GOVERNMENT’S move to gain full control of the country’s third largest mobile phone operator by subscription, Telecel Zimbabwe, has hit a brick wall owing to an opaque shareholding structure within minority shareholder Empowerment Corporation (EC), which controls a 40% stake in the company.
By Elias Mambo
This comes on the backdrop of a forensic audit instituted by the Ministry of Information Communication Technology, Postal and Courier Services (ICT) to acertain the shareholding structure, as well as to verify how much was paid during the acquisition of shares by EC members.
The protracted EC ownership wrangle also continues at a time government has refused to honour James Makamba’s Kestrel Investment sale of the 40% stake to a local private equity firm. The initial attempt was made in 2015, where Brainworks had sought to acquire the shareholding for US$20 million, but failure to get a concrete agreement for EC shareholders saw the investment management company withdrawing its offer for the stake.
Sources said government views the Makamba sale of the 40% stake as a way of derailing its push to gain 100% control of Telecel Zimbabwe.
“Makamba’s 40% stake remains controversial as members of the local consortium are challenging his stake, claiming at one time he disposed some shares without their knowledge. EC had a 60% stake in Telecel and the 20% stake was sold to Telecel International and the transaction was not done in consultation with other council members,” said an EC source.
Lately, EC has been dogged by fights with regards the ownership of shares as various individuals and companies claim to have interest in the consortium.
The original EC shareholding structure shows that at inception, the Zimbabwe Farmers’ Union (9%), Affirmative Action Group AAG (9%), Zimbabwe National Liberation War Veterans’ Association (ZNLWVA) (9%), Indigenous Business Women’s Organisation (IBWO) (9%), National Miners’ Association (9%), Integrated Engineering Group (10%), Kestrel Corporation (15%) and Warehouse (30%). EC has previously had problems with shareholders disposing their stake without consulting the board. Documents seen by this newspaper also show that at inception EC was the majority shareholder with a 60% stake, while Telecel international held 40%.
Last week ICT minister Supa Mandiwanzira was reported to have said EC shares will only be purchased by a state-owned entity.
“I hear of some sale, but we don’t recognise any sale that’s not to government’s approved entity. Government of Zimbabwe made it very clear that it’s going for 100% shareholding in Telecel Zimbabwe,” Mandiwanzira said.
Mandiwanzira also said the sale of the 40% stake is aimed at benefitting original EC shareholders who have been sidelined over time due to ownership squabbles.
Government, through state-owned entity Zarnet, acquired a 60% stake of the company in February after the state-run pension scheme National Social Security Authority paid US$30 million to the Netherlands-headquartered telecommunications giant, VimpelCom, which had a majority stake.