THE proposed extraordinary general meeting (EGM) by Kingdom Meikles Africa shareholders led by chairman John Moxon on October 23 to fire CEO Nigel Chanakira and two other board members could hit a snag as minority shareholders of the conglomerate are set to launch a massive legal challenge against attempts to remove the directors.
The Zimbabwe Independent can reveal that the small shareholders were this week seeking legal counsel from lawyer Addington Chinake of Kantor & Immermann to stop Moxon from calling an EGM to remove Chanakira and directors Callisto Jokonya and Rugare Chidembo from the board.
Moxon is proposing that the trio be replaced by Marilyn Hugill, his sister, and South African-based Ashwin Mancha, Jack Mitchell, Fiona Silcock and Carl Stein, all linked to his family.
The Moxon-linked companies in KMAL include ACM Investments, JRT M Investments, ASH Investments, FPS Investments and APWM Investments. They jointly hold 43% of the total issued share capital of KMAL. Econet Wireless holds 10%.
Information to hand shows that the minority shareholders who are expected to file an urgent High Court chamber application today were also lobbying the Reserve Bank to intervene because they assert KMAL is a holding company for a financial institution – being Kingdom Bank – which is governed by the Banking Act.
They therefore want the High Court to issue a declarator to this effect. This would mean that no board member of KMAL can be removed without approval of the central bank, neither can new board members be appointed without the RBZ’s nod.
The minor shareholders also want Moxon to publish a circular to all shareholders explaining the nature of the conflict in the board. They are also questioning the appropriateness and impartiality of Muchadeyi Masunda who has been retained as chairman of the EGM.
KMAL board chairman Moxon is temporarily relinquishing the position for the EGM to avoid a conflict of interest.
The minor shareholders want the court to stop Masunda from chairing the EGM because they believe that he has had a long relationship with Moxon as board member of Meikles before the merger with Kingdom Financial Holdings, Tanganda and Cotton Printers to form KMAL.
They will also argue that Masunda is an inappropriate chair by virtue of being mayor of Harare. Masunda is a board member of at least a dozen companies quoted on the Zimbabwe Stock Exchange.
But it is the quest to remove the directors that has set Moxon and the minority shareholders on a collision course. The smaller shareholders this week told the Independent that they had not been furnished with information on the nature of the conflict between Chanakira and Moxon. They have also said that they have not been served with the notice for the EGM.
“Other than what we saw in the newspapers, there has been a paucity of information on what is actually happening in the company in which we are shareholders,” said a CEO of a listed company which holds shares in KMAL.
“We cannot go into the AGM blind and take a decision which could hurt our businesses. What corporate governance are we talking about here?”
By Vincent Kahiya