Deloitte & Touche quit as Econet auditors

DELOITTE and Touche have resigned as auditors of Econet Wireless, seven months after their reputation took major knocks over the way they handled a ballot poll of the company, which miffed some minority shareholders.

While no explanation was given for their action, Deloitte and Touche seem to have lost the favour of some Econet shareholders following allegations that they helped rig a poll during an extraordinary general meeting of the company.

In a statement Econet said the auditors had tendered their resignation and the group would seek shareholder consent to engage new auditors. “Members are advised that Deloitte and Touche tendered their resignation as auditors of the company.

“In terms of section 150 (2) of the Companies Act (chapter 24:03) the company is proposing the appointment of Ernst and Young as auditors of the company,” said Econet.

A meeting of shareholders to consider the resolution to appoint Ernst and Young the new auditors for Econet will be held at the end of this month.

The contentious resolution was one in which directors sought shareholder approval to enter into an agreement with Econet Wireless Global based in South Africa for the supply of equipment for network expansion. EWG, which shareholders alleged was controlled by Mr Strive Masiyiwa, also a controlling shareholder in Econet Wireless Holdings, had agreed to supply the group with the equipment for its local mobile subsidiary. Ownership of the equipment was to pass on to Econet Wireless Zimbabwe upon delivery and payment of the first installment of US$21 828 178.

There were sharp differences among the shareholders over the resolutions, including a proposal for the issuance of shares that would be used to combat Cholera, resulting in a ballot poll being called, which Deloitte handled. All the three resolutions that Econet had proposed passed, but there were strong objections from minority shareholders that claimed irregularities in the manner in which Deloitte had conducted the ballot poll. One such shareholder was Old Mutual, whose 17 420 408 shares were excluded from voting

Econet Wireless chairman Tawanda Nyambirai said Old Mutual had not sought and got the approval of some of the shareholders they claimed to represent as provided for in the company’s articles of association.