The appointment of CAPS directors by the Ministry of Industry and Commerce this week is irregular as Government does not own shares in the pharmaceutical firm, said businessman Fred Mutanda.
Mutanda has persistently claimed that while he entered into an agreement with the Government to dispose of his 68 percent, the shareholding was never paid for, leading to the cancellation of the agreement.
On Monday, Industry and Commerce Minister Dr Sekai Nzenza, announced a five-member board for the pharmaceutical firm as part of plans to turn around the company.
Pharmaceutical quality assurance specialist Ian Matondo will chair the new board, whose other members include Tapiwa Mashingaidze, Sinikiwe Gwatidzo, Arthur Manase and Bothwell Nyajeka.
Their appointment, which was approved by President Mnangagwa, was in line with the Public Entities and Corporate Governance Act (Chapter 10:31) and is effective November 4, 2020.
Mutanda has since written to Dr Nzenza, challenging the appointments, arguing only shareholders have the right to do so in terms of the Companies Act.
“I refer to your press statement of November 6, 2020 on the appointment of CAPS board,” said Mutanda.
“The CAPS board can only be appointed by the shareholders in accordance with the Companies Act (Chapter 24:03) and in terms of the provision of the Memorandum of Articles.
“Government is not a shareholder in CAPS.”
Mutanda claims he is the current majority shareholder in CAPS through his vehicle CAPS International.
While the Government has persistently claimed 68 percent ownership of CAPS, Mutanda said in May this year that what only existed was an agreement for the purchase of the shares.
“The RBZ failed to pay for that shareholding in terms of the agreement,” Mutanda said.
Confirming his claim is a letter dated December 10, 2018 by the Attorney General’s office that while the Government had shown interest in purchasing the stake through negotiations conducted on its behalf by the RBZ, it later decided to the contrary.
“Government is not interested in acquiring your shareholding in CAPS International and will accordingly not enter into a negotiated settlement,” reads part of the AGs letter.
In an interview this week, Mutanda said he had no problem in Government owning shares in CAPS, but “should just pay”.
“By doing so, Government would have demonstrated that it can respect property rights,” he said.
The legacy issues at CAPS have continued stalling the revival of once the country’s largest producer of medical drugs.
CAPS used to supply 75 percent of the country’s drug requirements. It was a major medical drug supplier in the sub-Saharan Africa.
CAPS is involved in the procurement, manufacturing and distribution of pharmaceutical, veterinary and consumer products. It also manufactures anti-malarial, painkillers, antibiotics, paediatric formulations, and a range of other drugs and medicines. The company is currently resuscitating the LVP plant.
However, the global lockdown has affected the movement of spares and equipment due to travel restrictions. – Herald