Govt calls Nssa to order over Telecel acquisition

Source: Govt calls Nssa to order over Telecel acquisition | The Herald

Conrad Mwanawashe : Business Reporter

Government has called the National Social Security Authority to order directing the authority to focus on financing the acquisition of Telecel Zimbabwe through Zarnet, instead of attempting to usurp the deal from the state-owned technology concern. In confidential documents seen by The Herald Business, Government also expressed concern at the combative tone of the authority following a plethora of letters written by the authority’s lawyers, which threatened to derail the deal.Through the Attorney General’s office, Government made it clear that it was not happy with efforts to sneak in new issues in earlier agreements, which has the effect of renegotiating the agreements entered into for the acquisition of the mobile company by Zarnet.

The AG’s office told NSSA through its lawyers Mawere-Sibanda that Government was not happy with the confrontational attitude exhibited by the authority and its lawyers.

“It is in light of this that we are unhappy with the confrontational and combative tone of your letters to us. We do not appreciate it and hope that you will not persist with the same,” the AG’s office said.

According to agreements between the parties, Zarnet acquired 100 percent shareholding of Telecel International Limited from international telecoms giant VimpelCom valued at $40 million and financed by NSSA.

TIL owned 60 percent of Telecel Zimbabwe and Zarnet’s acquisition means that information technology company took over the shareholding in the local mobile company.

“The Empowerment Corporation owns the remaining 40 percent.

But, NSSA has argued that it is entitled to the shareholding in Telecel Zimbabwe because it financed the acquisition, contrary to the terms of the initial agreements, according to documents seen by The Herald Business.

Since NSSA decided to take over the shareholding, there has been a flurry of letters between NSSA’s lawyers, Mawere-Sibanda and the Attorney General’s Office, representing Government and Zarnet, with the authority seeking to renegotiate certain sections of the agreements signed between the parties.

However the AG’s office reminded NSSA that the Telecel Zimbabwe stake belonged to Zarnet and not NSSA.

“Secondly, in case you may not be aware of the genesis of the Telecel issue, we wish to advise you that Cabinet, on behalf of Government, made a decision that it was to acquire Telecel.

“Government thereafter decided to use the vehicle of an entity which it owns in the form of Zarnet to make the acquisition,” the AG’s office wrote NSSA lawyers Mawere-Sibanda last week.

The authority, through its lawyers attempted to have certain sections of the purchase and financing agreements renegotiated; efforts which were strongly resisted by Government. In some of the letters, NSSA gave deadlines to Zarnet to fulfil certain conditions.

“The two agreements in question were entered into in a spirit of cooperation and with mutual desire to give effect to the resolution of Cabinet to acquire the business of Telecel.

“Your client should, therefore, remain focused on this overriding objective.

“If there are any problems we should discuss them in a constructive and amicable manner.”