Drama at Hwange shareholders meeting

via Drama at Hwange shareholders meeting – NewsDay Zimbabwe 1 July, 2014 by Taurai Mangudhla

THERE was drama yesterday at a Hwange Colliery Company Limited (HCCL) annual general meeting when shareholders shot down two proposals in respect of 2012 directors’ fees and payment of $1,4 million to employees as compensation for a botched 2007 share option scheme.

The shareholders turned down payment of the 2012 directors’ fees which amounted to $476 352, saying the money was too much at a time the company was struggling to pay workers.

However, the shareholders approved the 2013 directors’ fees of $302 012.

HCCL’s single largest individual shareholder, Nicholas van Hoogstraten said directors were getting a lot of money while employees had gone for 11 months without being paid. HCCL currently owes employees a combined $19 million.

Van Hoogstraten’s Messina Investments has 16,76% in HCCL behind government which has a 37,10% stake.

“I am opposing as I did last year and the reasons are pretty obvious, we are spending a lot of amounts on directors when expenses are not even accounted for. If you add expenses, the figure becomes outrageous,” van Hoogstraten said.

“Workers are not getting paid and I am sure most of these directors don’t even need the money.”

In response, HCCL board chairman Farai Mutamangira said the fees were paid as appreciation of directors’ contribution to the company as the norm in any company.

“I am sure all the directors here are not here for the money,” Mutamangira said.

Mutamangira had told shareholders that a survey done by Industrial Psychology Consultants concluded that HCCL’s directors fees were below market averages. But Van Hoogstraten dismissed the research.

“This is, for lack of a better word, a mickey mouse survey. It should have been done using publicly quoted companies that have government as the major shareholder,” he said.

Van Hoogstraten voted for approval of a $302 000 payment as 2013 directors fees with reservations that workers were not getting paid.

There were also disagreements over a messy 2007 share option scheme.

Mutamagira proposed for approval a $1,4 million value restitution to 2 315 employees who subscribed to the share option scheme and avoid paying $5,6 million which was being claimed by the workers through the courts.

Van Hoogstraten and Mines secretary Francis Gudyanga, on behalf of government, however, voted against the motion.

Mutamangira said workers were holding on to company houses as security for what they paid for the shares in 2007.

Van Hoogstraten said payment was done six months after the agreed share price under a hyper-inflationary environment thereby creating problems for the transaction.

In response, Mutamangira said the issue will be resolved in court and the company risked paying $5,6 million in damages.