Minority shareholders in Telecel Zimbabwe, a unit of Russian telecoms giant, VimpelCom, have drawn swords against each other after a Zimbabwean investment group offered to buy-out the Empowerment Corporation's (EC) stake in the telco, which has also been served with a notice for non-compliance with the country's indigenisation laws.
Telecel Zimbabwe has just below 2.5 million subscribers, according to statistics from the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz). It says on its website that it is jointly owned by Telecel Globe (60%), a unit of VimpelCom and the Empowerment Corporation (40%).
This shareholding structure puts it in violation of Zimbabwe's indigenisation laws which require that foreign investors hold no more than 49%. The company's operating licence was renewed in 2013 after assuring the government that it would sort out its shareholding to become fully compliant with the empowerment policy.
However, it is not only its foreign shareholding that is controversial; the local shareholding, under the Empowerment Corporation, has also become problematic. Businessman, James Makamba, reportedly owns 75% of Empowerment Corporation, but other partners in the corporation, including former director, Jane Mutasa, dispute this.
"This shareholding maze is becoming problematic for the company and pausing risks for the company. VimpelCom has to give up some of its shareholding while the local shareholders are in disagreement; this is not healthy for the company as confidence in its operations will be affected by these developments," a source told ITWeb Africa on Wednesday evening.
Potraz has since written to Telecel Zimbabwe that its licence certificate is being withheld over its non-compliance with the indigenisation policy. The Potraz letter to Telecel Zimbabwe also warns that it cannot continue to operate without first complying with the policy and government officials say its licence may be revoked if it "continues to violate indigenisation laws".
As Telecel Zimbabwe battles to become fully compliant with the southern African country's law, its local shareholders have drawn swords against each other, with an extra-ordinary general meeting set for February 20 to consider the sale of the Empowerment Corporation's stake to Brainworks Capital now under dispute.
The Empowerment Corporation's managing director and nephew to President Robert Mugabe, Patrick Zhuwawo is now under fire from Jane Mutasa, co shareholder in the Empowerment Corporation for calling the meeting. Mutasa also accuses Zhuwawo of disregarding the rights of minority shareholders in the Empowerment Corporation after he unilaterally called for a meeting to approve the purchase of the corporation's state in Telecel Zimbabwe.
Zhuwawo wrote in a notice to the Empowerment Corporation's shareholders this week that the extra-ordinary general meeting would have to consider and possibly approve a $20 million offer for its stake from Brainworks.
Sources with knowledge of developments at the company have told ITWeb Africa that longstanding shareholder disputes are at the center of the latest feud.
"We call upon you as secretaries (for the company) to put an immediate stop to the purported extra-ordinary general meeting. The honourable member is not clothed with the authority, both at law and in fact, to act for and on behalf of the Empowerment Corporation," Jane Mutasa's investment vehicle in the Empowerment Corporation, Selpon Investments said in a communication to the group's company secretary, Carlton Consultancy.