14 November 2012

Zimbabwe: Chingwena Swoops On Doves Holdings

Business mogul, Moses Chingwena, has acquired Doves Holdings, from controversial businessman, Munyaradzi Kereke, as the country's oldest funeral services group sought outside capital to withstand intensifying competition.

The Financial Gazette's Companies & Markets can report that the sell off by Kereke is part of a recapitalisation drive by Doves, whose funeral business has suffered significant loss of market share as well as its dominance in the funeral services business.

An operations report on the sector by the Insurance and Pensions Commission (Ipec) indicated early this year that Doves was now trailing Nyaradzo Funeral Services which had become by far the single largest funeral assurer on the market by earnings.

In fact, Doves, which might still be the most known funeral assurance brand in the country, was fifth in terms of gross written premium and net premium income, trailing once-smaller players like Nya-radzo, Moonlight, Cell and First Funeral, according to Ipec's operation report for the half year to June 30, 2011, the first such report for the funeral assurance industry meant to aid offsite supervision of players.

Sources said Chingwena had concluded the transaction a few weeks ago, although the transfer of ownership became effective on November 1, 2012.

The move is expected to result in wholesale changes in senior management, with sources suggesting that the incumbent chief executive officer (CEO), Chabvemhiri Shaka, was earmarked for replacement by Phibeon Zimuto, who had already been deployed to the Doves group to facilitate smooth hand-over and take-over.

Another executive identified as Clario Chauraya had also been deployed to take-over the finance department. The group currently has no finance director.

It was not immediately clear which investment vehicle Chin-gwena had used to acquire Doves shareholding, but speculation within the industry suggested that the prominent car dealer could have made the acquisition through Croco Holdings Limited, whose main unit is Croco Motors.

The Croco CEO, Farai Matsika, is said to have already been put on the Doves Holdings board, together with Zimuto.

In a memorandum to Doves employees and departmental heads dated November 1, 2012, Shaka said the Doves Holdings board had appointed a business development committee chaired by Matsika "and assisted by Phibeon Busa Ngabanye." Ngabanye is the other name for Zimuto.

"This development is a result of the initiative to recapitalise the group," said Shaka, indicating that both appointments were with effect from November 1, 2012.

Shaka did not indicate how these two had become members of the development committee when they were not company executives.

When C&M contacted Shaka on October 30, 2012 for a comment, he flatly denied any take-over.

In a letter sent to this reporter the next day, he retorted: "I write to set the record straight with reference to your phone call to me on 30 October 2012 at around 1:15 pm. For the record, please note that it is entirely false that Doves has sold to Croco Motors.

"There have never been any talks or any negotiations of any sort with Croco Motors."

Matsika had also told C&M that any suggestion that Chingwena had taken over Doves was untrue, saying, however, that Croco Motors and Doves were currently in discussion to buy a significant fleet of hearse vehicles for the group.

Chingwena, who had been away on a global Land Rover dealer programme in Morocco, was not answering calls this week. Chingwena runs the Jaguar and Land Rover dealership in Zimbabwe through Premier Auto Services.

Zimuto, who is earmarked to head Doves, quickly asked to return this reporter's call when contacted on Tuesday.

He later requested questions in writing. Zimuto has occupied the CEO's executive wing and is sharing the CEO's work, a source said.

Doves Holdings restructured into a group following its takeover by economist, Newton Madzika in 2000, from the Hammer-Nel family which had owned the business for nearly a century.

Madzika later sold the business to Kereke, then a former advisor to the Reserve Bank of Zimbabwe governor, Gideon Gono.

Doves Holdings comprises six strategic business units specialising in the provision of funeral services and funeral assurance products.

The group also has coffin and casket manufacturing units.

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