Mergers, Acquisitions and Financial Results

Mystery surrounds the sale of the Zimbabwe National Liberation War Veterans' Association's shares in Telecel Zimbabwe's second largest shareholder, the Empowerment Corporation, with several legitimate members in the dark over the disposal of the stake.

The Empowerment Corporation, a local consortium, has a 40 percent stake in the Zimbabwe's third largest cellular company. Telecel International holds the remainder.

Sources this week indicated that the shares were sold without their knowledge and they would launch investigations to establish the identity of whoever authorised the sale. It is understood that the transaction was done above board, effectively distancing the Empowerment Corporation from any wrongdoing.

Only that it was done outside the knowledge of other rightful members within the association, however. The shares that the association used to have in the group could not be ascertained.

The association's name was even struck off from the records of the Registrar of Companies. Only four groups now constitute the Empowerment Corporation and are listed in the records of the Registrar of Companies. These are Kestrel Corporation, Seplon (Pvt) Limited, the National Miners' Association and the Indigenous Business Women Organisation.

It is understood that some members of the group could have benefited from the "clandestine transaction" at the expense of others who are now keen to come to the reality of what transpired. "It is not a secret that we used to have some shares and we all know that they were disposed of," a source within the association said. No comment could be obtained from the Empowerment Corporation by the time of going to print.

Telecel Zimbabwe has been given up to June 30 this year to restructure its shareholding in compliance with the country's telecommunication regulations which stipulate that a foreign company - in this case, Telecel International -- can have a maximum of 49 percent equity in a local mobile phone firm. This effectively means Telecel International has to dispose of 11 percent of its stock. Empowerment Corporation, as the holder of the preemptive rights, is expected to up its stake to 51 percent before the deadline. And no outsider can purchase the shares at stake unless the consortium fails to raise money required to finance the acquisition of the stock.

The Herald