Two individual shareholders of Zimbabwe’s smallest cellco Telecel, James Makamba and Jane Mutasa, have paid USD3.5 million to the firm’s majority holding vehicle Telecel International for a disputed 11% stake, reports AllAfrica.com. The Postal and Telecommunications Regulatory Authority (POTRAZ) had given Telecel International until 30 June to bring its shareholding structure in line with legislation prohibiting foreigners from owning in excess of 50% of any local communications firm, or risk losing its licence. Telecel International owns 60% of Telecel, while the other 40% is in the hands of Empowerment Corporation (EC), a local consortium, itself comprising Kestrel, owned by Mr Makamba (23%), IEG (18%), Indigenous Business Women’s Organisation (headed by Mrs Mutasa, 17%), National Miners’ Association (14%), Zimbabwe Farmers’ Union (14%) and Magamba eChimurenga (14%). EC has the right of refusal over the 11% stake in Telecel. In November last year it was reported that Leo Mugabe, President Robert Mugabe’s nephew, failed in a bid to acquire 11% of Telecel from Telecel International after being refused permission from EC.
Mr Makamba wrote to POTRAZ confirming the payment in a letter dated 20 July 2007, which read: ‘The two main shareholders of EC have already made payment to credit Telecel International’s (TIL) account with Telecel Zimbabwe (TZL) for the 11% which TIL are obliged to transfer…whereby foreign ownership is reduced to 49%. Payment was based on the asking price of USD3.5 million, which translates to ZAR875 million. However, if the value of the shareholding based on the valuation of the TZL shares be higher, then the shareholders of EC will consider a top-up of the payment based on a fair value. If the valuation be lower, then it will seek the return.’ POTRAZ chairman Professor Fred Zindi confirmed receipt of the letter and said he would convene a board meeting to discuss the development.
News of the deal sparked angry reactions from other members of EC who felt that Makamba and Mutasa had acted without regard for the consortium as a whole. Chairman of National Miners’ Association Christopher Manyuchi said: ‘As shareholders, we are unhappy with what Mr Makamba and Mrs Mutasa have done. We are the Empowerment Corporation and our board should have met to agree on the transaction. But that has not happened. There is lack of transparency,’ and added that he had since approached POTRAZ over the issue.