adminshareholders’ approval for a funding initiative largely meant to address financial requirements of subsidiary units of the insurance group.
The intention is noble, but it would appear to be a hidden agenda by stakeholders, they are pushing for a combined annual general and an extraordinary general meeting.
Analysts have described the proposal for a US$15 million rights offer to recapitalise Afre as a sign of “moral decadence” at the group.
They see a relationship between the characters pushing the recapitalisation “gospel”.
Questions have arisen over whose interests are being advanced when the 19-percent shareholder – Econet Wireless – is pushing for meetings to approve resolutions that appear to largely benefit itself under the guise of closing holes created by irregular inter-party transactions.
Econet happens to chair the Afre board,
The disregard for obvious good corporate governance systems exposed the apparent existence of conflict of interest issues around Afre chairman Mr Tawanda Nyambirai, Econet and TN Bank.
Mr Nyambirai is also chief executive of TN Financial Holdings, the parent firm of the group’s flagship unit, TN Bank.
The banking unit has undertaken to underwrite Afre Corporation’s US$15 million rights issue.
Some analysts contend Econet extended the funding for underwriting.
Admittedly, Afre requires fresh capital injection after the exposure it suffered from inter-company transactions rooted in the alleged financial shenanigans at Renaissance Financial Holdings.
But what raises eyebrows is this: Whose interests will have been advanced after the AGM and EGM have been executed, if viewed in terms of the ability of all interested parties to influence events?
Regulatory authorities have also criticised the idea by the shareholders going ahead with the meetings to save policyholders investments and to protect the company’s minority shareholders.
The ZSE noted that regulatory authorities were demanding the completion of full investigations into the company’s subsidiaries before the shareholders convened.
Company sources said corporate governance systems were flouted as some board members due for retirement were seeking re-election. They were said to be working together with some major shareholders.
Econet Wireless and TN Financial Holdings, now at the centre of the alleged breach of good governance practice, have been asked to explain possible conflict of interest.
Regulators have also raised issues relative to recommended corporate governance approach to instances where possible conflict of interest may exist.
Online Reporter