No end to Zim madness?

giles_musekwaWhy did an MDC minister agree to "seizure" of one of the largest local companies? (pictured: Giles Musekwa)


International observers will be forgiven for thinking that nothing has changed in Zimbabwe after the state seized control of one of the country’s largest companies, Kingdom Meikles. Kingdom Meikles is listed in Harare and London.

The company was “specified” last Friday, which means it has been placed under state administration on suspicion of criminal activity.

What is of concern is that an MDC minister signed the specification, raising questions of whether the party is truly committed to reform.

Kingdom Meikles used to be the largest listed local company on the Zimbabwe Stock Exchange. But its share price performance has lagged as shareholders are involved in a bitter struggle to remove the CEO Nigel Chanakira, who they claim is a Zanu PF proxy. The group made an operating profit of $10m (about R75m) in 2008.

Earlier this year shareholders, including the Meikles family, Old Mutual and Econet Wireless, voted at an extraordinary general meeting (EGM) to demerge the company and boot Chanakira and two non-executive directors from the board. However, Chanakira refused to go.

Shareholders have now called another EGM – to be held on September 24 – where they aim to try once more to remove Chanakira from the board.

Former Meikles chairman, John Moxon, says that immediately after notice of the first EGM was sent out, Chanakira “organised the state mechanism”. He says he and his family were harassed and falsely accused of externalising money. “I had to get out of the country,” he notes.

Moxon says that management met with co-minister of Home Affairs, Giles Musekwa, who is an MDC member. Musekwa, together with his Zanu PF Home Affairs counterpart, Kembo Mohadi, authorised the seizure of Kingdom Meikles. According to Moxon, when the import of the seizure order was explained to Musekwa, he admitted to “making a mistake”.

Moxon fears that if the seizure order is not reversed, and shareholders are not allowed to boot the three directors, as is their wish, the company will be run for the agenda of Zanu PF at the expense of its shareholders.

Moneyweb

Post published in: Economy

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