Business / Companies
Nicholas Vingirai to bounce back as a major shareholder at ZB Holdings
12 Jun 2011 at 05:21hrs | Views
VILIFIED exiled banker Mr Nicholas Vingirai is set to bounce back as a major shareholder of ZB Holdings Limited according to a deal which is being brokered by lawyer and TN Holdings group chief executive Mr Tawanda Nyambirai.
Impeccable sources revealed that the proposal by Mr Nyambirai, acting on behalf of Mr Vingirai, "is well documented and had been approved by the RBZ, but the delay was now in the implementation." ZB Holdings Limited has been involved in a legal dispute with Mr Vingirai's Transnational Holdings Limited over the takeover of Intermarket Holdings Limited (IHL) by ZB Holdings Limited. The dispute is pending before the Supreme Court.
It is understood that Mr Nyambirai proposed the appointment of Mr Vingirai, Mr Michael Mahachi, and Mr Gibson Muringai to the board of ZB Holdings as part of the dispute settlement. Mr Nyambirai further proposed the issue and allotment of new ZB Holdings Limited shares to the shareholders of IHL, and the cancellation of existing IHL shares, with the result that, after the settlement, the company will have a new number of shares in issue of which a certain equity, still to be established, will be held by Mr Vingirai's Transnational Holdings Limited.
Sources revealed that Mr Nyambirai contends that the resolution of the dispute will result in all the new ZB Holdings Limited shares to be issued pursuant to the dispute settlement being listed on the Zimbabwe Stock Exchange (ZSE) and being allowed to trade alongside the existing issued ZB Holdings Limited shares.
In 2007, ZB Financial Holdings dragged the ZSE to court for refusing to list the IHL shares it had acquired on the local bourse. The shares, numbering up to 159 185 542, were supposed to have been listed on March 31 2007 and they translate into 84,26 percent IHL equity. However, the ZSE could not proceed to list ZB Holdings as the former largest shareholder in IHL ' Transnational Holdings, owned by Mr Vingirai ' had applied to the High Court seeking a freeze on the transaction, which it felt was not properly done.
"The settlement of the dispute will also enhance the chances of the company being removed from the sanctions list, thereby enhancing the business prospects of the company.
The public confidence in the company is likely to increase, with a consequent increase in the deposits the company's banking subsidiaries will be able to raise. It is envisaged that these anticipated developments will unlock shareholder value expected through improved share price performance."
This paper has it on good authority that Mr Nyambirai requested the RBZ and the Minister of Finance to intervene to resolve this dispute as has been done in relation to other disputes in the financial services sector which have seen Trust Bank, Royal Bank and Barbican being weaned off from ailing Zimbabwe Allied Banking Corporation (ZABG).
A letter written to ZB Holdings chairman by the RBZ Governor reveals that "because the current board of the company (ZB Holdings Limited) actively participated in making the decisions that are subject to the dispute, it would be inappropriate to expect them to exercise impartiality in resolving this dispute."
Prior to the liquidity crisis that resulted in some subsidiaries of Intermarket Holdings Limited being placed under curatorship alongside other banking institutions, the following were the shareholders of Intermarket Holdings Limited: Transnational Holdings Limited (72,03 percent); Zimbabwe Banking Corporation Limited (7,32 percent); Old Mutual Life
Assurance Company Zimbabwe Limited (7,17 percent); Zimbabwe Development Bank (5,23 percent); Local Authorities Pension Fund (5,18 percent); Fidelity Life Assurance Zimbabwe Limited (1,94 percent); and Mining Industry Pension Fund (1,13 percent). A scheme of arrangement was undertaken in 2005 whereby all the creditors of IHL's banking subsidiaries converted their debt to equity in IHL and the following became the shareholders of IHL pursuant to the scheme of arrangement:
RBZ (50,99 percent); Transnational Holdings Limited (15,42 percent); ZB Financial Holdings Limited (8,88 percent); Mashonaland Holdings Limited (6,71 percent); ZB Asset Management (2,01 percent); Old Mutual Investments Corporation (Private) Limited (1,55 percent); TelOne (1,41 percent); Genesis Investment Bank (1,40 percent); Cimas Medical Aid Society (1,25 percent); Zimbabwe Development Bank (1,13 percent); Local Authorities Pension Fund (1,12 percent); Sensemate Investments (Private) Limited (1,08 percent); others (7,05 percent).
ZB Holdings Limited then entered into an agreement with the RBZ on November 8 2006 whereby the RBZ sold to ZB Holdings Limited the 50,99 equity it held in IHL as a result of the scheme of arrangement. The consideration for the shares was ZW$5 billion.
In 2007, ZB Holdings Limited proceeded to offer its shares to the shareholders of IHL through an undated circular.
Some shareholders took up the offer, while others, notably Transnational Holdings Limited owned by the founders of IHL group led by Mr Vingirai, and Econet Wireless Zimbabwe Limited, declined the offer and proceeded to institute legal proceedings against the company.
The sale of shares by the RBZ to ZB Holdings has been challenged on the grounds that the other shareholders of IHL at the time were not afforded an opportunity to exercise their rights of pre-emption in respect of the shares sold by the RBZ to ZB Holdings.
Econet Wireless Limited and Transnational Holdings Limited have, for long, being arguing that "other shareholders ought to have been given the opportunity to buy the shares sold to ZB Holdings by the RBZ.
This contention is based on Section 33 of IHL's Articles of Association, which, among other things, provides that: "The other shareholders shall be entitled (each pro rata to the number of shares held by him or her in the capital of the company) to acquire the shares and moneys owing referred to in the transfer notice upon the terms and conditions therein specified.
"The significance of this contention is that the RBZ did not sell the shares it held at market value. This was so because the RBZ held the shares for purposes of stabilising the industry, and not for commercial gain.
"Therefore, the shareholding matrix of IHL after the sale of the shares held by the RBZ would have been different from what it turned out to be had the other shareholders been offered these shares that were sold below market value.
"It has been alleged that the failure to offer the shares to the other shareholders pro rata to their shareholdings in IHL is in breach of the Articles of Association of the company.
"The approval of the Zimbabwe Stock Exchange (ZSE) was also not given. Consequently, the ZBH shares issued pursuant to the share exchange remain unlisted, while the remainder of the ZBH shares are listed on the ZSE.
"Transnational Holdings Limited and Econet Wireless Zimbabwe Limited have also challenged the valuation of IHL relative to that of ZB Holdings Limited that was used in the share exchange on the grounds that the values were not independently determined and that the values were skewed in favour of ZB Holdings Limited to the detriment of the shareholders of IHL," reads part of the letter.
Assuming that all the other shareholders had exercised their rights of pre-emption, IHL would have had a major shareholding of 31 percent and ZB Holdings 18 percent after the RBZ sold its shares.
Impeccable sources revealed that the proposal by Mr Nyambirai, acting on behalf of Mr Vingirai, "is well documented and had been approved by the RBZ, but the delay was now in the implementation." ZB Holdings Limited has been involved in a legal dispute with Mr Vingirai's Transnational Holdings Limited over the takeover of Intermarket Holdings Limited (IHL) by ZB Holdings Limited. The dispute is pending before the Supreme Court.
It is understood that Mr Nyambirai proposed the appointment of Mr Vingirai, Mr Michael Mahachi, and Mr Gibson Muringai to the board of ZB Holdings as part of the dispute settlement. Mr Nyambirai further proposed the issue and allotment of new ZB Holdings Limited shares to the shareholders of IHL, and the cancellation of existing IHL shares, with the result that, after the settlement, the company will have a new number of shares in issue of which a certain equity, still to be established, will be held by Mr Vingirai's Transnational Holdings Limited.
Sources revealed that Mr Nyambirai contends that the resolution of the dispute will result in all the new ZB Holdings Limited shares to be issued pursuant to the dispute settlement being listed on the Zimbabwe Stock Exchange (ZSE) and being allowed to trade alongside the existing issued ZB Holdings Limited shares.
In 2007, ZB Financial Holdings dragged the ZSE to court for refusing to list the IHL shares it had acquired on the local bourse. The shares, numbering up to 159 185 542, were supposed to have been listed on March 31 2007 and they translate into 84,26 percent IHL equity. However, the ZSE could not proceed to list ZB Holdings as the former largest shareholder in IHL ' Transnational Holdings, owned by Mr Vingirai ' had applied to the High Court seeking a freeze on the transaction, which it felt was not properly done.
"The settlement of the dispute will also enhance the chances of the company being removed from the sanctions list, thereby enhancing the business prospects of the company.
The public confidence in the company is likely to increase, with a consequent increase in the deposits the company's banking subsidiaries will be able to raise. It is envisaged that these anticipated developments will unlock shareholder value expected through improved share price performance."
This paper has it on good authority that Mr Nyambirai requested the RBZ and the Minister of Finance to intervene to resolve this dispute as has been done in relation to other disputes in the financial services sector which have seen Trust Bank, Royal Bank and Barbican being weaned off from ailing Zimbabwe Allied Banking Corporation (ZABG).
A letter written to ZB Holdings chairman by the RBZ Governor reveals that "because the current board of the company (ZB Holdings Limited) actively participated in making the decisions that are subject to the dispute, it would be inappropriate to expect them to exercise impartiality in resolving this dispute."
Prior to the liquidity crisis that resulted in some subsidiaries of Intermarket Holdings Limited being placed under curatorship alongside other banking institutions, the following were the shareholders of Intermarket Holdings Limited: Transnational Holdings Limited (72,03 percent); Zimbabwe Banking Corporation Limited (7,32 percent); Old Mutual Life
Assurance Company Zimbabwe Limited (7,17 percent); Zimbabwe Development Bank (5,23 percent); Local Authorities Pension Fund (5,18 percent); Fidelity Life Assurance Zimbabwe Limited (1,94 percent); and Mining Industry Pension Fund (1,13 percent). A scheme of arrangement was undertaken in 2005 whereby all the creditors of IHL's banking subsidiaries converted their debt to equity in IHL and the following became the shareholders of IHL pursuant to the scheme of arrangement:
RBZ (50,99 percent); Transnational Holdings Limited (15,42 percent); ZB Financial Holdings Limited (8,88 percent); Mashonaland Holdings Limited (6,71 percent); ZB Asset Management (2,01 percent); Old Mutual Investments Corporation (Private) Limited (1,55 percent); TelOne (1,41 percent); Genesis Investment Bank (1,40 percent); Cimas Medical Aid Society (1,25 percent); Zimbabwe Development Bank (1,13 percent); Local Authorities Pension Fund (1,12 percent); Sensemate Investments (Private) Limited (1,08 percent); others (7,05 percent).
ZB Holdings Limited then entered into an agreement with the RBZ on November 8 2006 whereby the RBZ sold to ZB Holdings Limited the 50,99 equity it held in IHL as a result of the scheme of arrangement. The consideration for the shares was ZW$5 billion.
In 2007, ZB Holdings Limited proceeded to offer its shares to the shareholders of IHL through an undated circular.
Some shareholders took up the offer, while others, notably Transnational Holdings Limited owned by the founders of IHL group led by Mr Vingirai, and Econet Wireless Zimbabwe Limited, declined the offer and proceeded to institute legal proceedings against the company.
The sale of shares by the RBZ to ZB Holdings has been challenged on the grounds that the other shareholders of IHL at the time were not afforded an opportunity to exercise their rights of pre-emption in respect of the shares sold by the RBZ to ZB Holdings.
Econet Wireless Limited and Transnational Holdings Limited have, for long, being arguing that "other shareholders ought to have been given the opportunity to buy the shares sold to ZB Holdings by the RBZ.
This contention is based on Section 33 of IHL's Articles of Association, which, among other things, provides that: "The other shareholders shall be entitled (each pro rata to the number of shares held by him or her in the capital of the company) to acquire the shares and moneys owing referred to in the transfer notice upon the terms and conditions therein specified.
"The significance of this contention is that the RBZ did not sell the shares it held at market value. This was so because the RBZ held the shares for purposes of stabilising the industry, and not for commercial gain.
"Therefore, the shareholding matrix of IHL after the sale of the shares held by the RBZ would have been different from what it turned out to be had the other shareholders been offered these shares that were sold below market value.
"It has been alleged that the failure to offer the shares to the other shareholders pro rata to their shareholdings in IHL is in breach of the Articles of Association of the company.
"The approval of the Zimbabwe Stock Exchange (ZSE) was also not given. Consequently, the ZBH shares issued pursuant to the share exchange remain unlisted, while the remainder of the ZBH shares are listed on the ZSE.
"Transnational Holdings Limited and Econet Wireless Zimbabwe Limited have also challenged the valuation of IHL relative to that of ZB Holdings Limited that was used in the share exchange on the grounds that the values were not independently determined and that the values were skewed in favour of ZB Holdings Limited to the detriment of the shareholders of IHL," reads part of the letter.
Assuming that all the other shareholders had exercised their rights of pre-emption, IHL would have had a major shareholding of 31 percent and ZB Holdings 18 percent after the RBZ sold its shares.
Source - Byo24News
