(TALKZIMBABWE) Moneyweb and ex-Meikles Chief John Moxon

Moneyweb and ex-Meikles Chief John Moxon
Interview - Moneyweb and ex-Meikles Chief John Moxon
Tue, 22 Sep 2009 13:06:00 +0000

ALEC HOGG of Moneyweb.co.za spoke with John Moxon, the former chairman of Kingdom Meikles Africa over the details surrounding the specification of that company. John no longer lives in Zimbabwe. He fled the country last year when he was specified.

Full transcript

JOHN MOXON: Yes, we were harassed this time last year, September last year. It was after we tried, as a family, to remove the chief executive, who we thought was pursuing his own agenda and not necessarily the company's agenda. We were hassled, so we left. There's no legal implication against us, it was just hassling. It was rather the same as I suppose in ... land.

ALEC HOGG: People who know Zimbabwe will know that Meikles has been there for many years. You did a merger two years ago with a banking operation called Kingdom, and I guess that's where all the problems start. Why did you merge in the first place?

JOHN MOXON: We were an investor in Kingdom for some years - in fact, we had 34% of Kingdom before the merger. And I think we decided to be proactive with the government's then indigenisation programme. We tried to be proactive. We had been in business with Kingdom, we thought we knew the people - and there are some very good people in Kingdom; you can't generalise. The merger started off very well but then I think certain people had their own agenda, and we tried to oppose that. The next thing that happened of course was the typical thing in the circumstances - you get accused of racialism, next thing making those governments start involving the Reserve Bank and other state enterprises to accuse you of externalising money and things of that nature.

The next step is one gets "specified", which we were on January 16th as a family, which means that you've got no control or say over your own assets. You've got both your hands tied behind your back, with the very wide powers that these investigators or administrators have.

And since then the board of directors also came to the same conclusion that they wanted to remove the chief executive, the same chief executive, they called an AGM for this purpose. In fact, this takes place next week on the 24th. And that's why I think this man used his political connections to specify the company, because he is trying to ensure there isn't an AGM, that he isn't removed, and that he can continue as he has been.

ALEC HOGG: Specifying the company - That's part of the Prevention of Corruption Act. What exactly does it mean?

JOHN MOXON: What it means is that the government can appoint an administrator - in this case he has appointed two administrators, and they have wide powers to ensure that the company operates in a certain manner. So basically you can almost say they are the joint managing directors of the company for all intents and purposes.

ALEC HOGG: So the government has taken over the business, in essence?

JOHN MOXON: Then they'll settle down for a while, get themselves established and then, as it continues without being stopped, they'll start to rape and pillage, I think.

ALEC HOGG: It reminds one of Ayn Rand's book Atlas Shrugged, where she talked about the looters. But on Wednesday this week Robert Mugabe at a mining conference in Harare said Zimbabwe respects property rights and the rule of law. What you are saying is that he doesn't?

JOHN MOXON: I think I'd like to put it this way. There are elements in his party, Zanu PF, who don't. There may or may not be elements in the MDC who don't; there are elements in both parties who do and would like to see the rule of law be established. I think the battle now in our case here is which element is going to win - where will the power be? There's a lot, a lot of international comment on this, which I think will surprise a lot of the politicians up there. It has exposed it. I think specifying a company which employs 4 500, 5 000 people is very different from specifying a family, which consists of four or five people, one of whom is ill, anyway. So they couldn't defend themselves. But 4 500 people perhaps can.

ALEC HOGG: The market capitalisation of Kingdom Meikles, according to Bloomberg, anyway, is US$90m. If the specification continues, if government continues to own the business, presumably the shareholders who own the $90m will be left with nothing?

JOHN MOXON: Yes, in effect. And even now, from a day-to-day point of view, the creditors are jittery, the banks are jittery, customers are jittery. So the winding-down process of the company has begun already, a week later.

ALEC HOGG: John, give us a bit of background on exactly how substantial Meikles is in the Zimbabwean economy.

JOHN MOXON: At the date of the merger, at the end of 2007, our market capitalisation at that time was approximately US$500m, and we were the largest listed company on the stock exchange as a Zimbabwe company - we had a secondary listing in London - not including the Old Mutual, who has a certain number of their shares on the Zimbabwe Stock Exchange, for example, because they are a large international company. But as a Zimbabwean company at that point in time we were the largest. Since the "shareholder row" as it's been called - but it's got beyond a shareholder row now - has started, our market cap relative to the other major companies has dropped and we are certainly no longer the largest by any means.

ALEC HOGG: And the secondary listing in London - does that continue?

JOHN MOXON: It does, it does. But at this point in time we've only got about 3% of our total shares on the London Stock Exchange. At our rights year 1996 we were well supported by the international market, where in fact at that time 35% of our total shares were in London. But now it's only 3%.

ALEC HOGG: The signature on the specification, or "to be specified" on Kingdom Meikles, was co-signed by not just Mugabe's man, but by MDC's co-minister of Home Affairs, Giles Mutsekwa. That sounds like this problem goes a lot deeper.

JOHN MOXON: Perhaps it does, although I understand he's been saying he made a mistake, he was misled, so I think he is trying to distance himself from it. But the damage is done. I am not sure at this point in time that one can really say that the MDC as a whole is complicit in the same nature of activity as Zanu PF have been. I think it's too early to say. But it has aroused suspicion that there's a possibility.

ALEC HOGG: John Moxon is the former chairman of Kingdom Meikles. How's that, Wayne? A US$500m company, now worth $90m - if you can sell the shares.

WAYNE McCURRIE: No Alec, it doesn't sound like good news at all, does it?

ALEC HOGG: I would be a little concerned if I was Impala Platinum and other companies that have got investments in Zimbabwe.

WAYNE McCURRIE: I think everyone's concerned about that.

ALEC HOGG: Indeed they should be.