Makamba in share wrangle
Empowerment Corporation, which owns 40 percent shareholding in Telecel Zimbabwe, is contesting the transfer of shares to Dr Makamba

Empowerment Corporation, which owns 40 percent shareholding in Telecel Zimbabwe, is contesting the transfer of shares to Dr Makamba

Martin Kadzere and Golden Sibanda
Empowerment Corporation shareholders have approached the High Court seeking nullification of the transfer of 71,2 percent of EC’s shareholding in Telecel Zimbabwe to fellow shareholder Dr James Makamba.

Indigenous Business Women Organisation and Selpon Investments have filed High Court papers for the reversal of the alleged illegal transfer of the shares to Dr Makamba and his investment vehicle, Kestrel Corporation. EC is the second largest shareholder in Telecel, the country’s second largest mobile phone company, with a 40 percent stake. Telecel International holds 60 percent.

Selpon and IBWO cited irregularities in the manner in which shares initially meant for some empowerment groups were fraudulently transferred to Dr Makamba and Kestrel after the beneficiaries failed to raise the required funds.

Carlton Consultants, a firm of chartered secretaries which also happened to be Dr Makamba and Kestrel’s legal advisors, were retained by Dr Makamba as EC secretaries without agreement of other members in the group. Carlton Consultants is said to have been used for the alleged unlawful transfer of the shares.

As such, Carlton Consultants was cited as fourth defendant with Dr Makamba, Kestrel and EC listed as first, second and third defendants, respectively.

Apart from nullification of 72,1 percent of Dr Mkamba and Kestrel’s shareholding in EC, IBWO and Selpon want Carlton Consultants to be empowered to authorise reversal of the alleged illegal transfer of the shares.

Further, the two also “prayed” that Carlton Consultants be empowered and authorised to distribute 72,1 percent of the shares to fully paid up members of Empowerment Corporation, equally and not on a pro rata basis.

The plaintiffs alleged that National Miners Association were supposed to get a 9 percent stake, but only managed to pay for 0,7 percent of EC’s allocated 40 percent stake in Telecel. The balance was “unlawfully” transferred to Kestrel with other members not getting the opportunity to buy.

The Zimbabwe Farmers’ Union was also allegedly meant to receive 9 percent shareholding in EC, but after failing to pay for the stake, the shares were again illegally transferred into Dr Makamba and Kestrel’s names.

The same happened to the 10 percent that was supposed to go to Integrated Engineering Group and the 9 percent meant for Magamba Echimurenga.

Businessman Mr Phillip Chiyangwa purchased 9 percent from the Empowerment Corporation, but later sold the shares to the same entity. It is alleged that Dr Makamba took it upon himself without any resolution to distribute these shares on a pro rata basis instead of sharing them among members equally.

“Notwithstanding all these shares, which were unlawfully transferred or allotted on a pro-rata basis instead of being shared among the prescribed members, there was 30 percent of shares, which were warehoused and under normal circumstances were supposed to be shared equally to fully subscribed members (of EC),” said IBWO and Selpon.

“However, the first defendant (Dr Makamba), through unknown secretaries unlawfully and with intent to steal from other fully subscribed members, transferred these shares into the names of second defendant (Kestrel), much to the prejudice of (IBWO and Selpon).”

The plaintiffs said attempts to resolve the irregularities were unsuccessful as Dr Makamba allegedly only kept promising to look into the issue.

“It is contended by first (Dr Mutasa) and second plaintiffs that the continued possession of these shares by the first and second defendants has become unlawful to the extent that the first and second defendants should stop holding out to the world at large that they are themselves Empowerment Corporation and that they hold the majority shares in Empowerment Corporation, yet those shares were unlawfully obtained.”

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