The dispute between Government and CAPS Pharmaceuticals Trust (CPT) over CAPS Private Ltd shareholding has been referred for arbitration.
The dispute arose after Government, through the Ministry of Industry and Commerce appointed a new board of CAPS Private Limited, a move now being challenged by CPT on the basis that the former is only a minority shareholder in the company.
CPT, a consortium of pharmacists, claims to be the majority shareholder, directly owning a 51 percent shareholding in one of the largest pharmaceutical firms in the country with the remainder owned by CAPS Holdings.
The Government maintains that it owns 68 percent of CAPS Holdings, a claim which has been pestilently disputed by businessman Fred Mutanda.
Mutanda argues that while he entered into an agreement with the Reserve Bank of Zimbabwe, acting on behalf of the Government to dispose of his 68 percent around 2015, the shareholding was never paid for, leading to the cancellation of the agreement.
Last week, the High Court granted an interim relief order to stop the new board from carrying out any activities.
In its court application, CPT argued that the appointment of the board violated the shareholders agreement, which stipulates the rights of parties on the appointment and number of directors.
In addition, it also said this violates the Health Profession Act Chapter (27:19) which provides that the majority of directors in a pharmaceutical company must be registered pharmacists.
A senior official within the industry told The Sunday Mail Business that the matter has now been referred for arbitration.
“We hope the arbitration process will bring finality to this protracted matter,” said the official, who requested anonymity because he was not authorised to talk to the press.
“Calls made seeking comment from Industry and Commerce Minister Dr Sekai Nzenza were not answered.
In a letter to Mr Muchadeyi Masunda, the chairman of the Commercial Arbitration Centre, central bank governor Dr John Mangudya said he was agreeable to arbitration proceedings given his involvement in the transaction.
“Please be advised that the Reserve Bank of Zimbabwe is agreeable to the request from the Ministry of Industry and Commerce to be joined as party to the arbitration proceedings in its capacity as an agent of Government in the acquisition of shares which form the basis for the basis for the commercial disputes at hand,” said Dr Mangudya.
Last month Dr Nzenza announced a five-member board for the pharmaceutical firm as part of plans to turn around the company. Pharmaceutical quality assurance specialist Ian Matondo was appointed chairman of the new board, whose other members include Tapiwa Mashingaidze, Sinikiwe Gwatidzo, Arthur Manase and Bothwell Nyajeka.
Their appointment, which was approved by President Mnangagwa, was in line with the Public Entities and Corporate Governance Act [Chapter 10:31] and is effective November 4, 2020. The Sunday Mail
