Financial Gazette (Harare)
Shame Makoshori
11 October 2008
Harare — PATTERSON Timba's Africa First ReNaissance Corporation (Afre) took a giant step this week to block Kingdom Meikles Africa Limited (KMAL) majority shareholder, John Moxon, from convening an extraordinary general meeting (EGM) at which the Meikles family would dismiss from the board Kingdom founder, Nigel Chanakira, and two other directors.
Afre, which owns 0, 64 percent of the KMAL stock, on Friday filed an urgent High Court application to compel the merged Group and a cluster of companies represented by Moxon to release information that would enable minorities to make an informed decision on the contentions issue prior the EGM.
An EGM to deliberate the proposed ouster of Chanakira, Callisto Jokonya and Rugare Chidembo has been set for October 23.
But with the latest turn of events, the EGM might be moved to a later date to give the High Court enough time to rule on the matter.
A postponement of the EGM, according to sources, would give Chanakira room to engage Moxon at both political and business levels to end the impasse.
Should Timba and other minorities fail to buy more time, Moxon, with 42, 9 percent of the KMAL in his kitty, would certainly carry the day on October 23.
Afre executive chairman, Timba, argued in court papers filed on Friday that the major shareholders in KMAL were keeping full details of the impasse, being narrowed down to differences between Moxon and Chanakira, close to their chests.
In calling for the EGM, the Meikles family is alleging "discord" between certain members of the KMAL board and its executives that has watered down the effectiveness of the board.
But Timba alleges that the failure to make available all the requisite information might prejudice minority shareholders whose combined value in KMAL is estimated at more than US$200 million.
He cites ACM investments as the first respondent. The other respondents on the matter are; JRTM Investments (second); ASH Investments (third); FPS Investments (fourth); APWM Investments (fifith) and KMAL as the sixth respondent.
Timba's lawyer, Adding-ton Chinake said any changes to the Group's directorship should comply with the Banking Act, since KMAL became a bank holding company after last year's merger.
Chinake, in documents filed at the High Court last week, said if the EGM went ahead as planned, it would also be in complete violation of the Zimbabwe Stock Exchange (ZSE) Act.
Clause 3:45 of the ZSE listing requirements state in part: "A listed company must ensure that all the necessary facilities and information are available to enable holders of securities to exercise their rights. In particular, it must: (a) inform holders of securities of the holding of meetings which they are entitled to attend (b) enable them to exercise their rights to vote, where applicable; and (c) publish notices in the press or distribute circulars in terms of the listings requirements."
"The notice and the circular in respect of the EGM has not been published by the First to Fifth respondents or their board of directors in two national papers as required by the law," argued Chinake. "There has been no publication of any information relating to the proposed resolutions. Applicant has not received the circular that has been referred to in the numerous newspaper articles. It is just and equitable that all shareholders in "Sixth" respondent be given an opportunity to consider the full facts alleged by the First to Fifth respondents before the 23rd October 2008," reads part of Chinake's argument filed last week.
A product of the highly publicized merger between Kingdom Financial Holdings Limited, Meikles Africa Limited, Tanganda Tea Company and little known Cotton Printers, KMAL has been ripped apart by intense boardroom squabbles in the past week.
Sources said the boardroom wrangles emanated from the planned disposal of the Cape Grace, a five star hotel property in South Africa, by Moxon.
Chanakira is said to have tried to stop the sale of the Cape Grace and has raised allegations of exchange control violations against Moxon.
The Financial Gazette can reveal that officers from the Reserve Bank of Zimbabwe visited Mox-on's offices last week and took documents related to the transactions referred to by Chanakira in an affidavit filed with the Criminal Investi-gations Department Serious Fraud Squad the previous week.
Should Moxon proceed with the EGM, the axe is also likely to fall on Chidembo and Jokonya who would be replaced by foreign directors with strong links to the KMAL chairman. They include Marilyn Jean Hugill, Moxon's sister, Ashvin Mancha, Jack Mitchell, Fiona Patricia Silcock and Dennis Stein.
Timba said it is in the best interest of minority shareholders that the EGM be subjected to an independent chairman and independent scrutineers such as auditors.
He said Muchadeyi Masunda, appointed interim chairman of the EGM, was not fit to chair the meeting because of his long standing relationship with Meikles Africa Limited.
"I aver as such that it is reasonable to assume that he (Masunda) is unlikely to be an independent chairman since he has a long association with the First respondent as such it is unclear whether he was nominated as chairman by them or the majority of the board. For this reason, I believe that shareholders must be given full information on this saga including matters relating to his appointment," said Timba.
He said KMAL should provide shareholders with documents relating to the merger, minutes of board meetings relating to the dispute over the removal of the directors, any correspondence with the RBZ in respect of the proposed removal of directors and the proposed new appointees, and any correspondence exchanged between the respondents and any of the directors affected by the resolution.
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