EMBATTLED telecommunications company Valley Technologies was placed under final liquidation by the High Court, but the company’s ownership remains unclear after both Nigel Chanakira and Zachary Wazara disowned it in court.
ValleyTech, an Internet service provider, had its licence withdrawn by the Postal and Telecommunications Regulatory Authority of Zimbabwe after it failed to pay licence fees of $2,4 million. It was placed under final liquidation on November 13, but the liquidator, Winsley Militala, said the company had been stripped of its assets.
In court papers seen by The Source, Wazara distanced himself from Valley Technologies saying that it was owned by AfrAsia Kingdom Bank while Chanakira distanced himself and Lalela Trading from the company.
The High Court wrote to the directors of the company, including Chanakira, requesting for a statement of affairs of the company.
In a response through his lawyers, Chitewe Law Practice, dated September 27, 2013, Chanakira confirmed that he was one of the directors appointed on February 1 this year by two Valley Technologies shareholders, Spiritage Telecoms and Connect Investments, after they entered into an agreement with Lalela for the sale of 80% of the shares in the company.
Lalela is an investment vehicle used by Kingdom Bank to effect a debt-to-equity swap for 80% of Valley Technologies early this year after the Internet service provider failed to settle a $21 million loan.
Market watchers say the fallout from the loan ordeal led to Chanakira’s eventual exit in September from the financial services group he founded two decades ago after AfrAsia bought the 30% shareholding in the group held by Crustmoon, Chanakira’s family investment vehicle.
In a circular to shareholders recently, AfrAsia sought approval to repurchase 289 133 648 of its shares held by Crustmoon for a total consideration of $12,5 million. This amount corresponds to the value of Valley Technologies’ telecoms equipment.
Under the proposed deal, AfrAsia would pay Crustmoon $2,5 million in cash while the balance would be made up through an indirect cession of certain claims against loan debtors and related security assets held by Kingdom Bank as well as transfer of the Kingdom trademark.
Analysts suggest this was in reference to the Valley Technologies equipment which is at the centre of a legal dispute between Spiritage and Kingdom Bank.
Kingdom auctioned Valley Technologies’ equipment in May and the sole bidder was a proxy who acquired the gear for $78 000.
The equipment was valued at $12 million.
In his response to the High Court’s request, Chanakira said he and the other directors resigned in April because the anticipated basis of their appointment to the Valley Technologies board did not materialise.
“The conditions precedent/suspensive conditions to the above-mentioned agreement were not fulfilled, which meant that the agreement of sale did not come into operation,” said Chanakira.
He did not specify what the “basis” for the sale was. The other directors involved were Happymore Mapara, Maureen Gula-Ndebele (now Chitewa) and Sobusa Gula-Ndebele (alternate to Ms Gula-Ndebele) and Simplicius Chihambakwe.
Chanakira said the company was placed under liquidation before the company secretary had updated Valley Technologies’ records with the Registrar of Companies as they were no longer directors.
He said that during their brief tenure as Valley Technologies directors, they only held one board meeting and that they were not in the office long enough to have sufficient information on the past and current operations of the company.
He directed further questions on the company’s latest information to Valley Technologies former board directors Zachary Wazara, Albert Ushe, Isaac Njainjai and Munatsi Manyande while the company secretary was Confidence Jaricha.