THE Zimbabwe Stock Exchange (ZSE) has recommended that Econet Wireless reconvene an Extraordinary General Meeting (EGM) called by the company last month to seek shareholder approval for a transaction to speed up its network expansion.
Econet called the meeting to seek shareholder approval for a US$94 million credit from Econet Wireless Group to fund the next phase of its expansion plans.
Old Mutual and other allied top shareholders opposed the move, and have contested the published results which were in favour of the transaction.
The dissenting shareholders approached the ZSE seeking a reversal of the vote. In a letter to Econet this week, the ZSE committee said a way to settle the dispute would be to reconvene the meeting.
It said: “The Zimbabwe Stock Exchange has received complaints from certain shareholders that the manner in which the poll was conducted and the scrutineering process were flawed and the ex post facto attempts to rectify the process were defective.
“The Committee of the ZSE has deliberated on the issue and it is the view that the irregularities surrounding the poll are so serious as to vitiate the entire process.”
Asked to comment yesterday Econet corporate communications manager Ranga Mberi said: “Econet has given the ZSE our response on the matter and we are therefore unable to comment further.”
Old Mutual is questioning the actions of Econet regarding conduct of the poll.
The controversy surrounding Econet Wireless’ EGM last month is the culmination of years of bitter corporate battle between two of the Zimbabwe Stock Exchange’s largest investors.
Old Mutual and Econet have been feuding for several years now. Last year, their feud broke out into an ugly fight when Old Mutual tried in vain to reverse the merger of Kingdom and Meikles.
The two giants are also known to be at opposing ends of the battle for KMAL, with Old Mutual backing John Moxon and his associates. Econet is the single largest shareholder in KMAL.
The long-running battle between these two corporate giants also follows after Econet’s decision to acquire, together with Renaissance, a controlling stake in FML, Old Mutual’s largest competitor in the life business.
The EGM which started at 10 am turned into a marathon that lasted until 7pm after Old Mutual and a group of foreign shareholders demanded a secret poll based on the number of shares held by each member present.
The shareholders also raised conflict of interest issues relating to chairman Tawanda Nyambirai’s role in the transaction. Nyambirai will step down at the next AGM.
With EWG and TSMI, who between them have more than 50%, unable to vote because of conflict of interest provisions, Old Mutual had hoped that its own shareholding of about 12%, and that of the other allied shareholders, would be enough to vote down the deal.
After the poll had been conducted, the vote in favour of the transaction was still much greater than that mustered by Old Mutual and its supporters.
Controversy erupted after Nyambirai said Old Mutual was not eligible to vote, because it had emerged that some of the institutions and investors they claimed to represent as an asset manager had not given them authority to vote on their behalf.
When shareholders and analysts arrived at the EGM they did not receive the results of the EGM. It was only after the request of a poll by some shareholders following a question and answer session that the complexion of the EGM changed and the role of the auditors, Deloitte & Touche, became relevant as scrutineers to the voting process.
Mainly because a poll is a democratic process provided for in the Companies Act, the decision to hold the voting process by poll was passed by shareholders at the meeting.
At the time the poll was called for, the auditors made it clear that because they had not been forewarned that a poll would be conducted, they needed time to prepare the serialised ballot papers for voting by shareholders present at the EGM and time to verify names of shareholders and shareholding held by shareholders as per the register from First Transfer Secretaries.
For those shareholders who were not present, their proxy forms previously submitted to the company secretary prior to the meeting would stand in favour of the nominated proxies and still participate in the voting process through their nominated proxies.
BY PAUL NYAKAZEYA