ZIMRE Holdings Limited (ZHL) board member, Aadil Ebrahim Adamjee has in the past been arrested for tax evasion and corruption with critics questioning his suitability to sit on the board of the financial services group, investigations have shown.
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The appointment of Adamjee together with Hamish Rudland and Cron von Siedel was confirmed at ZHL’s annual general meeting on June 24.
Adam and Rudland are representing the interests of the new shareholder, Day River Corporation, which emerged with a 40,16% stake after underwriting ZHL’s $15 million capital-raising initiative.
The consortium has Rudland among its shareholders.
In 2006, Adamjee was arrested together with Rudland’s brother, Simon, by South Africa’s crimebusting unit, the Scorpions, on tax evasion, corruption, evading excise and import duties and money laundering charges.
The investigators seized R9 million worth of cigarettes, R600 000 in cash and laptops, desktop computers and documents.
The latest revelation will be another blow for ZHL, which has been in the eye of a storm since the Rudland-led consortium emerged with 40% after underwriting the $15m rights offer early this year. One of ZHL’s shareholders, the National Social Security Authority (NSSA), has already said that it is investigating the circumstances under which the Rudland-led consortium ended up underwriting the transaction instead of NMB Bank.
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“We are investigating internally and with other authorities such as the Reserve Bank of Zimbabwe, Zimbabwe Stock Exchange and Securities and Exchange Commission of Zimbabwe to understand how that transaction happened.
We are unhappy with that,” NSSA board chairperson, Robin Vela told NewsDay last week.
“One day we are told NMB are the underwriters, a day later we have Rudland as 40% shareholder.”
Vela said NSSA was concerned about ZHL, related-party issues and how the transaction came about.
“It’s far from over from where we sit,” he said. ZHL board chairperson, Ben Kumalo said all proposed new board appointments are subject to careful consideration by the board nominations committee for recommendation to the main board.
“This includes a review of the proposed board member’s educational qualifications, skills and experience.
In the process we did not come across any information that disqualified Aadil Adamjee from appointment as a member of the ZHL board,” he said adding that he was not aware of any “criminal record on the part of Adamjee or indeed any other member of the ZHL Board”.
“Board members are either proposed as independent board members or by shareholders, with a significant shareholding, as is normal practice with all listed companies.
NSSA, government and the new majority shareholders have nominated directors to represent them on the ZHL board.”
Hamish was not available on his mobile phone, which repeatedly went to voicemail yesterday.
The entry of the Rudlands into the financial services group is being challenged by the Affirmative Action Group (AAG), which has besieged government to reverse the transaction.
“We cannot afford to wean our best assets and leave the best of our local management assets to fall afoul of the unchecked and sharpened appetites of the economic pirates of yesteryear dressed in black faces,” AAG vice-president, Sam Ncube wrote in a letter to Chief Secretary to the President and Cabinet, Misheck Sibanda.
The letter was dated October 1, 2015.
