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Business Editor
MEIKLES Limited chairman John Moxon yesterday attacked the Reserve Bank of Zimbabwe (RBZ) —labelling it a “delinquent debtor” — as the dispute surrounding its suspension and subsequent lifting of the suspension from the Zimbabwe Stock Exchange ZSE) continues.

The hospitality group was temporarily kicked out of the bourse last week to pave way for an investigation over allegations that it overstated a $90 million debt owed to it by the central bank.

The suspension, which was approved by the Securities and Exchange Commission, was reversed on Tuesday after Meikles threatened legal action with the ZSE admitting it erred in suspending the group without giving it an opportunity to make its representation over the matter in terms Section 111 of the Securities and Exchange Act (Cap 24.25) and paragraph 15 of the ZSE listings requirement.

Meikles insists it is owed more than $90m by RBZ despite submission by former central bank advisor and Bikita West legislator Munyaradzi Kereke in Parliament that the group deliberately inflated the figures to manipulate its price on the stock market.

Kereke has said RBZ debt to Meikles stood at $34.1 million as at December 2008 and could not have ballooned to $90m.

The group has since been given up to Monday March 2 to respond to the submissions by RBZ on the amount owed and to issue a statement on the financial effects and any litigation issues on the debt.

In his response yesterday Moxon accused the RBZ of being insincere in its dealings.

“The RBZ has, for a long period, been a delinquent debtor to Meikles as it has failed to perform in terms of returning the funds owing to Meikles despite demands appropriate to the return of a call deposit,” said Moxon.

He argued the sum on deposit with the RBZ was “placed with the bank under duress” in 1998 and that the funds were on deposit hence subject to call by Meikles.

Moxon said the funds in question arose from “proceeds of foreign investment” received in Zimbabwe in what was, at that time, believed to be the largest single foreign investment of new funds into the country on the ZSE.

He said the sum due to Meikles was calculated based on an agreement between the firm and RBZ, then under Gideon Gono, that it was to be calculated by accruing interest to the capital sum outstanding from time to time at a rate of eight percent per annum compounded back dated to the date when the deposit was made.

“This arrangement accrues interest to Meikles at a lesser rate than the cost of borrowing to the company. The sum due to Meikles has indeed increased to $90 million due to the agreement on interest referred above. This is simple mathematical calculation, not a fabrication,” argued Moxon.

He blasted Kereke alongside MDC-T legislator Eddie Cross, who is a shareholder in Meikles, of abusing their Parliamentary privilege by giving credibility to “misleading” information about the company by virtue of their social standing — prompting the probe that culminated in their suspension.

“Irresponsible reference has been made in public to a so called lack of corporate governance in Meikles,” said Moxon adding the move has caused severe business harm to the listed firm’s business operations and image.

He said the latest action by ZSE was done without any interaction with Meikles as stipulated at law.

“There is now uncertainty as to whether the group’s planned strategy will be feasible, if so, when? The ZSE, the detractors mentioned above and perhaps others have put in question an entire investment strategy for this group and perhaps for others who are interested in furthering the economic interests of Zimbabwe,” said Moxon.

Clarifying the position, he said RBZ recently committed $76 million of treasury bills and other payments in writing, which have not yet been received in full by the company.

Moxon also said the finalised sum owed to date was meant to ensure that all short term borrowings in Meikles as a company were eliminated or matched with an appropriate deposit.

In 2012 the amount was at $38.62 million and then rose to $40.51 million in 2013.

However, last year the group recorded a balance of $90.9 million, a 124.4 percent increase from the prior year’s amount.

Meikles says the increase in the amount was a result of interest negotiations, which are based on lending rates.