Nicholas Vingirai takes control of Mashonaland Holdings

Source: Nicholas Vingirai takes control of Mashonaland Holdings | The Financial Gazette June 1, 2017

NICHOLAS Vingirai, through his investment vehicle, Transnational Holdings Limited (THL), has taken control of Mashonaland Holdings (Mashold) following the appointment of his crony, Michael Mahachi, as chairman of the property investment and development concern.

Mahachi, a property developer and a THL nominee, has replaced ZB Financial Holdings (ZB) chief executive officer, Ronald Mutandagayi.

Other THL nominees to the Mashold board are Mike Manyika, Vingirai and Ralph Watungwa.
The swift ascendency of Mahachi to the Mashold chairmanship is meant to protect Vingirai’s interests, according to sources. The banker has had a turbulent relationship with fellow ZB shareholder and NSSA, since he won shareholding in the banking group following a protracted court battle.
The fight with NSSA, which has a 37,79 percent shareholding in ZB, has been over board appointments in the group, a contentious dividend payment and Vingirai’s quest for a bigger stake in the financial institution.

In a statement accompanying financial results for Mashold released last week, Mahachi said: “Messrs Manyika, Vingirai, Watungwa and myself were appointed directors effective March 1, 2017. I was subsequently appointed chairman of your company. I wish to thank Mutandagayi for his leadership during his tenure as chairman.”

The appointments mark a departure from tradition; previously, the ZB CEO has chaired the Mashold board, representing the interests of all ZB shareholders.
It would be interesting to see how NSSA and other ZB shareholders will react to this development, as it implies the new board members now represent the interests of a single shareholder, without taking into account minority interests.

The government, which previously held 23,5 percent, is now a 3,71 percent shareholder after agreeing to cede 19,79 percent to THL following a legal battle that led to a May 31, 2016 agreement between the parties. Old Mutual has a 5,5 percent stake in ZB.

Mahachi, a close buddy of Vingirai, was also appointed to the ZB board early this year after THL assumed a 19,79 percent shareholding in the financial services concern as compensation for the loss of Intermarket Holdings (IHL) in 2004. The Reserve Bank of Zimbabwe (RBZ) had bailed out IHL’s subsidiaries and later converted the debt into equity under a High Court scheme of arrangement.
Mahachi, Vingirai and his other nominees were, however, all booted out of ZB board at an annual general meeting (AGM) held last month.

Vingirai, whose influence has been building since last year when he made the comeback into the group, is riding on the strength of THL’s shareholding in ZB.
NSSA spearheaded Vingirai’s dramatic fall from the ZB board at the last AGM.
NSSA and other shareholders were not happy that THL was paid a US$658 699 dividend by ZB and that Vingirai’s investment vehicle later claimed an additional 10,9 million ZB shares or 6,21 of the financial group’s total issued shares.

NSSA protested against the dividend payment to THL, arguing that Vingirai’s investment vehicle was not on the share register at the cut- off date when payment was made on June 17, 2016. THL was only registered as a ZB shareholder on February 6, 2017.

The fact that government was still on the ZB shareholder register on the record date means that it had received a dividend from the financial group. NSSA said the January 2017 dividend payment to THL was, in effect, a duplicate payment which prejudiced other shareholders.
But THL’s position was that it was entitled to the dividend payment because its share transfer deal with government took effect on May 31, 2016.

Now, NSSA is being backed by the RBZ in its push for THL to reimburse cash it received it received from ZB. The RBZ has since issued an order for a refund as well as the appointment of independent non-executive directors and the reconstitution of ZB’s board committees.

The appointment of independent directors has been done, a move that resulted in Vingirai, Mahachi, Zororo Muranda, Obey Matizanadzo, Richard Mbaiwa and John Nhavira being voted out of the board at the AGM last month.

Terekuona Bvurere, Olatunde Akerele and Charity Manyeruke, all nominees of NSSA, were voted into the board, joining Fanuel Kapanje, who is the group’s finance director and Mutandagayi.
Vingirai lost his Intermarket Holdings Group at the height of a 2004 bank crisis after the RBZ bailed out troubled banks that were tottering on the brink of collapse.
The central bank took over Intermarket before selling it to ZB.
Vingirai, however, fought back and reclaimed his shareholding.

In its financial statement for the six months to March 31, 2017, Mashold’s revenue went down 16 percent to US$2,4 million, from US$2,8 million recorded in comparable period the previous year. This was attributed to declining rental income due to voids and rental reviews.
There was a 51 percent improvement in profit for the period under review to US$984 748, from US$650 412. This was mainly due to positive fair value adjustments in quoted securities.

Mashold’s current assets stood at US$8,6 million during the period under review, from US$8,2 million recorded during the same period the previous year.

Its current liabilities came down to US$1,3 million during the period under review, from US$1,7 million the previous year.