AFRASIA Kingdom Limited minority shareholders forced the postponement of the group’s extraordinary general meeting to consider, among other resolutions, a proposal to raise fresh capital, after raising reservations over an unclear resolution.
The reservations pertained to the pledge to transfer the entire share capital of MicroKing Finance Limited to AfrAsia by Kingdom Bank pursuant to a liquidity support agreement between the two.
Minorities were unhappy about the lack of clarity on the rationale behind the arrangement considering that MicroKing is the cash cow of the business. This has resulted in AfrAsia chief executive Lynn Mukonoweshuro apologising.
The EGM meant to consider a total of 12 resolutions had initially been slated for 11 November 2013 will now be held on the 29th of this month after the shareholders objection.
The unclear resolution was only one of several others including the proposal for raising a total of US$20 million through a rights offer and issuance of preference shares.
The US$20 million capital raise was part of initial steps by the group to raise a total of US$100 million to enable Kingdom Bank to meet regulatory minimum capital thresholds.
Sources said minorities were also taken aback by the group’s failure to issue a circular to shareholders advising of the event in line with rules for public listed companies.
Following the objection raised by minority shareholders the AfrAsia Kingdom chief executive was forced to make a fervent apology to the minorities over the anomalies.
“I am aware that the service from our group, especially the bank has been far from satisfactory,” said Mrs Mukonoweshuro.
“I can only begin to imagine the damage to our relationship, your reputation and your trust in our bank. I am exceptionally sorry for all this and sincerely wish it had been avoided. It is my hope and prayer that you allow me the opportunity to express my apology again in person at an appropriate time.”
Mrs Mukonoweshuro said the rights issue the financial services group is pursuing was meant to put the group on a firm pedestal to ensure exceptional service to customers.
Efforts to get a comment from Mrs Mukonoweshuro were fruitless as her mobile phone went unanswered.
The Mauritian-based AfrAsia Kingdom has embarked on an aggressive capital raising drive to strengthen its balance sheet after recently buying out founding director and shareholder Nigel Chanakira in a multimillion deal involving equity and cash swap.
AfrAsia increased its shareholding in AfrAsia Kingdom Zimbabwe to a controlling 54 percent after purchasing Mr Chanakira’s 30 percent shareholding held through Crustmoon.
Other resolutions that were scheduled to be considered at the aborted initial EGM included approval of a US$12,5 million consideration for the repurchase of 289 133 648 ordinary shares held by Mr Chanakira’s Crustmoon Investments in AfrAsia.
The EGM also sought consider directors’ proposal to change the name of AfrAsia Kingdom by dropping the “Kingdom” clamp from the group and all its subsidiaries’ names.
Further, the meeting would consider key proposals for capital reduction, control of unissued shares by directors, issue of new ordinary shares, consolidation of shares, increase of share capital and amendments to the company’s article of association.