Telecel Shareholders Disagree Over Zimbabwe Listing

Members of Zimbabwe's Empowerment Corporation (EC) consortium, which holds a 40% stake in mobile operator Telecel Zimbabwe, have denied reports that they agreed with proposals from the cellco's 60% owner Telecel International to list an 11% stake on the local stock market. State-backed newspaper The Herald reports that Telecel International, a holding company owned by Egypt's Orascom Telecom, claimed it had agreed with EC to float the shares on the Zimbabwean bourse to reduce the foreign-held shareholding to 49% in compliance with ‘empowerment and indigenisation' laws and telecoms regulations, but several EC members wrote to Transport, Communications & Infrastructure Development Minister Nicholas Goche and Youth Development, Indigenisation & Empowerment Minister Saviour Kasukuwere denying any involvement in the proposal. Venturas and Samukange, lawyers representing Dr Jane Mutasa, head of the Indigenous Business Women's Organisation, a 17% shareholder in EC, issued a statement saying: ‘It has been brought to our attention that Telecel Zimbabwe has placed a notice in local newspapers alleging that an agreement has been made between shareholders of Empowerment Corporation and Telecel Zimbabwe ... That statement is false. There is no such agreement between the shareholders and in particular Dr Jane Mutasa.’ The lawyers added that Mutasa had not participated in any negotiations related to the planned divestment since 18 March, and asserted that any discussions and agreements entered into without her participation were ‘null and void.’

‘Our client denies participating in the alleged proposal to have the company listed on the local stock exchange. Our client has not participated in the [proposed] alleged issuing of new [Telecel Zimbabwe] shares,’ the statement continued.

Telecel Zimbabwe is owned by Orascom Telecom’s Telecel Globe division (60%, registered to Telecel International), and EC (40%), itself comprising Kestrel (23%), IEG (18%), Indigenous Business Women's Organisation (17%), National Miners' Association (14%), Zimbabwe Farmers' Union (14%) and Magamba eChimurenga (14%). EC was originally given pre-emptive rights to acquire an 11% stake from Telecel International by the government.

The state gave Telecel a deadline of 30 June 2007 to comply with ownership rules; after failing to meet the conditions – largely because of the hyperinflation that paralysed Zimbabwe’s economy – the cellco has technically been operating without a valid licence ever since.