Zimbabwe: NSSA Spites Nicholas Van Hoogstraten

THE National Social Security Authority (NSSA) has sold its entire stake in troubled conglomerate, CFI Holdings, to ZimRe Holdings, effectively handing control of the company to the Rudlands brothers.

This is likely to subdue vocal shareholder, Nicholas van Hoogstraten, the British tycoon who has controversially fought against Simon and Hamish Rudland, who indirectly hold a 28,22 percent stake in CFI through ZimRe.

ZimRe’s shareholding has therefore increased to 41 percent following the acquisition of NSSA’s 12,93 percent stake in CFI.

The transaction, which went through on Tuesday, was valued at US$1,4 million.

Van Hoogstraten, whose interest in CFI is held through various investment vehicles, is now the second largest shareholder with about 35 percent interest.

One of van Hoogstraten’s investment vehicles is the London-headquartered Messina Investments, which holds interests in several listed firms, including leisure outfit Rainbow Tourism Group (RTG) and the tri-listed coal producer, Hwange Colliery Company.

NSSA board chairperson, Robin Vela, confirmed the disposal of CFI shares, saying this was a strategic transaction carried out in line with the authority’s new investment strategy.

“It is a strategic consolidation to ensure CFI has a single shareholder of reference and is able to proceed to appoint credible management and get an injection of the much needed capital. CFI has fallen behind its competitors who are operating at over 100 percent capacity because it has been hamstrung by shareholder issues. We look to break this deadlock not just in CFI but elsewhere,” Vela told the Financial Gazette.

CFI had been embroiled in shareholder disputes, which last year forced the departure of board chairman, Simplicius Chihambakwe, and chief executive officer (CEO), Steve Kuipa.

Van Hoogstraten had accused management of plundering the institution and had threatened to force the company into judicial management.

After the departure of Kuipa and Chihambakwe, the Rudlands and van Hoogstraten then agreed on compromise appointments representing their interests.

NicozDiamond Insurance managing director, Grace Muradzikwa, was appointed acting CFI board chairperson, while Timothy Nyika and Shingirai Chibhanguza were appointed acting group CEO and deputy CEO respectively. The first two represent the interests of the Rudlands and while Chibhanguza is van Hoogstraten’s proxy.

The Rudland brothers made what was described by analysts as a bold move to diversify their portfolio from the logistics market by announced their acquisition of CFI in 2005 through an acquisition of ZimRe Holdings shares.

The acquisition involved debt swaps, and debt takeovers. Investors have been coy to commit cash into a business that has been in perpetual turmoil.

While the deals have helped CFI manage its gearing, its balance sheet remains distressed and cash flow problems have remained challenging.

Currently, van Hoogstraten is disputing the disposal of land by CFI to Fidelity Life Assurance, a unit of ZimRe; he has approached authorities seeking a reversal of the US$18 million deal.

NSSA had supported the transaction, vowing to defend any legal action against the deal.

The ZSE and the Securities and Exchange Commission of Zimbabwe are yet to resolve a multi-million dollar dispute over Langford Estates.

Langford Estate was bought by Fidelity Life Assurance Company, the financial services outfit that is listed on the ZSE, from CFI Holdings.

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