State steps into fight for control of Telecel Zimbabwe
The fight for control of Telecel Zimbabwe has escalated, with the government declaring "void" new board changes made at the country's third-largest mobile operator.
Lawyer Gerald Mlotshwa assumed the post of chairman this month, but was this week barred from participating in board or committee meetings.
Telecel Zimbabwe, which has 1.7 million active subscribers, has struggled to make a profit and lags behind rivals Econet Wireless Zimbabwe, which has about 11 million active subscribers, and NetOne, which has two million.
At its peak, Telecel Zimbabwe was the second-largest mobile operator in the country. The company is 60% owned by the government through Telecel International and is on a list of state-owned companies earmarked for privatisation.The government says bickering in the Empowerment Corporation, which holds a 40% stake in Telecel Zimbabwe, is "hurting the operational and recovery thrust" of the company.
At the heart of the rift is a battle between Mlotshwa, who is President Emmerson Mnangagwa's son-in-law, and businessman James Makamba, the co-founder of Telecel Zimbabwe. A deal in which Makamba allegedly agreed to step down and be paid $11-million for his shares appears to have hit the rocks.
Makamba returned home in December after 13 years in self-imposed exile in the UK and South Africa. Earlier this month the Sunday Times reported that his sprawling Johannesburg property could soon be confiscated by Absa to recover a $4.5-million debt owed by him.It is understood that the government's refusal to recognise Mlotshwa as chairman of Telecel Zimbabwe stems from a "cabinet mandate" to acquire the remainder of the company's shares for the state. This would enable the government to decide the $70-million company's future without the impediment of another shareholder.
According to correspondence seen by the Sunday Times, the mobile operator's CEO, Angeline Vere, has been instructed by government representatives not to take instructions from Mlotshwa or any other person without the authority of the board or Telecel International.
Mlotshwa said on Friday he was happy to proceed to arbitration over the latest dispute and that those seeking to block his appointment as chairman had "to come out in the open" as there was no cabinet mandate to take over full control of Telecel Zimbabwe.
The government's latest position strengthens Makamba's hand. An extraordinary general meeting of Telecel Zimbabwe this month confirmed that Makamba, who has been chairman for the past two decades, had stepped down as chairman and director. In his place, Mlotshwa was appointed.
In an interview with the Sunday Times, Makamba said that during his time at the helm of the company, there had been persistent attempts to push him out or force him to relinquish his shareholding.
"There have always been parties interested in acquiring Telecel Zimbabwe by hook or by crook. There has always been this heavy hand over Telecel Zimbabwe. We have lived with that kind of pressure and it's partly what led to my arrest in 2004. All kinds of pressure have been put on me to let go of some shares, if not the whole company."
The government says its stance is not a sign that it has picked sides in the dispute between Makamba and Mlotshwa.However, correspondence shows it seems keen to see the back of Makamba at Telecel Zimbabwe. He is being "engaged with over other recent conduct or actions that have compromised his capacity to sit on the board and to chair it productively", it reads. This is thought to relate to an audio clip in which the businessman denigrates Mnangagwa.
The recording is seen to be behind the last-minute barring of Makamba's bid to return to politics. He was stopped from participating in Zanu-PF's primary elections for Mount Darwin in April.
In correspondence this week, Telecel International notes that both Mlotshwa and Makamba have claimed a board seat and the chairmanship of the board. "It is not for us as Telecel International to pass judgment and determine whether or not you [Mlotshwa] have acquired shares in Empowerment Corporation ... Telecel International will not involve itself in the internal squabbles at Empowerment Corporation," the letter reads.
Telecel International said it did not recognise the extraordinary general meeting on June 7, at which Mlotshwa had "approved" his own appointment as a board member and director. "There are already misconceptions in the media that you have assumed the chair and a board seat. The board will consider whether it is necessary to correct these misperceptions," it said.
Mnangagwa appears to have been sucked into the messy battle over the control of Telecel Zimbabwe, with the correspondence indicating there was an attempt to enlist his help to enforce Mlotshwa's appointment.
Telecel International said there had been an attempt by Mlotshwa to influence its representative, Selby Hwacha, but it would not be "intimidated nor affected in any way by any extra-legal or other threats or accusations".