Nigel Chanikira underfire for helping Zanu PF acquire Moxon’s assets

Nigel Chanikira
HARARE - Zimbabwean businessman Nigel Chanikira is underfire from fellow shareholders for taking a conniving role in fast tracking the specification of John Moxon the Kingdom Meikles Africa Limited (KMAL) chairman on trumped up cor

The plan involved, amongst the main actors, outgoing acting Finance Minister Patrick Chinamasa, who was also acting Justice Minister, the Central Bank Governor Gideon Gono and businessman Nigel Chanikira who is a close relative of Zanu PF politburo member former Finance Minister Hebert Murerwa, and some Zanu PF proxy KMAL directors on board.

Zanu PF seeks to control Zimbabwe’s biggest business conglomerate Kingdom Meikles Africa Limited (KMAL) to finance the rescusitation of its fading fortunes.

According to a lobby group operating under the auspices of Concerned Shareholders, KMAL chief executive Nigel Chanakira and his board could soon be invited to a public meeting to substantiate claims against the Moxon family that currently holds a 42,9% stake in the conglomerate.

The lobby group, sources said, would also seek KMAL's position on Moxon's specification order.

This action follows last week's release of a cautionary statement by the company revealing government's decision to impose a specification order specifically on Moxon and excluding his siblings and business entities linked to the family.

This, the group said, was contrary to what was published in the Government Gazette.

We are calling a public meeting which Nigel Chanakira as CEO and the board of directors to explain their accusations against Moxon in full as the recent cautionary statement does nothing to clarify the dispute, said a member of the lobby group who requested anonymity.

He also questioned government's erroneous decision to specify TM supermarkets — a retail division of KMAL group — arguing this suggested how government lacked understanding of the saga that emerged after a planned move to dispose of a South African hotel.

The 63-year-old Maxon has challenged claims made in the cautionary statement amid growing public concerns from other investors fighting in his corner. Moxon also claimed that his rival minority shareholders snubbed his attempts to settle the wrangle, which emerged late last year.

In a letter written to the Complaints Commission (Trading Services) of the London Stock Exchange last Sunday, Moxon expressed strong suspicion that his specification was part of a scheme by minority shareholders or persons acting in support of Chanakira and Econet Wireless to effect a de facto takeover in the event that an urgent extra-ordinary meeting is called.

On several occasions I made serious and sincere attempts to negotiate a solution to this dispute to avoid the negative consequences of irretrievable adversity. Regrettably these appeals for mediation and arbitration were rebuffed by the parties in opposition to the position I was promoting, Moxon claimed.

Lawyers representing Mentor Holdings — which the cautionary statement said were implicated in the movement of the US$22,1 million deal — were quoted in a South African weekly disputing the location of the funds which KMAL claims were deposited to Coolbay Investment, a company linked to Moxon.

They are laying claim to money sitting in Werkmans (Attorneys) trust account, and we firmly believe their (KMAL) claim is without merit, said lawyer David Hertz cited in the Sunday Times.

Under the Prevention of Corruption Act which carries specification orders, specified persons are among other things barred to perform any act as an agent of the company or partnership that is also a specified person or otherwise than in accordance with any conditions imposed by the investigator.

The law also prohibits Moxon from operating a bank, building society or financial institution account. 

Sources close to Moxon yesterday said the specified former KMAL chairman would return to Zimbabwe to prove his innocence once the government order was revoked.

The KMAL saga emerged after Moxon was allegedly embroiled in a legal wrangle over South Africa's five-star Cape Grace Hotel.

Meanwhile, a growing chorus of stakeholders against the specification order is now pushing for the lifting of the order and a halt to any action that could alter the current shareholding structure.

Yesterday a lobby group identified as Save KMAL issued a press release calling for the blocking of any EGM that excludes Moxon.

Now therefore, we call that once all shareholders have legal capacity restored, the directors convene an EGM of the company to conclusively resolve this dispute in accordance with procedures set out in the Articles Association and the provisions of the Companies Act, read the statement.

Efforts to get comment from Chanakira were in vain as his mobile phone was unreachable

The Meikles family, which owns 43% of KMAL, has been one of Zimbabwe’s most enduring brands, with its roots in the late 1890s when the Meikles brothers started a trading store in Zimbabwe, then Rhodesia.

The group has remained a family business at its core although it grew to become one of the country’s biggest, owning hotels, supermarkets and department stores across the country, and amongst the top high street brands are Harare’s Greatermans, HM Babour.

The subsidiaries that form part of the group are also deeply rooted in the country’s business history. The Tanganda Tea Company was formed in 1924 and produced its first commercial crop in 1930, while Cotton Printers was formed in 1950.

Kingdom is an altogether different beast. It was launched in 1995 by members of the new business elite supported by Zanu PF and quickly rose to prominence, challenging many longstanding competitors in the financial services world. In Zanu PF circles, its success is mainly credited to former Finance Minister Hebert Murerwa who used the banking expertise of his relative Nigel Chanakira as the frontman and the seed Capital was acquired from NSSA in addition to government Treasury Bills on favourable terms.

Kingdom consists of subsidiaries Kingdom Bank, Kingdom Stockbrokers, Kingdom Asset Management, MicroKing Finance and Discount Company of Zimbabwe. The company has the Moneygram franchise for Zimbabwe, which has been a winner considering remittances are now almost on a par with mining and tourism as a generator of gross domestic product. 

In a cautionary notice to shareholders KMAL said Moxon was specified on January 16, in terms of Section 6 of the Prevention of Corruption Act, Chapter 9:16. In terms of Section 10 1(e) of the Act, Moxon shall not perform any act as director of a company registered in Zimbabwe.

KMAL said it is instituting legal action against Coolbay Investments, Moxon, and Mentor Holdings and Stephen Levenberg and Brett Till for the recovery of funds deposited with Coolbay Investments and Mentor Holdings.

"The total amount being claimed in the two actions is US$22.1 million," KMAL said.

Last year KMAL shareholders- comprising 42.9 percent passed a vote of no confidence in group Chief Executive Officer (CEO) Nigel Chanakira and two other board members- Rugare Chidembo and Callisto Jokonya. The trio were supposed to be ejected from the board at the October 23 Extraordinary general meeting.

But the High Court ruled that the meeting was improper.

Had the EGM sailed through, Chanakira, Chidembo and Jokonya would have been removed from the board and new directors- all with links to Moxon, appointed. KMAL said Mentor Africa had purported to have exercised the call options it alleges it has in respect of "Kingdom Meikles Limited interest in Cape Grace Hotel".

"The company contests the validity of the purported exercise of this option. There is the possibility of litigation if Mentor Africa Limited contends its exercise of the call option is enforceable," it said.

Moxon and Chanakira clashed over the the proposed sale of Cape Grace Hotel to Mentor Holdings. Mentor is spearheading the international funding for KMAL.

Chanakira, Chidembo and Jokonya had objected to the disposal of the sale without a proper valuation of the hotel. Mentor had offered R200 million when a valuation done last in 2008 had put the five-star hotel at over R300 million.

KMAL would have 7 percent shareholding in Mentor, while Levenberg and Till would have a combined 22 percent shareholding. Levenberg and Till are former executives of Tokyo Sexwale’s Mvelaphanda group. –

Post published in: Economy

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