Empowerment Corporation controlling shareholder Dr James Makamba has refuted claims he illegally transferred certain members’ empowerment shares into his name. The Indigenous Business Women Organisation and Dr Jane Mutasa, through Selpon Investments, recently filed papers at the High Court seeking nullification of 72,1 percent of Dr Makamba’s EC shares he allegedly unlawfully transferred into his name. EC is a 40 percent shareholder in Telecel Zimbabwe and its shareholding composition was supposed to be made up of a number of indigenous empowerment groups.
Telecel International holds the balance of 60 percent in Telecel Zimbabwe. Dr Mutasa and Selpon Investments, her investment vehicle and shareholder in EC, alleged that Dr Makamba transferred into his name shares that members had failed to pay for. Further, Dr Mutasa also alleged that 30 percent of EC shares that were supposed to be distributed among designated groups on subscription were also transferred to Dr Makamba. Dr Mutasa, listed in court papers as the first and second plaintiffs with her investment firm Selpon, said Dr Makamba used his legal advisors, Carlton Consultants, to transfer the shares.
This was allegedly without the consent of other members. But Dr Makamba has refuted the claims saying “if people failed to pay for shares, what grounds are the same shareholders claiming stake (in Empowerment Corporation”. The exiled businessman said that they were clearly laid-down procedures on how the shares that targeted beneficiary members failed to acquire would be dealt with. “The plaintiff is alleging breach of procedure; have they offered to pay for the said shares or the shelved shares. There were many meetings held, with minutes available, where the same issues were raised, yet no money was offered,” he said.The busi nessman said Carlton Consultants sought authority on shares that are not allocated and not paid for.
“They are rejected shares that can only allow other shareholders to exercise their right to save the company, particularly if money is required.” “The complaints absconded from their duties as shareholders (of EC) and now want to ride on the back of shareholders that bailed out the company. They may plead for help and sympathy that they failed to take up their stake,” Dr Makamba said. Dr Makamba said Telecel Zimbabwe was issued with a mobile phone operator’s licence after the issues regarding the shareholding structure in EC had been resolved.
The company now exists on the backdrop of the money put (in) by some shareholders and the value has now been created. The licence was issued after discussions, which appears that the company issues were resolved,” said Dr Makamba. He added that “at law, unsubscribed shares do not exist”. “It is important that if people are clamouring for value of the shares, they must be sign acknowledgement of debt on the losses that have accrued to the company,” he said. He also queried why it has taken so long for the complainants to bring the issue up, claiming some of the aggrieved parties had issues with Telecel they wanted dropped.
“To an ordinary person, they may be driven by malice. These directors had an opportunity to run the company or present their issues to the board,” said Dr Makamba. “If these shares were not subscribed, who owns them, who developed the value of the shares? Why were the complainants not in a position to pay for the shares,” he asked. Dr Mutasa alleged that IBWO was supposed to get 9 percent, but managed to pay for 0,3 percent. Selpon was set to get the balance of 8,7, but only got 2,9 percent. Dr Mutasa alleged that the balance of 5,8 percent stake was illegally transferred to Dr Makamba investment vehicle, Kestrel Corporation without the consent of other members.
The plaintiffs alleged that National Miners Association were supposed to get 9 percent stake, but only managed to pay for 0,7 percent of EC’s allocated 40 percent stake. The balance was “unlawfully” transferred to Kestrel Corporation with other members not getting the opportunity to buy the shares, which Dr Makamba has denied. 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 his investment vehicle Kestrel’s Corporation.
The same fate allegedly befell the 10 percent that was supposed to go to Integrated Engineering Group and the 9 percent meant for Magamba Echimurenga. Businessman Dr Phillip Chiyangwa purchased 9 percent from EC, but later sold to the same entity. It is alleged that Dr Makamba took it upon himself without any resolution to distribute these shares on a prorata basis instead of sharing them equally. Apart from nullification of Dr Mkamba and Kestrel’s stake in EC, IBWO and Selpon want Carlton empowered to authorize reversal of the alleged illegal transfer of the shares. IBWO and Kestrel alleged Dr Makamba held the shares illegally. They also want Carlton Consultants be empowered and authorised to distribute the shares to fully paid up members of Empowerment Corporation, equally and not on prorata basis.