They are concerned that key business and corporate governance matters have not been satisfactorily explained and told The Zimbabwean that this non-disclosure could sink confidence in Meikles and bash the already beleaguered share price. The market perception is that Moxon acts with impunity, unilaterally and disregards the rights and interests of stakeholders. The Zimbabwe Stock Exchange lifted its suspension on Monday.
When contacted for comment, Moxon said he was in bad health and was recuperating outside the country. Initially, he pleaded for “mutual disclosures” regarding the source of information about the goings-on at Meikles.
He then referred questions to company secretary Thabani Mpofu, who declined to respond, accusing Bulawayo-based MP Eddie Cross (with whom Moxon has clashed in the past) of planting the questions. The Zimbabwean had no prior communication with Cross about this issue.
Shareholders say public statements made over the years have generated numerous fundamental questions regarding the group’s accountability and transparency. They plan to confront Moxon, who became executive chairman in 2011.
ZSE is investigating a report of Meikles having inflated the debt it is owed by the Reserve Bank of Zimbabwe, which started accruing from 1998 when the central bank used more than $20m from its offshore account.
Moxon insisted that RBZ owed Meikles around $90m but some, including former central bank advisor Munyaradzi Kereke, argue the figure is around $45 million.
Some shareholders want Moxon replaced with an independent chair and a new functional board free from a history of bad business decisions and eroded shareholder value that they say has compounded years of alleged mismanagement and shady deals.
They want the chairman to explain an array of other issues relating to the governance of Meikles, chief among them the status of offshore companies associated with the group and him as the major shareholder.
They want to know what has become of the $11.7m that a British Virgin Islands (BVI) registered shareholder company called Gondor Capital owes Meikles from 2008 but which accrues before that date and represents funds due from another of Moxon’s companies, Coolbay.
Gondor assumed the liability and is purportedly holding the funds for Meikles’s regional expansion. Shareholders expect that the mysterious funds should have accrued a return or been returned to Zimbabwe. Gondor is purportedly holding the funds for business expansion and the shareholders insist the money should have grown through interest and that it must be explained what yield the subsidiary is paying for the use of the funds.
BVI is a tax haven that many companies across the world use to stash away capital, sometimes in transactions that have been discovered to be against the laws of the countries where the money originated.
Gondor, which was registered in the BVI on March 29, 2011 was supposed to generate some $200m that would be used to grow business in Zimbabwe but no such proceeds have accrued to date.
In 2011, a Meikles statement described the investment in Gondor as “a decisive move by the major shareholders to mobilise upwards of $200 million for investment in Meikles and Zimbabwe and augurs well for the future growth of the company and its subsidiaries”.
The failure to mobilise the money, stockholders said, could be in violation of RBZ terms of approval of the transaction. The Moxon-led board has not explained how Gondor has progressed with mobilising the promised $200 million. Instead Gondor owes Meikles $11.7 million.
Shareholders are also seeking clarity on the composition of the board of directors and allege that members have not been rotated every three years as required by ZSE and Meikles regulations. They also complained that there was no clarity concerning another investment shell company, Mentor Africa Limited.
Moxon dismissed as “irresponsible reference” accusations of lack of good corporate governance. “I am focusing on health issues. To me these are more important than interaction with an elements (sic) of the press in Zimbabwe at present,” he wrote by email.
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