We have just received a press statement from Dr James Makamba, the chairman and major shareholder of the Empowerment Corporation (EC), outlining the reasons for the Telecel ownership turbulence and some assurance that the issue will be resolved.
The EC is the local consortium that has a 40% stake in the mobile network operator Telecel Zimbabwe and its stake has been the subject of a takeover bid and struggle for control. This is the first statement from Dr Makamba regarding the issue. Makamba, who is the founder of Telecel Zimbabwe, has been the most visible owner of the mobile network since its inception.
Most of the statement seems to be focused on allaying the fears of subscribers and other stakeholders, clarifying the official position from EC and the impact this whole ownership tussle has had on issues around foreign investment and indigenisation.
You can read the full statement below.
Makamba announces moves to solve Telecel shareholdingadvertisement
Dr. James Makamba, Empowerment Corporation (EC) and Telecel Zimbabwe Board Chairman, has said EC which owns 40% stake in the mobile company is ready to resolve the internal shareholding disputes that have resulted in recent negative publicity around the company’s licensing and shareholding.
Telecel has been caught up in a protracted shareholding dispute involving various EC shareholders who, through the investment vehicle, own a collective 40% in the mobile operator.
The original EC shareholders included Affirmative Action Group (AAG), Indigenous Business Women Organization (IBWO), Zimbabwe Farmers Union (ZFU), Zimbabwe Liberation War Veterans Association (ZLWVNA), Zimbabwe (S.S) Miners Association, Kestrel Corporation (Private) Limited and Integrated Engineering Group.
Makamba says the recent shareholding disputes in EC are due to the fact that when EC was formed its first project was to set up a cellular network which was capital intensive and as a direct result there was need to raise huge amounts of capital for the project. This need to raise capital resulted in the share structure for EC being changed when various entities in the consortium opted out due to various reasons but primarily because of the inability to raise their portions of the required funding.
“The shareholding of EC went through various reorganizations during the formative years of Telecel due to the need for EC to raise funding for its contribution to the capital requirements of the project. It is these reorganizations within the shareholding of EC that have formed the unfortunate basis for the current disputes,” explained EC Chairman, Dr. James Makamba.
“EC, as represented by me, its Chairman, has taken the decision to finally resolve, all matters pertaining to the shareholding of the company. EC has engaged the relevant Ministries with the specific purpose of rationalizing and resolving the issues related to the shareholding of the company,” continued Makamba.
Makamba promised that once a final solution to the disagreements around the shareholding had been reached, which would be soon, he would announce it officially.
“I am confident that this legacy impasse will be resolved in a manner that recognizes the immense contribution and hard work by the Telecel Zimbabwe employees and partners as well as the contribution by Telecel Zimbabwe to the national fiscus since inception and especially over the past difficult years.”
“To our current and future subscribers, your network of choice is working hard to guarantee you uninterrupted, robust and nationwide connectivity. I believe once the this issue is sorted out conclusively, both shareholders and Telecel management will have more focus on what needs to be done to ensure the organization is taken to the next level,” said Dr Makamba.
In spite of the problems caused by this protracted issue, Telecel has been able to hold its own in the market and has fashioned out its identity based on providing value and delivering on its service promises to its subscribers. It has revolutionised the market through its new offers and new ways of extracting value and passing this back to its customers.
The organisation has contributed immensely to the Schools Program where it has assisted numerous schools countrywide to rebuild run-down infrastructure, providing sports equipment and adopting social welfare institutions including old peoples’ homes, the handicapped and other under-privileged people. Other key social investment programs have included contracting locals in many communities for base station security and social investment in arts and culture.
The shareholding dispute has also affected recent attempts to sell Telecel shares held by the foreign partner and rationalise long outstanding indigenisation issues which have lead the government to threaten to withdraw the company’s licensing agreement.
Issued on behalf of EMPOWERMENT CORPORATION (PRIVATE) LIMITED
Dr. J C Makamba
Empowerment Corporation (Private) Limited
161 Josiah Chinamano Avenue Harare