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Meikles challenges assets sale

Martin Kadzere Senior Business Reporter
MEIKLES Limited has appealed to the sheriff for the confirmation of sale of assets belonging to its subsidiaries, Tanganda Tea Company and Meikles Hospitality. This follows the auctioning of some of the assets related to Meikles’ investments in Tanganda and Meikles Hospitality to recover $1,4 million owed to a local consultancy firm, Core Solutions.

The Zimbabwe Stock Exchange firm had contracted the firm to recover — on its behalf — the money it was owed by Government.

The payment for consultancy, in terms of the agreement between Meikles and Core Solutions, was due on December 6, 2015, but the latter did not pay, leading to an arbitration.

Meikles lost the case and was directed to pay about $1,4 million. This was upheld by the High, Supreme and Constitutional Courts after Meikles challenged the arbitration award.

The auction was conducted on December 24 last year and realised about $2,8 million.

However, Meikles has challenged the sale of the assets on the grounds that it was improperly conducted while the shares were sold for a low price. It is also arguing the shares were sold for more than the amount required to satisfy the debt while the property was not valued prior to the sale. Core Solutions is cited as first respondent while Murray Lynton-Edwards, the highest bidder is the second respondent.

Core Solutions has insisted the sale was properly conducted and the assets were sold at the market based price. It said the property was sold to satisfy the principal debt, interests and other fees while none of the bidders raised complaints.

Meikles’s application of appeal was done in terms of Order 40 Rule 359 (1), and (3) of the High Court.

“It is averred that the property belonging to the applicant was for an unreasonably low price,” says Meikles in its application, which was filed on January 4.

“The price that the auctioneers accepted as the auction price is grossly unreasonable as it represents a tiny fraction of the value of the said property (assets).

“LM Auctioneers accepted a price of approximately $2,7 million for the applicant’s property whose immovable and business was valued at approximately $100 million.”

Meikles further argued that in a demonstration of the gross unreasonable bordering on malicious intent to affect the company’s business, the auctioneers sold the shares in Tanganda and Meikles Hospitality whose value were more than the debt.

“If indeed, the auctioneers and the first respondent were only interested in recovering the judgement debt, they would have not even sold a quarter of the shares in Tanganda.

“To further demonstrate the above point is the fact that Meikles Hospitality is a huge entity in that it has interests in Meikles Hotel as well as its building, Victoria Falls Hotel and shareholders in Mentor Africa Limited, a company which owns The Cape Grace Hotel in South Africa.

“As such, to sell both Tanganda, which own vast tea estates and Meikles Africa Hospitality just in attempt to recover $1,4 million is clearly a malicious act to totally change the shareholding of the companies by pushing out the applicant as shareholder.”

Meikles alleged the manner in which, the auction was conducted appeared as if it was a private treaty between Core Solutions and its own bidders of the company’s shares.

It said the actions were tantamount to fraud and the matter would be reported to police.

On the valuations of the shares, Meikles argues the shares were not valuated prior to the sale.

“This is cemented by the fact that when the applicant’s lawyers, through one Tapiwa Mukandi inquired about the issue from Ms G Siwardi, he was advised that the valuation relied upon your office was the real time value of the shares of the applicant on the Zimbabwe Stock Exchange. However, it is only the shares belonging to the public in the applicant which are traded on the ZSE,” said Meikles.

Yesterday, Meikles issued a statement advising shareholders it had taken necessary measures to “ensure company assets are safe and shareholder value is protected”.

Meikles claimed the matter was being contested at Supreme Court, an allegation denied by Core Solutions.

In response to Meikles statement, Core Solutions accused Meikles of being “economical with the truth” and misleading stakeholders.

“We have deemed it fit to correct the narrative,” it said.

“It’s an outright lie that Meikles has appealed to the Supreme Court contesting the auction. The auction, which was done, is not being contested in the Supreme Court. Meikles lost an appeal to stop this. It is also ridiculous and technically incorrect to state that Meikles has appealed the Arbitral Award in the High Court where the registration was done.

“The reality of the situation is that Meikles through its chairman (Mr John Moxon) incurred a cost they have failed to settle over three years through intransigence with apparent racist undertones reminiscent of the past fights with other black persons. After losing in Arbitration Court, High Court, Supreme Court and Constitutional Court under different Judges, Meikles has not only abused our justice delivery system but stressed out an indigenous business and aggravated this by impugning the reputation of Judges through baseless conflict of interest and an apparent narrative to suggest our chairman Dr (Joseph) Kanyekanye could have influenced their court losses.

“It is instructive for stakeholders to note that the first attachment of Meikles was on bank accounts at FBC and Stanbic banks who did not co-operate with the Sheriff. These cases have been reported to ZRP.

“This forced thereon an attachment of shares as Meikles apparently does not

own any movable assets to include their office furniture.

“This attachment was done in August 2018 and true to their character, Meikles launched court action to stop a properly advertised auction up to the eve of the auction which they lost again.

“A normal fiduciary would have paid to avoid sale of Meikles assets that were in peril.

“The auction did take place and two of the bidders were Mr John Moxon’s son, Mathew Moxon (a lowly divisional manager in Meikles group ostensibly representing Meikles) and Mr Murray Lynton-Edwards, reported to be married to the Meikles family.

“We ask Meikles shareholders including stakeholders to look at this and perhaps reflect on the apparent conflict of interest.

“Is this not an orchestrated corporate heist by insiders in Meikles? Is it logical for a firm that has paid a dividend to put its silverware in jeopardy because of a small debt owed to an indigenous business?

“The narrative being peddled in the media so far is a reflection of apparent arrogance and corporate bullying tactics by Meikles to intimidate a small indigenous business.

“We believe it to be immoral to avoid paying debts that are due especially after exhausting the judicial process. We also strongly object to entities that are apparent beneficiaries of historical looting abusing our institutions especially those of justice to paint any black man who succeeds against Meikles or rules against them as corrupt.”

Source : The Herald

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