DOVES Life Assurance Company owners are engaging an ugly legal battle in High Court after Farai Matsika allegedly tried to elbow out his partner Phibeon Busangabanye. Matsika and Busangabaye bought Doves from incarcerated businessman Munyaradzi Kereke in 2012 through their jointly-owned investment vehicle, Transfrontier Investments (Transfrontier), which they formed in 2008.
Busangabanye claims in his High Court challenge that he and Matsika have a 50- 50 shareholding in Transfrontier, which acquired 100% shareholding in Doves.
Matsika, he argues, has “refused, neglected or failed” to implement an oral shareholders agreement despite the presence of a memorandum of understanding indicating they held equal shareholding in the company.
He is seeking a High Court order declaring that Transfrontier is the sole beneficiary holder of 100% of the shares in Doves. Busangabanye also wants the court to direct the two to conclude the shareholder’s agreement “to apportion shares to their chosen entities and to comply with the Insurance and Pensions Commission (Ipec) regulations” and to restrain other entities from muscling themselves into Doves.
In his application, Busangabanye contends that they acquired Doves as a going concern, and amended Transfrontier’s paperwork to reflect their equal shareholdings. It was agreed that they would pay a purchase consideration of US$2,8 million for the 100% equity held by Kereke’s Rockford Foundation Trust (RFT) and another US$2,2 million (net of taxes) in deferred dividends due to the Trust.
The deferred dividends were to be paid after five years from the date of the transaction, while the purchase price was to be paid in payments of US$500 000, as deposit and monthly installments. The legal counsels, who chaperoned the transaction advised that Transfrontier could not hold the entire stake alone as that would breach industry requirements, and the group made a decision to introduce two other vehicles to warehouse the shares, Faramatsi and Besilicata.
His understanding was that the money was meant to be a loan to Transfrontier and that some of it were going towards payment of the deposit since the legal fees were only US$32 000. Matsika is cited as the first respondent while Doves is the fifth respondent.
“This is an application for an order declaring Transfrontier Investments (Private) Limited to be the sole beneficiary holder of 100%of the shares in in Doves Holding Limited, directing Phibeon Busangabanye and Farai Matsika to conclude US$127 000 monthly installments a shareholder’s agreement apportioning the shares held in 5th respondent between their chosen entities to comply with legal requirements,” Busangabanye’s application reads.
Last month, High Court judge Justice Happias Zhou blocked Doves from convening an extraordinary general meeting to elect a new board pending the finalization of the wrangle following a challenge by Busangabaye.
Source – The Independent