THE crisis at Tedco Industries Ltd continues to unfold with revelations this week that the former chief executive officer Michael Ndoro resigned following a serious share dispute with majorit
y shareholder Simba Mangwende.
Mangwende is understood to have failed to hand over some 52 million shares – 20% of Tedco – that he had promised Ndoro in November last year.
A letter of agreement was signed between Mangwende and Ndoro on November 14 last year, outlining the share scheme.
In the letter Mangwende agreed to sell 52 million shares to Ndoro in three batches of 26 million, 13,2 million and 13,2 million respectively. The shares allocation was part of the employment package which Tedco used to lure Ndoro from Schweppes last year.
The letter shows that Mangwende signed on behalf of his investment vehicle, A Simba, while Ndoro signed on behalf of his investment company, Entergon Investment.
In the letter Mangwende had promised to allot the first 26 million shares during the first two weeks of November – 13,2 million within 180 days and the other 13,2 million within 270 days.
The transaction would have meant that Ndoro became the majority shareholder in Tedco with 20% holding.
Mangwende would then have reduced his current 31% controlling stake to 11%.
According to the agreement Ndoro would have had the power to appoint his own directors to the board and implement a turnaround plan for the ailing retail and furniture group.
Problems however began early this year when Mangwende failed to deliver the 52 million shares to Ndoro as per agreement.
It has also emerged that Interfin Stockbrokers have garnished Mangwende’s 31% stake in Tedco after he failed to service his mounting debts with the firm. Mangwende is one of the founding directors of Interfin.
Sources say Ndoro threw in the towel last week following Mangwende’s failure to allot him the promised shares.
“Ndoro was going to be that major shareholder in Tedco had Mangwende allotted the 52 million shares to him,” said a source close to the deal. “He had to resign because instead of being a shareholder, he was now a mere employee which was not part of the agreement of November 14 last year.”
Ndoro confirmed to businessdigest that he had signed a share scheme agreement with Mangwende.
He also confirmed that Mangwende could not meet part of the agreement but refused to give further details.
“We are black brothers. There is no need for us to destroy each other,” said Ndoro. “I did not get the shares from Simba (Mangwende) as per agreement.”
The revelation on Mangwende’s garnished shares mean that Interfin Stockbrokers now has a controlling stake in Tedco.
It also means Mangwende cannot sell his shares to anyone unless allowed to do so by Interfin.
Meanwhile, Tedco shareholders last week blocked Mangwende’s attempt to acquire a 49% equity in Tedco Industries, which had been put up for sale.
Shareholders also agreed to postpone the extraordinary general meeting to consider new resolutions tabled at a general meeting last week.
Mangwende could not be reached for comment at the time of going to press yesterday.