Leo Mugabe pressures Telecel for slice of profits

20 Nov 2006

After failing in a bid to buy a stake in Zimbabwe’s smallest cellco Telecel, Member of Parliament Leo Mugabe, who is President Robert Mugabe’s nephew, is now demanding that the telco surrenders part of its earnings to him, reports allAfrica.com. According to the report he is also seeking to gain influence in Telecel’s technical services department, which covers base station installation, maintenance and network expansion. Mugabe Junior, who has been fighting for a share in Telecel Zimbabwe for the past five years, wants the company to surrender 1% of its annual revenue to his company, Integrated Engineering Group (IEG). He also wants a contract to recruit technical staff on behalf of Telecel. Mugabe’s renewed pressure comes after his clandestine bid to acquire 11% of Telecel Zimbabwe from Telecel International collapsed four weeks ago, reportedly because he did not have permission from the cellco’s 40% stakeholder Empowerment Corporation. Mugabe has threatened to sue Telecel if they refuse to give in to his demands, citing a 1997 agreement which he said entitles him to a slice of the firm’s profits and a technical management contract. Mugabe’s lawyers wrote to Telecel on 25 July instructing them to stop ‘recruiting technical staff directly without our client’s consent’, and to stop using any other contractor for technical services. Sources at the company said Mugabe’s demands came after Telecel spurned his offer to supply telecoms equipment for its network expansion programme.

Zimbabwe, Telecel Zimbabwe