Hwange board: A circus of impressions

essence of shareholding.
Gone are the days when shareholders or proxies will head to the Annual General Meetings with the hope of changing all the negatives, which might have dogged their organisation prior to their meeting.

Annual reports could tell a near story of the happenings in their entities. Most of the subjects normally discussed at the AGMs include adoption of financial statements, approval of directors’ remuneration, appointment of auditors and their remuneration and of late redenomination of share capital after the de facto dollarisation of the economy.
The quoted stocks are highly exposed to a narrow human resource base as one director could sit on several different boards without bringing much to the success and development of companies.

A host of companies remain culprits when it comes to adhering with corporate governance laws, they have been blatantly disregarding shareholder interests with most of the sitting directors turning AGMs into circuses of impressions.
The recent event at Hwange Colliery Company smacks of insincerity on the part of the directors.

Board chairman Tendai Savanhu and his whole board needs to be reminded that they are representing shareholders and it is the very same shareholders who can recall them for duty.
The argument that the company performed fairly well under their administration does not hold water as the switch to dollarisation was always a strategic period to which recovery at corporate level was expected regardless of who was at the helm.

It is the duty of the present Government as a major shareholder to set a precedent on corporate governance matters. As the company is struggling to recapitalise due to the liquidity crunch that is currently threatening economic recovery, the solution lies in reviewing the board and a bloated set-up as the one to be changed.
Government has a 37,1 percent stake in Hwange, followed by Mr Nick van Hoogstraten’s combined 26 percent stake. This is an opportune moment for the Government to be indicative of its upholding of corporate governance whilst at the same time preserving minority shareholders’ interests.

The Hwange board should have learnt from the last AGM, where they were officially recalled, that judicial channels do not have a space in shareholder meetings.
There is also Econet Wireless Holdings, besides having significant shareholding in banks, insurance companies and leisure industry, the blue chip counter remains a suspect when it comes to business ethics.

With over four million subscribers talking over their network, the giant continues ducking ethics as the quest to defend its investments in different quoted counters rages on. With a capital expenditure/earnings before interest, taxes, depreciation, and amortisation of 89 percent, a dividend per share of US$0,14 and a basic earnings per share of US$0,66, it will be so demoralising that such a market leader cannot set a standard inasfar as adherence to corporate governance is concerned.
The unconvincing involvement of Liquid Telecom in their 50 percent acquisition of Ecoweb leaves the market wondering about the shareholding structure of Econet business.

The position of Mr Tawanda Nyambirai as a chairman and legal advisor of Econet Group has set tongues wagging in corporate corridors.
The AGMs do come and go but the subject of conflict of interest remains an anathema.
Boardrooms now comprise attorneys who are paid to defend the ill-activities of their companies.

I recall vividly an incident at the Hwange AGM when Nick van Hoogstratens vehemently dismissed a minority shareholder’s views on a subject of interest.
His basis was the significant shareholding he holds in Hwange, which he believes, gives him an unassailable lead in decision-making at board level.

Delta continues being a shining example in terms of corporate governance as its chief executive Mr Joe Mutizwa remains a shining case study of how a company can be managed.
Despite being a monopoly, Delta remains ethical in its approach to business. It is the second largest taxpayer to the Government after Econet Wireless and has a potential to become number one.

The stepping down of Mr Robbie Mupawose as Delta chairman and the coming in of prominent Harare lawyer Mr Canaan Dube coincides well with the expected stepping down of Mr Joe Mutizwa at the current financial year. His charming characteristics resonated well with most analysts in the market as they naturally found favour in him. Mr Mutizwa opined that his team remained optimistic even

in the midst of challenges that he identified as VUCA, which is short for Volatility, Uncertainty, Complexity and Ambiguity.
Mr Savanhu should take a cue from the Delta scenario. He was at the helm of Hwange since 2006 and in all fairness he has had his chance and should make way for others as there is nothing sinister about him stepping down.

The inconsistency coming from both the Deputy Prime Minister Arthur Mutambara’s office and the Ministry of Mines concerning the postponement of the last AGM smacks confusion and despondency.
There is no basis for Mr Valentine Vera and the board chairman to give conflicting positions, we deserve better treatment as investors for continuous holding onto board positions can only scare away investors.

Thank you and God bless you.