10 May 2018

Zimbabwe: British Tycoon Undermining Hwange Colliery Revival - Board Claims

Photo: The Financial Gazette
Hwange Colliery.

Controversial British investor Nicholas Van Hoogstraten is undermining the revival of debt-burdened Hwange Colliery company, a board member told parliament this week.

The tycoon is the second largest shareholder in the struggling company with a 26 percent interested while government holds the controlling stake of 42 percent.

The company is in the hunt for capital with management even proposing the sale of Hwange town to help deal with debts of up to $300m.

Board member Ntombizodwa Masuku recently told Parliament that Hoogstraten was proving to be a stumbling block in efforts to revive the coal miner.

She was appearing before members of the Mines and Energy Parliamentary Portfolio Committee.

"We continue to engage with second major shareholder," said Masuku.

"We have highlighted to him the challenges the company is facing, and we have made our recommendations as to the way forward.

"And let me say the last meeting we had with him, he seems to be forthcoming and he is eager to listen, and we hope it will take us to another level.

"We have not lost at hope and we hope he will continue to see the positive side."

Legislators were concerned that government continues to burden the tax payers when bailing the company out when other shareholders were refusing to inject money into the firm.

Responding, Masuku said; "We recommend that they (shareholders) exercise their right and inject money into the company and, if the other shareholders do not come forth, it means that their shares will be diluted."

Van Hoogstraten, while renowned for his business empire, has a shady past.

In 1968 he was convicted by a British court and sent to prison for paying a gang to attack a business associate while in 2002 he was sentenced to 10 years for the manslaughter of a business rival.

The verdict was overturned on appeal and he was subsequently released, but in 2005 he was ordered to pay the victim's family £6 million (about R102 million) in a civil case.

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