28 July 2017

Zimbabwe: Share Price Row Rocks Cfi Group

The sale of a parcel of CFI Holdings shares valued at US$1,5 million to British business tycoon Nicholas Van Hoogstraten last Thursday is now caught in controversy amid allegations the trade was between investment companies owned by the colourful British tycoon.

CFI is listed on the Zimbabwe Stock Exchange (ZSE). Its principal activities, through subsidiaries and joint ventures, include letting of properties; production and sale of fresh produce; wholesaling and retailing of consumer goods; manufacture of stock feeds; provision of animal health requisites; operation of maize and wheat mills; poultry breeding, production, processing and selling, and development and management of real estate.

The company's portfolios include retail, specialised and poultry. The retail division includes Farm & City and Vetco Animal Health. There is also Victoria Foods, Saturday Retreat Estate, Reston Developers and Maitlands Zimbabwe Limited, as well as Agrifoods, Agrimix, Hubbard Zimbabwe, Glenara Estates, Crest Breeders International and Suncrest Chickens. It also controls Glenara Estates involved in crops; commercial maize, maize seed, wheat, peas and sorghum.

A parcel of 4,9 million CFI shares exchanged hands at 31,05 US cents.

Zimre Holdings (ZHL) majority shareholder Hamish Rudland this week accused van Hoogstraten of manipulating the CFI stock in order to derail an offer to minorities by Stalap investments, the reinsurance group's investment vehicle.

"Van Hoogstraten is selling shares between his different vehicles to manipulate the share price. He has no intention of purchasing shares from the public. He is only manipulating the price to undermine the offer to minorities," Rudland said.

"This is undermining the integrity of the exchange and the Securities Commission of Zimbabwe (Secz) need to get a grip. He makes wreck less statements about the market and the company that have no underlying facts."

Rudland said companies that Van Hoogstraten is invested in are broke and not going anywhere, adding the controversial businessman was now playing games in the Zimbabwe economy at the expense of citizens and the fiscus.

"On many occasions he quotes 'this is a game for me I don't need the money I like coming down here to disrupt things and expose frauds'. Is this the type of investor we want in Zim, a person who wants to 'play games' at the expense of Zimbabwe and the economy. Employees in CFI are owed US$9 million. His games are affecting people's lives and futures," Rudland said.

"At Hwange people haven't been paid and are in arears, huge creditors screaming for payments at RTG huge creditors, no capital unhappy management with no confidence to do there jobs because nick is 'playing games'."

Rudland added that Van Hoogstraten's promises of capital and loans to several companies had never materialised.

"When asked to bring money the goal posts change," he said.

CFI shares in last Monday's trade gained 20% to close at 21 US cents from 18 US cents in a deal valued at only US$11.

Another transaction last week involved the sale of 400 shares with a value of US$101.

On Thursday, a total 4,9 million CFI shares worth around US$1,5 million were snapped up at a price of 31,05 US cents.

ZHL, through its investment vehicle, Stalap Investments offered to buy out minorities at 22 US cents. At last Wednesday's trading price of 16,8 US cents, the offer presented a premium of 76%.

At a price of 37,25 US cents on Wednesday with a market capitalisation of US$39 million against a book value of US$36 million.

The ZSE has asked Sec to look into the transaction involving Van Hoogstraten.

Van Hoogstraten said then he was not involved in trades of 50 and 400 shares of last week respectively.

"The very minor 'trades' on Monday and Wednesday were due to market manipulation by brokers acting not for Messina but for Nssa/Rudlands and the crazy ZSE "automated" system," he said.

"However, our associated companies (not Messina) did buy the 4 970 000 shares that traded yesterday (Thursday) at 31,05 US cents."

He said his company, Messina Investments, would soon send its own offer to buy shares in order to counter the "Mickey Mouse" from Stalap, adding his rival's offer had been overtaken by events in the stock market.

In an interview yesterday, Van Hoogstraten said: "I told you, last week, that Messina had not bought any shares on Thursday.

"I believe that most of the big parcel that traded were bought by Willoughby's Investments or Willoughby's Consolidated, but I do not know exactly as my son deals with such matters and as he is travelling I cannot ask him yet. Willoughby's was formally part of the Lonrho (Tiny Rowland) group that I took over in 1997 and is 'unrelated' to Messina.

"I am reliably told by the brokers that this parcel was an amalgamation from a number of different sellers who had not been able to trade during the previous week due to the crazy 'automated' system to which I previously referred."

He said the sellers were obviously "not interested in accepting the 22 US cents so-called 'offer' from Stalap -- who, with a brain, would?"

He said: "There is no way that we would be selling and buying our own shares' so the 'allegations' to which you refer are a nonsense and come, I presume, from the rants of Robin or Hamish -- strange bedfellows -- like Adolf Hitler and Joseph Stalin at the beginning of World War II in 1939!"

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