Langford deal haunts CFI
MESSINA Investments, an investment vehicle controlled by British born multimillionaire Nicholas van Hoogstraten, has revived its demand for the reversal of the disposal of large swathes of prime land by CFI Holdings five years ago.
In 2015, CFI Holdings Limited disposed of its 81 percent stake in the 834-hectare Langford Estates near Harare, to Fidelity Life Assurance Company of Zimbabwe, which took over the company’s $18 million debt.
The transaction has been under the spotlight since then, with Messina — an 18,5 percent shareholder in CFI — raising conflict of interest issues with some shareholders who voted during a September 2015 Extraordinary General Meeting (EGM) to approve the deal.
“Notwithstanding the above legal matters, on 17 January 2020, Messina wrote to the company requisitioning an EGM seeking shareholder approval for the setting aside of the resolutions of 16 October 2015 and the ratification of the board’s legal action to reverse the disposal of the 81 percent equity stake in Langford,” CFI said in a circular to shareholders.
CFI said it had sought legal opinion which had indicated that the disposal involved related parties, which violated Zimbabwe Stock Exchange listed requirements.
“Furthermore, it was not disclosed that one of the Stalap Investments/Zimre Holdings Limited nominated directors, Mr (Timothy) Nyika, sat on the board of directors of Zimre, CFI and Fidelity,” CFI’s circular noted.
“The resolution passed on 16 October 2015 did not in actuality; ratify the sale shares agreement as the resolutions specifically made reference to the disposal of 81 percent of Langford for a total consideration of US$18 million and no other sum. Whereas the sale of shares agreement stated the purchase price of the transaction at US$16 487 913,” CFI said.
Van Hoogstraten claimed in his letters that there was conflict of interest in the deal after Zimre, which holds shareholding in both Fidelity and CFI, voted at the EGM to approve the Longford deal.
He said the National Social Security Authority (NSSA) was also in conflict of interest when it cast its vote at the EGM.
Messina also argued at the time that there were no full disclosures to the Zimbabwe Stock Exchange on which Fidelity, Zimre and CFI are listed, when the deal was sealed.
The tycoon’s combined shareholding in CFI through several investment vehicles and nominees is over 40 percent.
Fidelity was seeking to expand its land bank in Harare, where it has been undertaking substantial housing developments.