Tawanda Nyambirai, Econet’s chairman told Standardbusiness their intervention to stabilise the situation had not been received well and they hoped the new shareholder would be understood better by the regulators.
“Econet has decided to identify a well-resourced and credible shareholder to buy its shares and bring stability to Afre.
“It is Econet’s hope that such a shareholder could be less misunderstood and more acceptable to the regulators.
“The only shareholder that Econet can think of which meets this criteria is NSSA,” Nyambirai said.
He said the two parties were currently discussing how NSSA would buy Econet’s 19,71% stake in Afre.
“In the event that NSSA comes in, Econet will be happy to lift the interdict that it has over the 33% of Afre held by ReNaissance Financial Holdings Limited (RFHL) that was pledged to secure the money owed to Econet,” he said.
Nyambirai said Econet was willing to sell its direct 5% shareholding in Pearl Properties to NSSA as part of the transaction. NSSA confirmed the deal last week.
“A written offer has been made by Econet to us for them to sell their 19% stake in Afre. NSSA is considering the offer,” it said.
NSSA, which has invested in listed and unlisted companies, is interested in Afre because of its property arm, Pearl Properties to diversify its portfolio.
If the deal sails through, NSSA will have a foothold on Afre after its earlier attempt to enter via troubled ReNaissance Merchant Bank (RMB) could not sail through.
RMB is currently under curatorship after it was allegedly looted by the founding directors Patterson Timba and Dunmore Kundishora, according to a report by the central bank.
Timba, who was Afre’s executive chairman, allegedly used Afre’s shares as security when he borrowed money to recapitalise the bank.
Nyambirai told Standardbusiness the final straw for Econet was when the regulators stopped a meeting of shareholders to deliberate on the recapitalisation of the company and election of the board of directors.
The forensic audit showed that Timba had allegedly spirited away assets worth over US$6,4 million and Afre had commenced litigation to recover those assets.
Regarding allegations that had been made against some directors, Nyambirai said meetings were held with those concerned who did not accept some of the allegations, but nonetheless “agreed to stand down at the proposed AGM and asked shareholders to have the final say after having been allowed an opportunity to present their side of the story”.
In a joint statement, the Insurance and Pension Commission, Zimbabwe Stock Exchange and the Securities Exchange Commission of Zimbabwe said the proposed meetings of Afre shareholders should not go ahead until a comprehensive audit of the firm is completed.
Nyambirai said stopping the meetings of shareholders had the effect of allowing the same board to remain in place “notwithstanding that the mandate of the board had been brought to question by the findings of the forensic audit”.
Nyambirai said the US$15 million recapitalisation of Afre was agreed by shareholders last year and suspects the reason why it had not been conducted was that RFHL was not ready and did not have the resources to follow their rights.
When Econet reappointed directors to the board, Nyambirai said the directors had a clear mandate to ensure that the rights offer was implemented with speed, find out the extent of the prejudice to the company and RFHL and plug that hole pending recovery of the funds.
He said Afre was given the mandate to convince its clients to keep business with it and only one client had moved to Old Mutual as a result.