Van Hoog in potentially explosive EGM

Published: 17 October 2017

Agri-industrial concern CFI Holdings will next month hold an extraordinary general meeting (EGM) to vote against the disposal table the alleged fraudulent disposal of the Langford Estates land, which was sold to the insurance firm, Fidelity Life Holdings.

Fidelity acquired Langford in a land for debt swap deal, which the insurance firm intends to develop into a residential.

However, in a notice to shareholders, CFI shareholders Willoughby Investments Private, who with other shareholders control 40 percent stake in CFI are pushing for a reversal of the Langford Estate deal alleging it was done fraudulently.

The notice to shareholder indicates the deal was a related parties transaction.

According to the circular to shareholders, ZIMRE, the parent company for Fidelity and the National Social Security Authority (NSSA) were not permitted to vote on the resolutions with regards to the sale of the piece of land in question.

In addition to that, it is alleged a circular to shareholders was misleading and dishonest in that shareholders were not told the independent property valuator of the land was prepared for FBC Bank which was also "conflicted and related party" to NSSA and Fidelity.

It was also not stated to shareholders that Fidelity, who purchased the land was a related party as defined by the Zimbabwe Stock Exchange (ZSE).

"The fact that the transaction was illegal and involved "related parties", who were conflicted, did not come to the notice of Willoughby's until June 2016 when it was first raised with CFI and later reported to the ZSE and the Securities Exchange Commission of Zimbabwe.

"Willoughby's and other shareholders, together holding over 40 percent of the CFI shares, will be voting against resolutions one and two and would urge other shareholders to also vote against the resolutions," reads part of the notice to shareholders.

It is further alleged the attempts to illegally dispose of the Langford Estates started as late as 2009 pushed by corrupt activities of former management and directors.

"Furthermore, at all times of this fraudulent Zimre had a common director sitting on the boards of ZIMRE, CFI and Fidelity, and NSSA, were substantial shareholders in all three companies."
- bh24

Tags: CFI,