Storm engulfs Moxon

via Storm engulfs Moxon – The Zimbabwe Independent July 17, 2015 by Taurai Mangudhla/Fidelity Mhlanga

Meikles Ltd chairman John Moxon’s investment in Mentor Africa (Mentor) has torched off a storm amid allegations he allegedly externalised the group’s assets, failed to disclose material information to shareholders on his involvement in the South African company and general abuse of office by directors.

Documents seen by businessdigest show that shareholders in the diversified group raised alarm with the Securities Exchange Commission of Zimbabwe (SECZ) over the company’s decision to impair or write-down the balance of a multimillion dollar debt owed by the Reserve Bank of Zimbabwe (RBZ) and Mentor in the company’s financial year ended 31 March 2015.

According to information from sources, who requested anonymity, all adjustments were pushed through to the recent financial year and may not truly represent the performance of the company in the reporting period.

“As for the balance owed by the RBZ, since interest was booked as income in 2014 the question is whether the write down should be matched with its income by a prior year adjustment as per International Accounting Standards IAS 8. This would give a different performance for 2014 than that reported,” said the source.

Meikles in 2012 acquired shareholding in Mentor and merged its flagship Cape Grace hotel in Cape Town, South Africa, into Mentor whilst the funds initially held by Mentor on behalf of the Cape Grace would be converted into equity in Mentor.

Post the transaction, Meikles Ltd had approximately 35% in Mentor. Sources close to the RBZ hinted the bank could be concerned by possible externalisation of assets in the Meikles/Mentor deal.

The Mentor transaction, according to shareholders, was done without a due diligence exercise or a valuation being carried out on Mentor, adding directors of Mentor are also known business associates of Moxon and Meikles family.

As such, the impairments relating to Mentor were put to question. Meikles Ltd shareholders say there is need to know if the investment was properly valued in previous years in order to confirm if it has been impaired from its true value at purchase and in subsequent years.

To date, Meikles Ltd has not received dividends from its Mentor investment, which has been carried at cost US$27,65 million since 2013.

“The Mentor transaction should be investigated as it may have benefitted Moxon and the Meikles family. There has been no disclosure on the financial status of Mentor Africa and any benefits that should have accrued to Meikles Ltd shareholders by way of dividends. If it is found that the transaction was not at arm’s length, shareholders of Meikles Ltd demand a reversal of the transaction such that ownership of Cape Grace Hotel should revert back to Meikels Ltd,” added the source.

In a letter dated May 15 to Securities Commission of Zimbabwe CEO Tafadzwa Chinamo, Eddie Cross, an economist with nominal equity in Meikles, said the RBZ liability had a material impact on the group’s financial performance.

He said the effect of the increase in the RBZ’s liability to Meikles’ 2013/2014 financial year was to turn a US$11 million loss into a US$37 million profit for the year.

He also alleged Meikles houses its shareholding in Mentor in a British Virgin Island domiciled company.

The British Virgin Islands is a tax haven.

“On what grounds have the Exchange Control Authorities in Zimbabwe granted approval for the total externalisation of the holdings of the Meikles family to a tax haven known as the British Virgin Islands?.”

Moxon would not be drawn to respond to questions from businessdigest on grounds the information was already in the public domain.

“Perhaps you would be good enough to advise the shareholder, whom you have not identified, to study all previous statements made by the company and if the shareholder still remains uncertain, he or she could contact me,” said Moxon.

COMMENTS

WORDPRESS: 4
  • comment-avatar

    Well, they will never get their money back from RBZ, that is for sure. Therefore, that is a total loss.

    Its great if he managed to “externalize” some of the assets, it at least keeps them out of the hands of The Mafia. Which I guess is why they are pissed-off?

    • comment-avatar
      Farai 7 years ago

      Your missing the point, Meikles is a publicly listed company and if these allegations are true, then the chairman has embezzled the funds from the Mentor deal!!

  • comment-avatar

    Wello then, good for him! It is good if a non-Zanoid manages to liberate some cash from Zim.

    I feel NO sympathy whatsoever because Zanooo in “the name of the people” have stolen BILLIONS, no doubt from Meikles too. I am not sure of the extent of Zanooo’s theft but an amount of $22 billion has been mentioned

  • comment-avatar

    Re-reading it, it seems to me that he just moved the money to a safer place. The Reserve Bank have already stolen millions from Meikles so it is wise to move money to a place where the rule of law applies and Zanooo cannot get their sticky fingers on it.

    Because Moxon is white, it is 100% OK to steal everything he has. That is what Mugabe has said, so many times.