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Savanhu are at each other’s throat over the company’s pending annual general meeting.
The minister insists the meeting, scheduled for next week, should proceed. The chairman wants it postponed. Among other items on the agenda, the meeting will seek to remove Mr Savanhu and nine other directors from the board. This comes almost four weeks after a similar meeting was adjourned to provide shareholders with more time to restructure the board.
At the June 30 meeting, Govern-ment representative Mr Valentine Vera and British business tycoon Mr Nick van Hoogstraten agreed that the meeting be adjourned.
Government owns about 38 percent stake in Hwange. Mr van Hoogstraten owns just over 30 percent.
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Mr Savanhu is defying the Govern-ment and has continued flighting adverts in the newspapers ordering the cancellation of the meeting.
“Shareholders are hereby advised to disregard the notice for an AGM published in the print media,” said Mr Savanhu. “The notice was not ordered by the board. Accordingly, the notice calling for an AGM on August 3 2011 is unlawful . . . and should be ignored.”
As revealed by this newspaper earlier, the resolution to cancel the AGM was made at a “kangaroo” meeting attended by only four directors.
Minister Mpofu, whose ministry represents Government interests in Hwange, said the meeting was of no effect as he had instructed the board that, pending removal of directors, no meeting should be convened.
In a strongly worded letter to Mr Savanhu, Minister Mpofu said the AGM was for shareholders and insisted it would proceed as scheduled.
“It has come to my attention that on July 22, 2011, you held a board meeting disregarding my instruction where at you supposedly resolved that the notice for the annual general meeting of the company scheduled for August 3, 2011 be retracted,” said the minister.
“The instruction from the Govern-ment of Zimbabwe, in agreement with other major shareholders is that the annual general meeting, as postponed by the shareholders of June 30, 2011, is to proceed as scheduled. Please note that this is a statutory shareholders’ meeting and not a directors’ meeting,” said Minister Mpofu.
“In light of the Government’s and other major shareholders instruction, the board meeting you conducted on July 22, (and) any (other) meeting you may wish to hold, are null and void and of no force or effect.
“Further and pending the holding of the AGM, the directors of Hwange should not conduct directly or indirectly, (any) business (involving) the company.”
Mr Savanhu, through his lawyer Mr Gerald Mlotshwa, said the annual general meeting should have been held seven days after the adjournment of the July 30 meeting.
“It is pertinently evident that the intended AGM date extends beyond the seven days statutory timeframe, and for that very reason alone, the notice (of the August 3 meeting) is defective. It is invalid, unlawful and of no force or effect,” said Mr Mlotshwa.
“With respect, the Honourable Minister has no authority to issue any instruction to the management or board of HCCL, in particular the company secretary or the managing director with respect to business of the company and whether or not board meetings should be held.”
Mr Savanhu maintained that the board meeting held on July 22 where the resolution to cancel the AGM was made vas “lawful, proper and enforceable”.
“We will continue to hold such meetings in the lawful discharge of our duties and obligations as directors of HCCL. If any shareholder is unhappy with the manner in which this is done it is open to such shareholder to institute the necessary, and lawful, procedures for removal of such director, or directors from the board,” said Mr Savanhu.
Unnamed legal experts, however, said it was beyond the board’s jurisdiction to cancel the meeting.
Mr Savanhu was elected as a non-executive chairman of Hwange in 2006.
Hwange Colliery, the heavily capitalised mining counter on the Zimbabwe Stock Exchange, is considered to have world-class coal deposits.
A full recapitalisation of US$175 million is required. It is apparent the Government does not have money to inject into the business, neither does it want to be diluted while Mr van Hoogstraten in unlikely to do it alone.
This means Hwange will have to look for other capital-raising initiatives. But with the discord between the shareholders and directors, the company may find it difficult to raise money due to perceived risk.
Online Reporter