Telling my Access Finance story

FOLLOWING a recent public announcement by Access Finance Group, a local remittance and financial services company, that its chief executive Singathini Raymond Chigogwana is retiring and would be replaced by Salim Eceolaza, it became clear that there has been some material shareholding and structural changes at the business.

The notice said Eceolaza, who took over from Chigogwana on 1 October, is a "representative shareholder" in the company's new equity structure. This means there is now at least one new shareholder in the business. Chigogwana remains on board as a non-executive director.

These changes affect me as a former shareholder who has not been fully paid for his shares. Although I have received cash payments, there is still some settlement through real estate which is outstanding. I have been given control of three townhouses in Harare which are part of the transaction, but not the title deeds to the properties.

Thus the announcement on 19 September 2023, which surprised some in the remittance business, triggered keen interest on my part as a former shareholder who still has a vested interest in the company. I was also interested in it as a banker and businessman who follows market developments and trends.

Chigogwana and I were business partners running several related companies; Access Forex (Pvt) Ltd, Access Finance (Pvt) Ltd, Tara Capital (Pvt) Ltd, Thirty-Six Mountbatten (Pvt) Ltd as well as Access Forex SA (Pty) Ltd.

At the beginning in 2014, as chief executive, Chigogwana owned 56% shareholding, myself who ended up as managing director 20% and chairman Isau Bwerinofa 24%.

When we started working together, we had a gentleman's agreement that Chigogwana would at a later stage sell 10% shareholding to me from his 56% equity. It was a simple and straightforward deal.

Having known each other well and being friends from our days at the National University of Science & Technology in Bulawayo and working in the banking sector in Harare, we did not sign any paper agreement as trust and goodwill was enough to reach an understanding. It was just verbal. That is how we trusted each other.

Trust is the social glue that holds business relationships and friendships together. Business partners who trust each other spend less time and energy plotting against one another's downfall and protecting themselves from being short-changed to achieve better financial outcomes in the company.

It was good to work with him. When building a business with friends, you are not starting a new relationship from scratch and venturing into uncharted territory. You begin with an established history, background, shared vision and values, motivations and personal experiences. And when the going gets tough, you count on your strong bonds and closeness to keep you together to weather the storm. At least this is what I thought at the beginning, but reality is different sometimes.

Yet at the same it is important to remember that when starting a business you don't just choose someone because they are a close friend. That is not enough. Working with a friend is a decision that should not be dictated solely by friendship.

There should be more important considerations than that. The most important factor should be their professional and personal qualities. You have to ensure that the friends you bring into the business have the right skills sets, motivation, ambition and determination to perform during times of adversity. You should complement each other. People have different strengths and weaknesses. No one knows everything. Not even Albert Einstein during his time.

Trust is important because even best friends don't always agree on everything.

As Marie-Claire Ross, author of Trusted To Thrive: How leaders create connected and  accountable teams, writes: "Trust is the cornerstone of business.  It's the basis of every human relationship, every interaction, every communication, every initiative, every work project and even any strategic imperative you need to accomplish. Trust is essential. Without it, social groups can't function properly.  Without trust, you generate a dysfunctional organisation with teams that make disappointing progress. An organisation that generates low trust is like a plane without fuel. You can fumble around in it all you want but it's not going to successfully advance you to your destination. It is trust that shifts a group of people into a team."

In any business, there will be moments where you hold different opinions. This can make it hard to function and if not well managed it can end up leading to a fight.

So remember to always listen to your business partners and trust their judgment without necessarily falling for everything hook, line and sinker.

When things go wrong among friends working together, the betrayal can be deep and painful. The agony of betrayal can be devastating and tormenting. Traumatic.

After we launched our business with Chigogwana, Bwerinofa and myself, we did well. The company performed, grew and we made good returns. We invested some of the proceeds and expanded. The business was on the rise even in a difficult operation environment amid economic challenges. We were bucking the trend in many respects. So only us could disturb its growth trajectory.

The remittances business in Zimbabwe has been lucrative due to the need for efficient financial solutions in the current digital environment. Access Finance
thrived in that market, serving individuals and Zimbabwe's biggest companies.
In his 2023 mid-term monetary policy statement, Reserve Bank of Zimbabwe governor John Mangudya said as at 30 June international remittances through official channels amounted to US$1.4 billion, a 4% increase from US$1.3 billion recorded in the same period last year.
 
The market is big enough for different players.
But things have changed now at Access Finance due to internal strife and turmoil.
As the business grew so did our dreams, ambitions and vested interests as shareholders.  
Everything seemed to be going on well until I raised the issue of the 10% shareholding in 2019. I believed it would be an easy issue to deal with as it was based on trust and only required that we adhered to our agreement. I had trust in my colleagues.

Little did I know that the issue would rip apart our friendship of years. When I raised the shareholding issue, it was initially met with a palpable lack of enthusiasm and indifference, then later as I repeatedly brought it up the reaction degenerated into hostility and resistance. That's when I realised things had changed.

Power and money sometimes change people, some say. Yet others say they don't  change people, they simply show you who they really are.

With time the shareholding issue and associated negotiations became confrontational and acrimonious, a difficult thing to handle among friends and colleagues.

Still, I hoped that our friendship and trust would be enough to overcome our differences and settle matter amicably, but that was never to be. We tried everything between ourselves and through mediations by friends and colleagues, still we couldn't bridge the gap which continued widening with each meeting. Sometimes we would make progress – or so it appeared; take a step forward, only to take two steps backwards the following day. That pattern repeated over time ended up destroying all the trust and inevitably ruining the friendship which now lies in ashes.

When I eventually realised Chigogwana and even Bwerinofa would not sell me the promised 10% as initially agreed, I decided to dispose of my shareholding and leave. I couldn't stand what I viewed as a betrayal of trust.

For me it was not about money per se, but trust and confidence. Our profession - banking - is about trust and confidence.

Confidence and trust are critical in how the economy functions. Spending, saving, borrowing, investing and associated transactions all depend on confidence and on the trust people have in financial institutions such as banks, insurance and credit-card companies, investment and pension funds.

Trust is also needed because the quality of many financial services cannot seen at face value, is believed in over years. Without trust, that won't be possible.

Still, my exit was not easy after we had agreed to differ and part ways. A new deadlock soon arose on valuation of the business and the value of my shares. We engaged a valuer, but still we spent months arguing about that process.

After months of acrimonious back and forth, on 29 September 2022, we eventually agreed to settle, but only after I had accepted a much lower offer of US$600 000 – instead of US$1 million – which I knew was a raw deal; a complete rip-off.

But for the sake of peace and moving on, I took it. The truth is was not happy, but I had to leave the toxic environment which had been created by the hard negotiations and collapse of trust, the glue to our friendship and business relationship.

The eventual US$600 000 buyout deal included a cash payment of US$280 000 less US$140 000 as an offset transaction over a debt I owed to the company, with the US$140 000 balance being paid into two instalments of US$80 000 and US$60 000 separately.

It was also agreed I would get three townhouse units valued in Harare US$320 000.
The townhouses are located at No. 36 Mountbatten Complex in Marlborough, which has 37 townhouse units valued US$3.9 million. Three of those properties became mine and I took them over, but without title deeds.
This is where the problem is now.

This brings me back to the Access Finance's recent announcement. When the announcement was made in the media, I became interested mainly because while I have performed my side of the bargain in the agreement, Chigogwana and his entities haven't. They haven't given me my title deeds. Yet their announcement shows that there has been shareholder changes at Access Finance, leaving me in the lurch.

As a result of this, I consulted my lawyers and we filed a court application demanding the title deeds or US$320 000 as payment. Failure to which I would have no choice but to attach properties belonging to Chigogwana to recover the value of my shares.

Besides that, Chigogwana and his entities should pay all the taxes, imposts and charges of the conveyance. I have already done my part of the in terms of paying my capital gains tax for the sale of shares.

The applicants in the High Court case – HC1007/23 – over properties are myself and my entities Ferden Investments, Rock Drill Mining and Seanmart Investments, while the respondents are Chigogwana, Bwerinofa, Thirty-Six Mountabatten, Access Finance, Access Forex, Tara Capital, The Sheriff of the High Court and the Registrar of Deeds and Companies.

I want Chigogwana to transfer the properties which were part of the settlement in real estate – that is with title deeds - or in cash form. If that is not done, I want the court to issue an order for me to attach my former partner's assets to settle the remaining part of the deal.

I also want my erstwhile colleagues to pay all transfer taxes, imposts and costs associated with the deal, particularly the conveyance part of it. This is important as they are the ones selling property to me for my shares in the deal. They are the sellers (Chigogwana and Bwerinofa)  and I'm the buyer.

In my application, I put Chigogwana, in terms of clause 9 of the agreement of sale of my shares and property as well as the share purchase agreement, in mora (default) to address the issue within 14 days. In the event that the breach is not rectified, I have shall have a right to cancel the agreement or demand redress in casu (during the case).

When one sells an immovable property which is held under a Deed of Transfer (Title Deed), the buyer upon paying the full purchase price, is entitled to take transfer of the property. The process by which the buyer takes transfer is called conveyancing. The person (a lawyer) who does the conveyancing is called a conveyancer.

So Chigogwana's lawyer Nikita Madya of Wintertons Legal Practitioners is the conveyancer in this case.
That is why he now is caught up in a storm of controversy over my shares and property on this issue as reported in the media recently.

Madya of Wintertons is highly experienced corporate and commercial lawyer who has been in the field for over 23 years. He joined Wintertons on 1 July 2000 and became a partner on 1 July 2003.
I'm represented in the court application by Zinyegere & Rupapa.

Having been stuck in this transaction for almost a year now, I'm beginning to feel Madya has not been fair and just in handling the transactions between myself and my erstwhile business partner, Chigogwana.
We have filed a court case against Chigogwana and several entities in which I'm a still shareholder since the dispute has not yet been fully settled. I got some cash payments, but my properties remain encumbered after a recent sale of the companies by Chigogwana and Bwerinofa, which is problematic legally.

I can't go into detail on some of the issues because they are part of the court case, hence sub judice, but the issue about how the conveyancer – Madya - has handled the transactions is not in the court case.
The shares were sold by way of cash and properties in an agreement signed exactly one year ago. As the payment for the shares was in part in the form of properties, it follows that the shares could not be handed over or transferred until the transfer of the property was done. At the very least the two ought to have been done simultaneously. Now that the shares have been transferred without a corresponding transfer of title, I have been left exposed.

Madya was supposed to hold the share transfer forms in escrow until all aspects of the transactions were complete which he did not. It seems he favoured his own client, that is Chigogwana, and only acted to protect his interests at my expense.

By his own account or public profile, Madya says he is a highly-experienced corporate and commercial lawyer who has been in the field for more 20 years. He has extensive experience in corporate and commercial transactions, having been involved in a number of mergers and acquisitions for both listed and unlisted companies covering different sectors of the economy.

He also has an excellent grasp of the laws of Zimbabwe and has been involved in advising clients in a number of commercial transactions.

So I don't understand how he has handled this transaction and how we ended up here. It's baffling.
This begs many questions: First, how and why did Madya transfer my shares before I was fully paid? Second, is it legally and morally right to do that? Third, it is professional? Fourth, is it just and is it in the interest of justice therein? Fifth, why am I being prejudiced like that after fulfilling my side of the bargain and the agreement?

My lawyers have written letters to Madya and his client over the issue of outstanding title deeds,  but they have neglected or refused to respond to this  issue. How does a whole Wintertons lawyer fail to complete a simple conveyancing process like this one?  Why are they not producing my titles deeds? This is where the issue is now. There is a problem with conveyance and I'm not getting straight answers, which is worrying and disturbing, particularly given my recent experiences with my former colleague and stories we hear in the market when some lawyers breach trust on transactions.

I have lost all trust and confidence in their process, hence my public appeal to Madya and Wintertons to address this issue urgently, honestly, transparently and professionally to the satisfaction of all parties involved.

Madya, especially as a lawyer, knows better that justice delayed is justice denied.

Senziwani Sikhosana is former Access Finance Group shareholder and Managing Director (Access Forex).