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SHAREHOLDERS of Empowerment Corporation have accepted the offer from Brainworks Capital Management for EC’s 40 percent stake in Telecel Zimbabwe against the backdrop of pronouncements from the government that the mobile phone operator does not have a licence nor a legal operating permit.

The offer was accepted after protracted discussions on Friday that yielded a pact which will result in EC reverting to the shareholding structure that existed when Telecel was issued with a licence.

The compromise agreement could put to rest the bickering that has characterised the shareholding wrangle in EC and allow Brainworks to help Telecel meet its licence fee obligations.

The country’s third largest mobile phone operator has only paid a fraction of the $137 million licence renewal fee to allow it to operate for the next 20 years after the expiry of its 15-year permit.

Minister of Information Communication Technology, Postal and Courier Services Supa Mandiwanzira said the government’s major concern was that of compliance.

“Telecel isn’t compliant with the licencing requirements neither are they compliant with the statutes of the Indigenisation Act and the Potraz Act which require 51 percent shareholding for locals. So in essence whoever decides to buy into the company must know that it doesn’t have a licence neither is there a guarantee that it will get a licence. That position is not influenced by that transaction.”

At the EGM, Petwin Executor and Trust Company was appointed to look into the value of contributions made by each shareholder for the shareholding and expenses incurred in the company.

EC chief executive Patrick Zhuwao said on Friday that the agreement reached took into account the fact that Telecel was operating without a licence and had not paid for licence renewal.

“We agreed to accept the offer from Brainworks, which will ensure that Telecel is licensed and hope Brainworks will be able to fulfil the licence requirements to comply with indigenisation requirements.

“We’ve addressed all the grievances of all the founding shareholders. We agreed to a point where IBWO will have more than the 9 percent they have been claiming in EC,” said Zhuwao.

Some of the entities that fiercely contested the EC shareholding structure namely Indigenous Business Women Organisation, National Miners Association and Zimbabwe Farmers Union will each get 12.8 percent stake.

Exiled businessman James Makamba, who was at the centre of a bitter and protracted wrangle with another EC major shareholder, Jane Mutasa, will revert to his original 21 percent stake.

“We’ve resorted to the original shareholding that prevailed when the government issued Telecel with a licence taking into consideration cost expenses incurred by each member,” he said.

Under the original shareholding, National Miners Association was supposed to get 9 percent, ZFU 9 percent, Magamba Echimurenga 9 percent, Integrated Engineering Group 9 percent and IBWO 9 percent.

He said Petwin Executor and Trust Company would determine all expenses incurred by members of EC, including interest, so that they are all reimbursed to the fairest extent possible.

Zhuwao said the shareholders appreciated the government’s position regarding cancellation of Telecel’s licence and were not keen on helping majority shareholder to continue in breach of laws.

As such, the acquisition of EC’s 40 percent stake by Brainworks would see the company do all that is necessary to ensure that the mobile phone operator complies with licensing requirements.

Brainworks has dangled a $20 million offer to acquire the entire shareholding of EC in Telecel, but some aggrieved members sought to scuttle the deal unless the grievances were addressed.

Minister of Welfare Services for War Veterans Ambassador Christopher Mutsvangwa who was speaking in his capacity as Zimbabwe National Liberation War Veterans Association chairperson said the agreement was a welcome development as it fulfilled the interests of the war veterans.

“Of course we were not happy about the recent on goings at the company and I understand the licence of the company was granted in good faith but over the years the war veterans have failed to enjoy their rights as Telecel shareholders,” Ambassador Mutsvangwa said.

The war veterans leader added that Telecel’s licence was “specifically granted for the war veterans and as the chairman I’ll fight hard to make sure no one infringes the rights of the war veterans.”

“I hope the agreement will create a platform for proper engagement with the government of Zimbabwe on the reinstatement of the licence. The agreement should create sufficient atmosphere for engagement because the company can’t continue operating without a licence,” he said.

No comment could be obtained from other original shareholders in EC yesterday.