Professor John Makumbe warns Nigel Chanakira
HARARE – “Be wary of Mugabe’s benefaction,” is the warning Professor John Makumbe is giving Nigel Chanakira in his on-going wrangle for control of Kingdom Financial Holdings Ltd (KFHL).
President Robert Mugabe at the weekend insinuated that the battle-weary KFHL founder and ex-chief executive could repossess his bank, and Meikles Africa shareholders their money later, under the controversial Indigenisation Law.
“Chanakira is a banker and businessman,” Makumbe told the Daily News in an exclusive interview. “He knows how business is run. He must not be fooled by Mugabe and the Indigenisation Law.
“This law is ruinous and dangerous for business. This is not the way Chanakira should regain his bank. Today he can benefit from Mugabe, but tomorrow the same Mugabe will come and take away the same bank, that’s how Zanu PF operates,”
He said Mugabe was politicking and Chanakira should resist the temptation to benefit from his posturing, which he said was not new in the veteran former guerilla’s modus operandi.
“Involving politicians to settle disputes is not the way business is done. The matter is between Chanakira and Meikles Africa shareholders. Chanakira should instead find ways of settling this dispute,” said Makumbe.
“Chanakira must not be fooled by Mugabe. The whole thing kills of the economy. Political interference drives away investors and that’s the last thing Zimbabwe needs at the moment.”
Mugabe at the weekend said Meikles is obliged to sell its 42,9% stake in KFHL to Chanakira who has the right of first refusal, in terms of empowerment laws.
“We have said ownership should be 51% local, and 49% foreign,” Mugabe said. “We should not be afraid to take what is ours. If it is in South Africa then foreign rules would apply,” Mugabe was quoted saying at the weekend.
Analysts said that Mugabe took encouragement from both Finance Minister Tendai Biti and central bank chief Gideon Gono, who gave the two feuding companies an ultimatum to resolve the simmering dispute.
Both Biti and Gono said last month they had had “enough of this nonsense”, referring to the raging saga which is centred on the outstanding balance that Chanakira must pay Meikles Africa shareholders to regain control of KFHL, whose flagship is Kingdom Bank.
Chanakira is struggling to pay off the conglomerate US$22,5 million to pave way for his firm’s de-merger from the group.
Had Chanakira, who had been given up to August 5 by Meikles Africa shareholders to pay off the money, succeeded, he would have snapped up a 43,9 % stake to re-gain control of KFHL.
KFHL merged with Meikles Africa in 2008 to become Kingdom Meikles Africa Ltd (KMAL) in a deal that raised prospects of the financial concern listing on the Wall Street’s elite bourse, the New York Stock Exchange.
The new conglomerate included TM Stores, Meikles Hotel, Meikles Stores, Tanganda, Cotton Printers and Kingdom Bank and its subsidiaries.
However, what had promised to be a new era for KMAL turned into horror as disputes emerged which led to an acrimonious divorce between the two merged entities.
In the meantime, the Meikles board has given a thumbs up to the KFHL demerger from the group.
An Extra-ordinary General Meeting (EGM) has been slated for October 4.
At the EGM, the shareholders will decide what to do with KFHL once the demerger has been consummated.
Legally, the Meikles shareholders, who hold both shares in Meikles Africa Limited and KFHL, cannot be bullied and have the prerogative of deciding who should invest in the latter once an investor – who might not be Chanakira – is found. – Daily News
Posted by Sakhile Malaba
on September 2, 2010. Filed under Opinion.
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