RETAILER, Meikles Limited, has lost US$7,39 million in shareholder value following the emergence of boardroom disputes over corporate governance anomalies.
Meikles has since October been embroiled in boardroom disputes over corporate governance breaches between the firm’s chairperson, John Moxon, and its then independent non executive directors who resigned at an extraordinary general meeting (EGM) held on Wednesday last week.
The independent non executive directors that resigned are Rugare Chidembo, James Mushore, Stewart Cranswick and Simmon Hammond.
When the dispute emerged on October 12, Meikles had a market capitalisation of US$42,8 million. This dropped to US$35,41 million on November 26, the last day of trading of the firm’s shares.
The Zimbabwe Stock Exchange suspended the trading of Meikles shares with effect from November 26 to allow the group to resolve its governance weaknesses.
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“As independent non-executive directors of Meikles Limited whose removal is being sought by the resolutions intended to be passed at the extra-ordinary general meeting set for December 18 2024 at 1100 hours, we hereby exercise our right in terms of Section 177 (2) of the Companies and Other Business Entities Act (Chapter 24:31) to address the shareholders before any vote is taken on whether or not we should be removed,” read a joint statement by Chidembo, Mushore, Cranswick and Hammond at last week’s EGM.
“We previously issued a statement on November 11 2024, noting our concerns on how the company was being run. We also wrote a letter to the Zimbabwe Stock Exchange suggesting that Meikles Limited’s securities be suspended pending resolution of corporate governance issues.
“We also issued a Press statement, which was published in the Zimbabwe Independent newspaper on November 29 2024, correcting misleading statements published by the majority shareholder, Meikles Consolidated Holdings (Private) Limited. We present the statement, the letter and the Press statement to the shareholders.”
The quartet said this material detailed the genesis of the board’s problems with Moxon, resulting in him deciding to use his ownership of Meikles Consolidated Holdings (Private) Limited to seek the board’s removal.
Meikles Consolidated Holdings (Private) Limited has a 48,38% stake in Meikles, making it the single largest shareholder.
“We are aware and have been advised of the provisions of Section 202 of the Companies and Other Business Entities Act. We also know that we can be removed as directors of Meikles Limited and certainly would not ordinarily hold on to such positions as directors. However, we have remained to ensure that we fulfil our duties to the company as provided for by the law,” the statement read.
“This is so because we feel that we have an obligation to ensure proper corporate governance over major decisions such as asset disposals and also to ensure that no outside control and influence is exerted on the chairman, which could result in decisions which are not in the interests of the company and are prejudicial to shareholders as a whole.”
The four said they were concerned about the chairperson’s reluctance to seek and consider other higher offers for the disposal of the Victoria Falls Hotel, which Meikles has a 50% stake in.
“The board has appointed six new independent directors to secure the ongoing interests of all the shareholders,” the statement read.
“In view of our responsibilities as independent directors to protect the interests of minority shareholders, we have sought relief from the courts and the Zimbabwe Stock Exchange, but none has been received to date. In view of the above, we hereby resign as independent non-executive directors with immediate effect.”
Meikles In September scheduled a board meeting for October 1 to discuss a disposal transaction of its shares in the Victoria Falls Hotel.
However, during this meeting, the board discussed the removal of the then Meikles chief executive officer Malcolm Mycroft and announced the appointment of Matthew Moxon to the post in an acting capacity on October 4.
This riled the Meikles chairperson who accused accuse the board of not following due process and violating the company’s corporate governance protocols Moxon said the board did not notify him of their intention to sack Mycroft.
He called for an EGM on October 22 seeking redress over the matter, which was not held as of November 26, over the 21 days provided by law in calling for such a meeting.
Moxon then called for the ouster of Chidembo, Mushore, Cranswick and Hammond at last week’s EGM. The quartet resigned at the meeting before shareholders could vote.
