Monday, 8 June 2020

ST ANNE'S HOSP SALE UNDER PROBE


The acquisition of the iconic St Anne’s Hospital by Catholic Church through Sisters of the Little Company of Mary (LCM), has come under the spotlight after it emerged due processes, including approvals from shareholders, were allegedly not followed, Herald Finance & Business can reveal.

St Anne’s, an up market medical facility in Harare, is 80 percent owned by CAPS Healthcare Limited, while the remaining shareholding is owned by Doctors Trust. CAPS Healthcare became a separate entity after the de-merger of CAPS Holdings in 2011.

Of the de-merged entities, the Government offered to by—apiece—68 percent shareholding in CAPS Manufacturing, a medical drugs producer and CAPS Healthcare.

The transactions are yet to be concluded after its emerged the Government hasn’t paid for the shares.

St Anne’s is currently undergoing renovations after LCM, in partnership with Trustees of Solidarity Trust Zimbabwe (SOTZIM), agreed to temporarily set up a Covid-19 response centre to complement Government’s response efforts to the pandemic, which has killed about 380 000 people worldwide and infected nearly 6,3 million.

Four people have succumbed to the ailment in Zimbabwe. The facility will have 100 beds, including those catering for intensive care and high dependence patience.

It is understood that the Reserve Bank of Zimbabwe (RBZ), acting on behalf of the Government entered into an agreement with LCM for the sale of St Anne’s hospital without consulting shareholders. 

Businessman Fred Mutanda owns 20 percent shareholding in CAPS Healthcare and if the Government fails to concludes the CAPS Holdings transaction, Mr Mutanda’s shareholding will in increase to 88 percent.

While the Government has persistently claimed 68 percent ownership of CAPS Manufacturing and CAPS Healthcare Limited, Mutanda revealed last week that what only exists was an agreement for the purchase of the shares of the two companies.

Herald Finance & Business understands that a meeting between RBZ governor Dr John Mangudya and Mr Mutanda was held on Monday, where the central bank promised to make a new offer.

“The purported acquisition of St Anne’s is illegal because the RBZ ignored other shareholders; no EGM (extraordinary general meeting) was held,” said one source who declined to be identified citing confidentiality of the matter. “So for the nuns (Catholic sisters) to claim that they own the hospital is wrong. The transaction has to be regularised.”

“What also complicate the transaction is that the 68 percent the Government claims to own has not yet been paid for assuming that the RBZ entered into the agreement with the nuns on the basis that Government is the majority shareholder.

“Even though, the minority shareholder of CAPS Healthcare will still need to be consulted,” another source, who also requested not to be identified, said. Several calls seeking a comment from Dr Mangudya and Mr Mutanda were not answered. 

Already, Mr Mutanda is challenging CAPS Manufacturing’s debt take over by ZAMCO, arguing it is the RBZ that has obligation to settle the debt since it owes CAPS US$7 million.

The debt arose after RBZ in 2008 ordered CAPS to release all its drugs to State-owned National Pharmaceuticals.

Mr Mutanda is resisting the move by ZAMCO to convert the debt into equity. The central bank set up ZAMCO in 2015 as a special purpose vehicle established to hive off non-performing loans from banks that were groaning under the burden of toxic obligations. Herald

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