Zimbabwe: Mugabe Nephew's Telecel Zimbabwe Bid Challenged

Mergers, Acquisitions and Financial Results

President Robert Mugabe's nephew Patrick Zhuwawo's bid to take charge of the country's third biggest mobile network Telecel Zimbabwe was challenged in the High Court on Tuesday.

Zhuwawo recently published a notice in the media calling an extraordinary general meeting of the Telecel shareholder, the Empowerment Corporation, to endorse the disposal of the group's entire 40 % interest in the telecoms firm to private equity investor Brainworks Capital Management.

Beleaguered Harare businesswoman Jane Mutasa filed an urgent chamber application praying for an interdict to stop an extraordinary general meeting set for February 20 at which Zhuwawo wants to emerge as Telecel's chief executive officer.

Mutasa, in her application, cited Zhuwawo, Carlton Consultants Private Ltd, James Makamba, Kestrel Cooperation and Zimbabwe Miners Association, Empowerment Cooperation, Brainworks Capital Management Private Ltd and George Manyere as respondents and wants the High Court to stop the disposal of 40 percent of Telecel Zimbabwe shares.

In papers deposited with the court, Mutasa, Indigenous Business Women's Organisation (IBWO), Selpon Investments and Magamba eChimurenga who are the applicants argue that disposing of the 40 percent shares without their knowledge or consent will be illegal.

"As shareholders in Empowerment Corporation, the applicants have a prima facie right to participate in each and every activity and they also have the right to sue Makamba, Kestrel Cooperation and 6th respondent (Empowerment Corporation) for return of their shares inclusive of a right to hold fully paid up shares in Telecel Zimbabwe.

"That right is to be encroached upon the acts of the respondents who have proceeded through unrecognized persons acting without authority to enter into a share purchase agreement as at the 25th of January 2015 purportedly disposing of a 40 percent of the issued and outstanding shares of Telecel Zimbabwe for the cash consideration of US$0.25 per share," averred Mutasa.

Mutasa accuses Zhuwawo and Carlton Consultants of putting an advert in in a local daily calling for an extraordinary meeting to discuss the disposal of 40 percent of Telecel Zimbabwe shares without her consent or knowledge.

"This advert has been placed notwithstanding the fact that the said 40 percent of all issued and paid up shares in Telecel Zimbabwe includes also the shares held by IBWO, Selpon and Magamba eChimurenga who never consented to sale of such shares, neither were they part of any meeting appointing Zhuwawo to be the chief executive officer," she argued.

It is Mutasa's prayer that the High Court issues an order to stop the impending extraordinary meeting.

"The said meeting is due to be held on the 20th of February 2015 at 1200hrs at Crowne Plaza Monomotapa Hotel, Harare and the respondents have refused to cancel the meeting on 48 hrs notice given to them by the applicants, clearly demonstrating that the respondents are determined to carry out this unlawful act.

"Further, having been called upon to cancel the meeting on the 26th of January 2015, the respondents proceeded unabated to cause to be published (in the media) a copy of notice of extraordinary general meeting, clearly demonstrating their determination to go ahead with the extraordinary meeting. I submit that this honourable court to stop the respondents' unlawful acts," Mutasa submitted.

Charles Chinyama is representing Mutasa and the other applicants, which comes at a time when another share wrangle is pending at the High Court over the ownership of the company.

Source: New Zimbabwe.com 10 February 2015