robber that on such a day we are going to be raiding your house and we are looking for money and the weapon used,” the source said.

Hamish Rudland early this month accused van Hoogstraten and Nssa of playing what he described as “petty political games in their quest to try to frustrate other shareholders” such as Zimre, the company’s largest shareholder with a 28% equity stake.

Rudland said Nssa represents the public and should act responsibly in making decisions that benefit all stakeholders.

Zimre has been ready to recapitalise CFI, he said.

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