Telecel saga: President’s dilemma

Source: Telecel saga: President’s dilemma – The Zimbabwe Independent April 6, 2018

PRESIDENT Emmerson Mnangagwa is caught in an invidious position in the Telecel Zimbabwe saga, as he has to choose between taking sides with his son-in-law and prominent lawyer Gerald Nqobile Mlotshwa, coveting the telecoms company, and protecting government’s 60% shareholding, the Zimbabwe Independent has learnt.

By Hazel Ndebele/Melody Chikono

Last year, Mlotshwa, who is married to Mnangagwa’s daughter Farai Victoria, apparently emerged as a significant Telecel shareholder after he secured businessman James Makamba’s 40% shareholding. This followed reports the controversial tycoon had sold his stake in Empowerment Corporation (EC) to a local consortium that included Mlotshwa and businessman George Manyere.

However, Makamba has denied selling his shares to Mlotshwa, arguing he was only his legal counsel, while sources say Mlotshwa acted as his proxy.

Sources close to the deal say Makamba failed to pay legal fees to Mlotshwa, resulting in the debt being converted into equity.

Besides fighting for the EC shares, Makamba and Mlotshwa are locked in a fierce battle to buy Telecel’s controlling 60% shareholding held by government.

Sources, however, told the Independent that government wants to sell its stake to a foreign investor to provide competition, specifically to Econet Wireless Zimbabwe. Econet is the largest telecoms company in terms of subscriber base and income.

“Government’s leverage is that whoever takes over Telecel Zimbabwe is able to settle outstanding licence fees and have enough competitive muscle to take on Econet Wireless,” the source said.

Makamba, a former Zanu PF MP and central committee member, fled the country in 2005 after he was accused of allegedly externalising some funds, although it is widely believed the real problem was social, involving Mugabe’s family.

His business interests span the retail, telecommunications, mining, agricultural, property and professional consultancy sectors, as well as digital publishing, even if he has lost some of his assets over the years.

Sources told the Independent Makamba was now vigorously trying to bounce back and assume control of some of his business interests run by proxies. Makamba, together with women’s empowerment lobbyist Jane Mutasa, owned the majority shareholding in the EC-held shares through Kestrel Corporation. He had 95% of the EC shares.

Mlotshwa declined to comment, although he said he will be available to give his side of the story tomorrow. He confirmed that he was holding a 40% stake in Telecel.

“I’m out of town at the moment. Let’s meet on Saturday (tomorrow) and talk it out. I understand the issue of the shares. I’m afraid I might say things I’m not supposed to say over the phone.You can go ahead and publish without my input. As for your questions last week, I’m afraid I did not see them,” he said.
In a separate emailed response, Mlotshwa said he doubts that Makamba was disputing that he sold shares to him. “I doubt very much that Dr Makamba has ever come to you disputing anything,” he said.

However, Information, Communication and Technology minister Supa Mandiwanzira last week confirmed the issue, but said government, Telecel’s majority shareholder, is distancing itself from the evolving fight. He said Makamba came to his office and insisted that Mlotshwa was only his legal counsel.

Last week, Makamba said he would only comment if the Independent reveals its sources to him. “I will certainly give you the story, but I would want to know who your source is first. Name your source and I will talk, otherwise it is like someone comes to you and says I hear that your father is not your father,” he said.