Zimbabwe News and Internet Radio

Nicholas Van Hoog escalates war over land deal

By Shame Makoshori

Controversial British tycoon, Nicholas van Hoogstraten, has demanded a second CFI Holdings Limited extraordinary general meeting (EGM) to force the reversal of the sale two years ago of the sprawling Langford Estates to Fidelity Life in a US$18 million deal, which had been sanctioned by shareholders.
Van Hoogstraten wants the EGM held on July 14.

Nicholas van Hoogstraten
Nicholas van Hoogstraten

Zimbabwe’s Companies Act allows shareholders with at least five percent shareholding to requisition a company to hold an EGM to vote on any special matters.

The transaction, involving 834 hectares of prime land about 15 kilometres south west of Harare, helped unlock funding to retire CFI’s debts.

CFI has failed to access appropriately priced and structured capital since dollarisation in 2009.

This capital was vital for repairing its seriously damaged business, which had been teetering on the brink of insolvency.

Shareholders approved the deal in October 2015.

However, through his investments vehicle, Messina Investments, which at the time held about 24 percent shareholding in the listed agro-counter, van Hoogstraten raised the red flag and approached regulators to investigate the transaction, which he said was fraudulent.

Following fresh acquisitions since the 2015 shareholder vote, Messina has raised its stake in CFI to over 40 percent.

The tycoon, who holds shareholdings in a range of listed firms intertwined with government stakes, says in his requisition notice that is due to be published in a few weeks that key shareholder, Zimre Holdings Limited “had a common director sitting on the CFI board, the Fidelity and National Social Security Authority (NSSA) boards”.

Zimre and NSSA are substantial shareholders in Fidelity and Messina claims that the 2015 circular did not reveal that the life assurer was a related party.

It also claims that the circular was “misleading and dishonest” in that shareholders were not told that the “independent property valuation” of Langford was prepared for FBC Bank, also “a conflicted and related party to NSSA and Fidelity”.

The Messina notice claims that the market value of Langford Estates, which it estimates at about US$40 million, was significantly understated at US$18 million.

In the notice dispatched to CFI shareholders and obtained by the Financial Gazette, the tycoon urged shareholders to vote against the transaction.

This would force CFI to repossess the 834 hectare estate, where Fidelity is already developing a housing project.

“Messina and other shareholders, together holding over 40 percent of the CFI shares, will be voting against the resolutions and would urge all other shareholders to also vote against the resolutions,” Messina says.

“The recent history of the previous attempt to illegally dispose of the Langford Estates land arose out of the corruption of former management and the incompetence of former directors at CFI who had, since at least 2009, and probably earlier, been responsible for bringing this once great company to its knees at the expense of long suffering shareholders who, other than Zimre and NSSA, had no representation on the board. Financial Gazette