Timothy
Business Writer
Local businessman, Fredrick Mutanda, has said the acquisition of his shareholding in pharmaceutical giant, CAPS Manufacturing and CAPS Healthcare by Government, can no-longer be regarded as binding and the parties should return to the status quo ante.
In the arbitration process between the Government and CAPS Pharmaceutical Trust (CPT), the government argued that it had acquired 67,52 percent of the company’s shares following a shareholders’ agreement made with Fred Mutanda Family Trust in 2016.
However, in a letter dated January 17, 2022 to Industry and Commerce Minister Sekai Nzenza, Mutanda said the government should now unconditionally comply with the agreement of 11 November 2015, settle delictual claim agreement of 28 December 2015, and return immovable properties misappropriated by former CAPS executives, pay reparations for extra judicial seizure and destruction of “my” assets.
“It must do so promptly and fully. If not, to that end, I demand and direct that, Government forthwith –Sign all share transfer forms for the shareholding that the Government purportedly holds in CAPS Manufacturing Limited and CAPS Healthcare Limited. Regularise any changes made to the records of St Anne’s Hospital Limited, QV Pharmacies (Private) Limited, Autosterile (Private) Limited and CAPS (Private) Limited,” reads part of the letter.
Mutanda added that the government should also hand over letters of resignation by all directors and management that it appointed in CAPS Manufacturing Limited, CAPS Healthcare Limited and St Anne’s.
Government, according to Mutanda should also facilitate a smooth hand over of management, assets, and control from Government of Zimbabwe management to representatives of CAPS Holdings Limited shareholders companies such as CAPS Manufacturing Limited, CAPS Healthcare Limited, St Anne’s Hospital Limited, QV Pharmacies (Private) Limited, Autosterile (Private) Limited and CAPS (Private) Limited.
According to Mutanda, the Government should comply with his demands set out above by no later than close of business on Wednesday 19 January 2022, failing which he shall proceed to assert his rights without further notice.
However, Business Weekly could not establish whether Government had responded or not to Mutanda’s demands by the time of publication.
Mutanda said on 11 November 2015, the RBZ was once again directed by Government to acquire “CAPS Holdings” and on 13 November 2015, accepted the Government of Zimbabwe offer through a letter addressed to him by the Governor of the Reserve Bank, dated 11 November 2015, for the acquisition of his family shareholding in CAPS Healthcare and CAPS Manufacturing.
Government, through a letter by the Governor of the Reserve Bank dated 28 December 2015, agreed to settle the delictual claim of US$25 million.
“…on 20 February 2020, I wrote to the Reserve Bank cancelling the Sale and Purchase of Shares Agreement. I proceeded to restitute the sum of twenty million dollars, which had been paid as the purchase price,” he said.
Through the Ministry of Industry and Commerce, the Government in 2019 made the appointment of five board members.
CAPS Pharmaceutical Trust (CPT) objected to the appointments claiming to be the firm’s majority shareholder with the right to make such appointments.
The CPT claimed to have a controlling stake of 51 percent in CAPS, but Government by virtue of a sale of shares agreement between the Government and the Fred Mutanda Family Trust, averred it had acquired a 67.52 percent shareholding and was thus entitled to appoint directors.
Seasoned arbitrator and retired Supreme Court judge, Justice Ahmed Ebrahim, presided over the arbitration which was fiercely contested and ruled in favour of the Minister.
In his ruling, Justice Ebrahim noted that CAPS (Pvt) Ltd, following the Mutanda agreement, became a “public entity” as defined in the Act, being a subsidiary of CAPS Manufacturing (Pvt) Ltd and it’s operations are “substantially controlled by the State or by a person on behalf of the State, whether through ownership of a majority of shares in the entity or otherwise”.
In the same year, the CPT approached the High Court and obtained an order to suspend the appointment of five CAPS Private Limited (CAPS) board members by the Ministry of Industry and Commerce claiming to be the firm’s majority shareholder and objecting to the minister’s move.
Industry and Commerce Minister Nzenza in November last year appointed pharmaceutical quality assurance specialist Ian Matondo as the CAPS’ board chairperson, while the other members were Tapiwa Mashingaidze, Sinikiwe Gwatidzo, Arthur Manase and Bothwell Nyajeka.
The appointment triggered the legal battle which spilled into Arbitration.
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