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Econet running scared

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Business tycoon Nicholas van Hoogstraten has described Econet Wireless’ disposal of its Rainbow Tourism Group (RTG) shares as an attempt to limit potential damage in the event the company’s shady deals are exposed.

Van Hoogstraten last month threatened to expose Econet if his appointees were blocked from the RTG board.

“If my appointed directors are defrauded again of their rightful positions we will call an EGM (extraordinary general meeting),” he said before the June 29 annual general meeting (AGM).
All his four nominees to the RTG board were blocked.

Econet Wireless Group senior executive Tracy Mpofu last week announced the communications company had sold more than 11% that it held in RTG to the National Social Security Authority (NSSA) as the hotel group no longer fitted into the company’s investment plans.

In an emailed response van Hoogstraten said:

“They (Econet) are obviously fearful of fallout from our proposed detailed circular to RTG shareholders outlining the fraudulent dealings of their pawn (Patterson) Timba. The government and NSSA are well aware of this and, in an attempt at damage limitation, may have agreed to buy the Econet stake even though some of these shares are part of the 19% stolen from Messina Investments Ltd in 2005. The stake that Econet purports to have sold is 15%, not 10%.”

“Furthermore, Econet is elsewhere currently trying to obtain control of the insolvent Afre group (also plundered by Timba) in order to obtain access to their insurance and pension funds which hold large indirect stakes in RTG. These insurance and pension funds need to be protected from Econet or any of its stooges.”

Reflecting on the RTG AGM held last month, Van Hoogstraten said Econet had a specific agenda at the meeting as they needed to buy time in order to cover up or distance themselves from the frauds at ReNaissance/RTG.

“They knew that for me to call an EGM would take at least 8–10 weeks. They could also have been put under pressure by NSSA and the government bearing in mind that RTG is a prestige asset which has been brought to the edge of financial ruin by its $20 million of recent borrowings and the Timba theft of at least $5 million. We will now have to consider and possibly discuss with NSSA the way forward.

“The Messina High Court action regarding the 2005 Rights Issue fraud will continue. Contrary to inaccurate reports put out by RTG the issues we now raise in the High Court were not dealt with as part of the former arbitration matter.”

Asked if he had any idea about the deal between Econet and NSSA, van Hoogstraten said: “I had no idea but I did suspect, when the ‘book over’ was carried out in the market, that the only party, other than ourselves with this kind of money would be NSSA.

“However, they may only be warehousing the shares so it may be a case of ‘watch this space’.”
In her statement last week, Mpofu said the recent controversy surrounding the company was petty and not worthy of a response.

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