The Court of Appeal has dismissed an application filed by the former management of Tanzania's National Investment Company Limited (NICOL) to nullify a meeting held by the company's shareholders installing new management and board.
According to the court ruling, the application was dismissed recently when the Court of Appeal upheld a High Court judgment allowing shareholders to go ahead with the meeting.The High Court Commercial Division had granted permission to four petitioners, who are NICOL shareholders, to hold an extra ordinary shareholders' meeting and install a new management including a board.
The application No. 4, 2012, was filed and dated on April 13, 2012 before Justice Agnes Bukuku leading the court to draw an order permitting the shareholders to hold the meeting.
The installation of the new management and the board comes after the former management failed to honour several directives by the Capital Markets and Securities Authority (CMSA) for the company (NICOL) to operate efficiently and in compliance with the law.
The court records indicate that CMSA suspended the former management led by Mr Felix Mosha as the Chairman of the board and Kate Armstrong, Chief Executive Officer (CEO) over various issues.
Among other things, CMSA directed NICOL to engage a fund manager, put in place an effective Investment Committee and Investment Policy and Procedures Manual and improve corporate governance.
Other measures were to take action against directors, who were involved in allegedly approving questionable investments, submit audited and interim financial statements for the year and a half ended December 30, 2009 and June 2010.
CMSA had also asked NICOL to submit reports including fund managers' comments on investment and Investment Committee's recommendations on various investment decisions.
However, NICOL according to Court documents by CMSA, refused to implement the directives, violating corporate governance principles that required the board to put in place a system to eliminate conflict of interests.
After the management failed to institute the directives, the shareholders led by Public Services Pension Fund (PSPF), Parastatal Pension Fund (PPF), Local Authorities Pension Fund (LAPF) and Government Employees Provident Fund (GEPF) filed applications to the High Court Commercial Division, asking the court to give an order that would enable the shareholders hold a meeting to appoint an interim NICOL management to restructure the company under the CMSA regulations.
The shareholders also filed another application, case No. 46 of 2011 asking the High Court Labour Division to block the 65m/- payments from NICOL's bank account to former employees of Tanzania Fisheries Development Company (TFDL)
According to the sources, the payments were allegedly approved by the former NICOL management who purchased the company (TFDL) which was under insolvency.
Efforts to contact CMSA Director of Legal Services Ms Fatma Simba proved futile as her mobile number was switched off. Asked for a comment, the newly elected NICOL Interim Manager Mr Kinon Adam Wamza, said he was not in a position to comment.
Established in 2001 with the aim of becoming an investment forum for indigenous Tanzanians, NICOL has over 40,000 shareholders both ordinary and public institutions such as pension funds and religious organizations.