Business / Companies
DHL resists Zimbabwe indigenisation plans
11 Jan 2015 at 03:31hrs | Views
German multi-national courier service company - Deutsche Post International BV (DHL) - reversed an indigenisation deal it entered into with a Zimbabwean firm - Solbase Investments Private Limited - and subsequently engaged some locals whom it is believed to be using as fronts, it has emerged.
Documents seen by The Sunday Mail show that Solbase Investments signed a 100 percent shareholding take-over of DHL International Zimbabwe (Pvt) Ltd with DP DHL on January 15, 2013.
The transaction was initially valued at US$2,7 million, but was later scaled down to US$1,7 million by the Reserve Bank of Zimbabwe (RBZ) following an audit by Price Waterhouse Coopers (PwC) in September 2013, which established the company's net asset value.
On January 28, 2013, Solbase Investments and DHL International Zimbabwe sought RBZ approval to remit proceeds from the sale to DP DHL.
The National Indigenisation and Economic Empowerment Board (Nieeb) accepted the acquisition of DHL Zimbabwe and recommended the participation of employees in the interest of broad-based economic empowerment.
DP DHL then officially handed over DHL Zimbabwe to Solbase Investments on March 1, 2013, leading to the resignation of all DP DHL-appointed directors and Solbase appointing its own board chaired by Dr Gibson Mandishona.
To confirm the indigenisation deal, on July 23, 2013, then Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere wrote to DHL approving the indigenisation plan in terms of Section 5 (6) of the Indigenisation and Economic Empowerment (General) Regulations 2010.
Minister Kasukuwere's successor, Francis Nhema, finalised the deal by issuing a one-year Certificate of Provisional Compliance to Solbase Investments on October 7, 2013 .
Questions are now being raised on how DHL is operating when its Certificate of Provisional Compliance expired on October 7, 2014.
In keeping with indigenisation and empowerment requirements, Solbase donated 10 percent of its shares to the National Business Council of Zimbabwe (NBCZ), a quota which was to be distributed equally to women and youths, and another 10 percent to workers.
But the workers - in a letter dated December 24, 2014 - complained that even after making a US$500 000 profit, the company did not pay them their 10 percent dividend.
In addition, they accused the managing director, Mr Jeff Phiri, of lying that the workers did not have a 10 percent stake.
The Sunday Mail has in its possession a copy of the DHL Employee Share Trust Notarial Deed of Trust.
Solbase also wrote to Nhema and Chief Secretary to the President and Cabinet Dr Misheck Sibanda highlighting how DHL was seeking to derail the empowerment agenda.
The letter reads, in part: "In a letter dated February 28, 2013, the RBZ sought clarification pertaining to the financial side of our transaction and requested among other things, audited financials of DHL International Zimbabwe up to December 2012.
"This was to enable the RBZ to verify the value of DHL International Zimbabwe. It then came to light that DHL International Zimbabwe had not been audited for a period beginning 2009 to 2012. Upon this revelation, we immediately engaged Price Waterhouse Coopers to carry out the audit.
"Based on the audited results, the RBZ wrote to us on November 18, 2013 and directed us that in order to guard against prejudice to local investors, the purchase price must be reduced to US$1,7 million, the net asset value indicated in the audited financials. The directive was communicated to DP DHL."
Solbase Investments also noted that after the indigenisation deal, it managed DHL for over 18 months, realising profits amounting to US$500 000.
The Sunday Mail also has in its possession a letter dated January 28, 2013, which was written by DHL director Hennie Heymans, confirming that DHL International Zimbabwe was being taken over by Messrs Stalin Tauya, Josphat Nyamutumbu, Ralph Chigoya and Edward Chiringa.
He wrote: "This transaction will see the ownership and control of DHL International Zimbabwe (Pvt) Limited move to indigenous Zimbabweans, thereby also fulfilling the requirements of the Indigenisation and Economic Empowerment regulations.
"The company, DHL International Zimbabwe, formed in 1980 through investments from DHL Worldwide Express BV (Middlestown B.V), is being sold to Solbase Investments as a going concern and will continue to operate as a sole agent for DP DHL International in Zimbabwe under an Agency Agreement which has been signed."
He added: "The sale of 100 percent shareholding to Solbase Investments at a price of US$2,7 million (adjustable as per signed agreements — considerations on date of conclusion to reflect any changes in actual balances in bank) has been agreed as a fair value and repayment will be on an Initial Cash Consideration and loan facility basis.
"The loan facility being extended by DP DHL International BV to Solbase Investments is for US$1,7 million and the repayment of the loan will be financed by the utilisation of 50 percent of any dividends declared by DHL International Zimbabwe Ltd from date of completion of sale until the loan is repaid in full."
But after running the company for 18 months, Solbase Investments was surprisingly booted out and DP DHL announced that it was appointing new directors and reconstituting the board.
Messrs Chigoya, Chiringa and Nyamutumbu were suspended from DHL on Monday last week.
Solbase Investments - in its letter to Nhema - had noted: "They also indicated in their correspondence that they were taking over the running of the business, as they had come up with an alternative indigenisation plan, a position we strongly resisted. We considered such an act as hostile and illegal repossession.
"This was also in defiance of RBZ queries as well as the Indigenisation and Empowerment Act. They premised their hostile repossession on the spurious precedent in the contract, a precedent that should be subject to the laws and regulations of the country."
Black empowerment activist and NBCZ president Dr Keith Guzah also weighed in: "As black economic empowerment activists, we are not going to allow a situation where a few indigenous sellouts masquerading as fair-minded technocrats scuttle a Government programme meant to strategically place the commanding heights of our economy into the hands of true indigenous players. Any attempt to reverse the deal will be challenged vigorously." DHL - through its lawyer, Mr Canaan Dube - said the company has since submitted an alternative indigenisation plan to Nieeb.
"DHL is committed to complying with local laws and regulations in every country it operates in. Currently, DHL has lodged an indigenisation application with the National Indigenisation and Economic Empowerment Board and is working with the authorities to ensure compliance.
"Considering that the application is currently being processed, we cannot comment any further on this issue."
However, Nieeb chief executive Mr Wilson Gwatiringa professed ignorance of the matter.
"I don't have details; I am not aware of that and I am not at work anyway," he sai
Documents seen by The Sunday Mail show that Solbase Investments signed a 100 percent shareholding take-over of DHL International Zimbabwe (Pvt) Ltd with DP DHL on January 15, 2013.
The transaction was initially valued at US$2,7 million, but was later scaled down to US$1,7 million by the Reserve Bank of Zimbabwe (RBZ) following an audit by Price Waterhouse Coopers (PwC) in September 2013, which established the company's net asset value.
On January 28, 2013, Solbase Investments and DHL International Zimbabwe sought RBZ approval to remit proceeds from the sale to DP DHL.
The National Indigenisation and Economic Empowerment Board (Nieeb) accepted the acquisition of DHL Zimbabwe and recommended the participation of employees in the interest of broad-based economic empowerment.
DP DHL then officially handed over DHL Zimbabwe to Solbase Investments on March 1, 2013, leading to the resignation of all DP DHL-appointed directors and Solbase appointing its own board chaired by Dr Gibson Mandishona.
To confirm the indigenisation deal, on July 23, 2013, then Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere wrote to DHL approving the indigenisation plan in terms of Section 5 (6) of the Indigenisation and Economic Empowerment (General) Regulations 2010.
Minister Kasukuwere's successor, Francis Nhema, finalised the deal by issuing a one-year Certificate of Provisional Compliance to Solbase Investments on October 7, 2013 .
Questions are now being raised on how DHL is operating when its Certificate of Provisional Compliance expired on October 7, 2014.
In keeping with indigenisation and empowerment requirements, Solbase donated 10 percent of its shares to the National Business Council of Zimbabwe (NBCZ), a quota which was to be distributed equally to women and youths, and another 10 percent to workers.
But the workers - in a letter dated December 24, 2014 - complained that even after making a US$500 000 profit, the company did not pay them their 10 percent dividend.
In addition, they accused the managing director, Mr Jeff Phiri, of lying that the workers did not have a 10 percent stake.
The Sunday Mail has in its possession a copy of the DHL Employee Share Trust Notarial Deed of Trust.
Solbase also wrote to Nhema and Chief Secretary to the President and Cabinet Dr Misheck Sibanda highlighting how DHL was seeking to derail the empowerment agenda.
The letter reads, in part: "In a letter dated February 28, 2013, the RBZ sought clarification pertaining to the financial side of our transaction and requested among other things, audited financials of DHL International Zimbabwe up to December 2012.
"This was to enable the RBZ to verify the value of DHL International Zimbabwe. It then came to light that DHL International Zimbabwe had not been audited for a period beginning 2009 to 2012. Upon this revelation, we immediately engaged Price Waterhouse Coopers to carry out the audit.
Solbase Investments also noted that after the indigenisation deal, it managed DHL for over 18 months, realising profits amounting to US$500 000.
The Sunday Mail also has in its possession a letter dated January 28, 2013, which was written by DHL director Hennie Heymans, confirming that DHL International Zimbabwe was being taken over by Messrs Stalin Tauya, Josphat Nyamutumbu, Ralph Chigoya and Edward Chiringa.
He wrote: "This transaction will see the ownership and control of DHL International Zimbabwe (Pvt) Limited move to indigenous Zimbabweans, thereby also fulfilling the requirements of the Indigenisation and Economic Empowerment regulations.
"The company, DHL International Zimbabwe, formed in 1980 through investments from DHL Worldwide Express BV (Middlestown B.V), is being sold to Solbase Investments as a going concern and will continue to operate as a sole agent for DP DHL International in Zimbabwe under an Agency Agreement which has been signed."
He added: "The sale of 100 percent shareholding to Solbase Investments at a price of US$2,7 million (adjustable as per signed agreements — considerations on date of conclusion to reflect any changes in actual balances in bank) has been agreed as a fair value and repayment will be on an Initial Cash Consideration and loan facility basis.
"The loan facility being extended by DP DHL International BV to Solbase Investments is for US$1,7 million and the repayment of the loan will be financed by the utilisation of 50 percent of any dividends declared by DHL International Zimbabwe Ltd from date of completion of sale until the loan is repaid in full."
But after running the company for 18 months, Solbase Investments was surprisingly booted out and DP DHL announced that it was appointing new directors and reconstituting the board.
Messrs Chigoya, Chiringa and Nyamutumbu were suspended from DHL on Monday last week.
Solbase Investments - in its letter to Nhema - had noted: "They also indicated in their correspondence that they were taking over the running of the business, as they had come up with an alternative indigenisation plan, a position we strongly resisted. We considered such an act as hostile and illegal repossession.
"This was also in defiance of RBZ queries as well as the Indigenisation and Empowerment Act. They premised their hostile repossession on the spurious precedent in the contract, a precedent that should be subject to the laws and regulations of the country."
Black empowerment activist and NBCZ president Dr Keith Guzah also weighed in: "As black economic empowerment activists, we are not going to allow a situation where a few indigenous sellouts masquerading as fair-minded technocrats scuttle a Government programme meant to strategically place the commanding heights of our economy into the hands of true indigenous players. Any attempt to reverse the deal will be challenged vigorously." DHL - through its lawyer, Mr Canaan Dube - said the company has since submitted an alternative indigenisation plan to Nieeb.
"DHL is committed to complying with local laws and regulations in every country it operates in. Currently, DHL has lodged an indigenisation application with the National Indigenisation and Economic Empowerment Board and is working with the authorities to ensure compliance.
"Considering that the application is currently being processed, we cannot comment any further on this issue."
However, Nieeb chief executive Mr Wilson Gwatiringa professed ignorance of the matter.
"I don't have details; I am not aware of that and I am not at work anyway," he sai
Source - Sunday Mail
