Econet to offload Afre, Rainbow shares

misdemeanours unearthed at Afre, which prompted Government intervention.
But Econet is yet to decide the fate of its partnership with Afre, under which the two firms offer mobile phone-based life assurance cover, EcoLife.
The largest mobile phone operator said it was on the market seeking willing buyers for its 19 percent stake in Afre and 9 percent in RTG.
Econet directors recently seconded to the Afre board resigned in protest over what they called excessive interference by the Ministry of Finance.
The directors included Ms Tracy Mpofu, Mr John Gould, Mr Chris Chirairo, Mr Douglas Mboweni and Mr Ricky Mapani.
Finance Minister Tendai Biti last week suspended trade in RTG and Afre shares and ordered the Commissioner of Insurance to probe Afre and its subsidiaries.
This was after Reserve Bank of Zimbabwe investigations at Renaissance Financial Holdings revealed that the financial group and associate firms had dabbled in irregular inter-company transactions.
Econet Wireless chairman Mr Tawanda Nyambirai yesterday confirmed the group had decided to exit the two firms.
“Nothing has changed – we are on the market selling our shareholding to exit (Afre). We are also selling our shareholding (in RTG),” said Mr Nyambirai.
The developments have their roots in a US$5 million loan extended by businessman Mr Jayesh Shah to ex-chairman of Afre and RTG Mr Patterson Timba.
Mr Timba and Shah fell out after the latter demanded additional payment, claiming Renaissance had grown in value after the loan he had given to its founder.
When Shah’s claim for an additional US$12 million was disputed he allegedly told the RBZ that RFHL used depositors’ funds to repay its loans.
The investigations by RBZ unearthed irregular shareholding structures, board and management functions and unlawful inter-company transactions.
Econet’s decision to divest follow claims the firm had attempted a hostile takeover of Afre and RTG, which it has vehemently denied.
“The reason for our intervention (at Afre) was to protect our 1,6 million subscribers and ensure stability. We did not want a situation where they would go and not get paid. We had no plans to amass or increase shareholding,” said Mr Nyambirai.
“We stick to our board decision to exit non-core business. Ask Mr Timba – we even offered him to buy us out (of Afre).
“That (US$3 million loan to Afre) had nothing to do with increasing our shareholding.”
He said Econet had demanded three additional members on the Afre board, one of which would be the chairperson, as a condition for the loan.
The Econet chairman also dismissed claims his company sought to increase its Afre stake by agreeing to underwrite the insurance firm’s US$10 million rights offer.
The company said it would underwrite the capital-raising scheme, seeing that there was a liquidity crisis in the economy and it is a liquid company.
Rumours that Econet wanted a stake in RTG were fuelled by reports the former wanted to buy the National Social Security Authority’s stake in the hotel group.