eBusiness Weekly
Martin Kadzere
City businessman, Dr Douglas Mamvura, sold his shareholding in Premier Finance Group (PFG) in 2010 following the release of security he had offered for a loan secured from BancABC, which he together with business partners then, George Manyere and Walter Kambwanji, used to buy 28 percent in the financial services group, it has been established.
The revelation comes after Dr Mamvura recently wrote a letter demanding about US$4 million from Manyere and Kambwanji from proceeds of the sale of Ecobank shares in 2015.
The transaction was valued at US$12,5 million.
It has, however, emerged that Dr Mamvura was bought out of PFG in 2010 in a transaction that involved the settlement of his liabilities in respect of the loan advanced to him to buy the shares in PFG, which was partly paid off and the securities he had pledged as collateral being released to him.
The circumstances
Through Brainwork Investments, the three bought 28 percent of PFG from investment vehicles, which were owned by businessman, Exodus Makumbe in April 2009 and the transaction was financed by African Banking Corporation, now BancABC. The trio pledged the shares they had acquired and properties as security.
Dr Mamvura owned 25 percent of Brainwork Investments, which was a 9 percent effective shareholding in PFG, through his vehicle, Inspirational Marketing Services.
Douglas Mamvura
The balance was owned by Manyere and Kambwanji; 9,5 percent apiece being effective shareholding in the financial services group, this publication has established.
After the transaction, Manyere became group chief executive of PFG; Kambwanji the chief finance officer while Dr Mamvura was appointed managing director of Premier Banking Corporation, a subsidiary of PFG. The group also owned an asset management firm.
Manyere stepped down from the CEO position of PFG and remained as a shareholder two months after acquiring the shareholding due to poor working relationship between the parties and was replaced by Peter Wood. Dr Mamvura remained as the managing director of the bank. In September 2009, Kambwanji also stepped down as PFG chief financial officer but remained as a shareholder.
In December 2009, Manyere and Kambwanji returned to PFG in partnership with German investment firm, Africa Development Corporation (ADC) and Mauritius based investment firm, KMQ Enterprises and bought an additional 45 percent and 9 percent respectively from other PFG shareholders.
The coming in of ADC and KMQ with a combined 54 percent shareholding of PFG alongside the Consortium’s 28 percent meant that they now controlled 82 percent.
This resulted in a management shake-up that saw Dr Mamvura being removed as the managing director of Premier Banking Corporation and being reassigned to a new role as marketing director.
Len Steffen, a Dutch national, was appointed the managing director of Premier Banking Corporation, while Manyere bounced back into management and was appointed executive director-corporate & investment banking.
Kambwanji was reappointed as the CFO while Dr Mamvura turned down his new offer as marketing director and was retrenched from PFG and its subsidiaries.
He was paid a package of US$410 000 that he accepted.
The payout was made up of US$165 000 the total of his earnings to the end of his contract, an option to buy his company vehicle, a Jeep Cherokee for about US$45 000 and a loan of US$200 000 at a concessionary rate.
Premier Banking Corporation also agreed to payout his pension contribution.
Simultaneous with his exit and retrenchment, Dr Mamvura also requested that he be bought out of his 9 percent effective shareholding in PFG and this was agreed to by Manyere and Kambwanji.
The buyout was agreed to be done through the release of Dr Mamvura’s security and personal guarantees at BancABC against the loan facility that had previously financed the purchase of PFG shares by the consortium. This was achieved and implemented through a Deed of Settlement which was entered into between BancABC, Brainwork Investments, and Ecobank Transnational Incorporated (ETI) in September 2010.
The Deed of Settlement was part of ETI’s acquisition of 70 percent shareholding in PFG through an injection of US$10 million in new capital. The ETI transaction was approved by the Reserve Bank of Zimbabwe and Dr Mamvura’s securities held by BancABC were released and ceased to be a shareholder of PFG or a member of the consortium.
“The deed of settlement was the mechanism that was used to buy out Mamvura because BancABC insisted to be paid down on its loan obligation due from the consortium, which was now in excess of US$4 million,” said a source familiar with the transaction.
This publication has also independently verified this.
“The settlement saw Dr Mamvura’s securities and personal guarantees being released and all his liabilities under the BancABC loan which was in aggregate in excess of US$4 million being inherited by Mr Manyere and Mr Kambwanji,” another source said.
Furthermore, the ETI transaction diluted the shares that Manyere and Kambwanji remained with after Dr Mamvura’s exit to 8,4 percent from 28 percent.
The value of 100 percent of PFG prior to the ETI transaction was around US$3 million.
In February 2011, Manyere and Kambwanji co-founded Brainworks Capital, which then acquired 100 percent of Brainwork Investments and its subsidiaries or affiliates which held shares in PFG and as a result, Brainworks Capital became the 8,4 percent shareholder in PFG, which was now rebranded Ecobank Zimbabwe.
In December 2011, Brainworks Capital increased its shareholding in Ecobank Zimbabwe by acquiring shares held by ADC, which had now been diluted to 13,5 percent and this was done through a share swap. Brainworks Capital further acquired other minority shareholders in Ecobank for cash and ended up with a shareholding of around 29 percent by end of December 2011.
In 2012, Ecobank raised US$15 million through a rights offer and Brainworks Capital followed its rights by injecting US$4,2 million and maintained its 29 percent shareholding.
Brainworks Capital subsequently sold its total shares in Ecobank Zimbabwe of 28 percent for US$12,5 million in 2015.
Despite the above information, Dr Mamvura claims he never ceased to be a shareholder and hence he is claiming US$4 million from Manyere and Kambwanji, which he purports is his share of US$12,5 million realised from the sale of 29 percent held in Ecobank.
However, in a letter dated June, 30, 2010, written to then BancABC managing director, Hashmon Matemera, Dr Mamvura confirmed he had sold his 25 percent shareholding in Brainwork Investments (9 percent effective shareholding in PFG) to Zahra Trust Investments, a vehicle owned by Manyere and Kambwanji.
He demanded the expedition of the release of the securities he had pledged as collateral.
“I refer to the letter written to you by George Manyere on 30 April regarding the above matter to which you responded on 10 May 2010 acknowledging the shareholding changes,” said Dr Mamvura.
“Mr Manyere indicated in the letter that as of April 2010, I sold my shares held by Inspirational Marketing Services equivalent to 25 percent on Brainworks to Zahra Trust Investment represented by Messrs George Manyere and Walter Kambwanji as purchasers.
“The said letter indicated that I had sold my interests in Brainworks on condition that Zahra Trust Investments took over all my liabilities with BancABC under facility letter A898 granted to Brainworks.
“I am concerned that over the last two months, nothing concrete has been forthcoming from you in terms of the release of securities pledged.
“I would be grateful if you could advise when the internal process will be completed and when the securities would be ready for collection.
‘‘However, should there be any compelling reason why the bank is taking this long, I would appreciate your urgent feedback in this regard.”
However, BancABC wanted Brainworks Investment to repay part of the loan before releasing Dr Mamvura’s securities and this was achieved through the ETI transaction Deed of Settlement.
In an interview on Wednesday, Dr Mamvura said while Manyere and Kambwanji had the first right of refusal to buy his shares, they failed to pay. He said he had taken the matter to the court and any further comments would be subjudice
Calls seeking comment from his lawyer Advocate Tinashe Tanyanyiwa, were not answered.
Manyere said the sale of shares in Ecobank Zimbabwe for US$12,5 million, was executed and completed in 2015 by Brainworks Capital, which was the holder of the shares in Ecobank.
He said this was done five years after “we had bought out Dr Mamvura from his shareholding in PFG.”
“Douglas Mamvura sold his shares as we had agreed and consideration was against the release of his security by BancABC.
“I and Walter took over the portion of his liabilities at BancABC, which we successfully paid off in or around 2014. The deed of settlement, which was entered into in September 2010 brought the matter to finality, and all his security and personal guarantees were released to him by BancABC and he knows all this happened,” said Manyere.
