Illovo Sugar has refuted accusations that minority investors in the Zambian unit are deliberately underpaid.
Lewis Mosho, a Zambian lawyer, complained to the Lusaka-based securities regulator that Zambia Sugar Plc, which is about 82-percent owned by Illovo, was deliberately reducing profits to benefit its parent company at the expense of minority shareholders.
Illovo can only assume that Mosho “was seeking to advance his own personal agenda” and not the interests of minority shareholders in making the claims, Chris Fitz-Gerald, a spokesman for the Mount Edgecombe, South Africa-based company, said in an e-mailed response to questions today.
Mosho didn’t respond to a message left with his assistant and didn’t answer a call to his mobile phone. He owns 180 shares in the Lusaka-listed company, according to Illovo. That would equal 1,225.80 kwacha ($199) based on today’s closing price of 6.81 kwacha, according to Bloomberg calculations.
Illovo responded to Mosho’s complaint and is waiting for a decision from the Lusaka Stock Exchange, Fitz-Gerald said. Loans that Illovo provided to Zambia Sugar benefited shareholders by lowering interest rates and reducing foreign-currency risk, he said. Securities and Exchange Commission Chief Executive Officer Wala Chabala said today the regulator had established a committee to look into the complaint and would make a decision by Sept. 16 on whether to investigate it.
Zambia Sugar Managing Director Aubrey Chibumba resigned effective Sept. 9 and the company appointed Marketing Director Rebecca Katowato act in the position, Fitz-Gerald said, without giving reasons for Chibumba’s exit.