24 May 2018

Zimbabwe: Battle for Telecel Control Intensifies

Telecel and Empowerment Corporation (EC) shareholder Gerald Mlotshwa has called for the reconvening of last year's inconclusive extraordinary general meeting (EGM) to adopt the resignation of EC chairman James Makamba, as the fight over Telecel shareholding escalates.

Sources told the Zimbabwe Independent this week that the meeting being called for by Mlotshwa is the resumption of an EGM held by Telecel in August last year, which had not adopted all the resolutions, including the resignation of Makamba.

"In August 2017, an EGM was called by James Makamba and attended by Jane Mutasa, representing Empowerment Corporation, as well as Vengai Madzima, who was also standing in for Mlotshwa of Empowerment Corporation," a source revealed.

"The EGM, after passing one resolution, adjourned indefinitely to allow government to appoint its own director to the Telecel board. The idea was that, once the directors were appointed, the EGM would resume.

"The EGM is now resuming. Its main intention will be note the resignation of Makamba from the Telecel board as a director and chairman.

The other is to note the sale of Kestrel Corporation shares to (George) Manyere and Mlotshwa in accordance with the minutes of 9th February, 2017 and agreements signed thereafter.

The EGM will be reconvened in accordance with the Companies Act."

Makamba, sources revealed, had signed his resignation letter in the presence of his South African lawyers.

This comes after Makamba wrote a letter earlier this month purporting to boot Mlotshwa out of the board.

In a letter seen by the Independent, dated May 16, 2018, written by Telecel board chairperson Makamba and addressed to the Telecel Zimbabwe chief executive, the company secretary and the directors, Mlotshwa is forbidden from taking any other role at Telecel Zimbabwe.

A senior EC director said Makamba was now backtracking on a recent agreement to resolve the issue.

"There was a meeting two weeks ago at the lawyers' offices and it was agreed that the Telecel transactions should proceed and Makamba must exit completely," an EC director said.

"We all met with his lawyers at our offices and agreed on how to move forward; there is evidence to all this.

Four days after that meeting, Makamba surprisingly tried to fire Mlotshwa.

So that is why Mlotshwa has now called for a reconvening of the adjourned extraordinary general meeting of shareholders of Telecel Zimbabwe (Empowerment Corporation and Telecel International) to note Makamba's resignation as chairman and director at Telecel Zimbabwe, and the sale of Kestrel shares to Ecsponent Zimbabwe (Pvt) Ltd; the EGM of August 2017 suspended the passing of some of the resolutions until government, which now holds 60% of the company's equity, had appointed its directors.

"It has now done this, so we are moving ahead with the EGM. Makamba ceased to be Empowerment Corporation director the day the two agreements of sale were signed in February and May last year.

This is all documented and contained in the minutes."

Mlotshwa last year emerged a significant Telecel shareholder after he secured Makamba's 40% shareholding following reports the controversial tycoon had sold his stake in EC to a local consortium that included Mlotshwa and businessman George Manyere.

Manyere later exited the deal, leaving Mlotshwa with the contested shareholding.

Makamba, together with women's empowerment lobbyist Jane Mutasa, owned the majority shareholding in the EC-held shares through Kestrel Corporation.

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