The board of conglomerate Press Corporation Limited (PCL) has warned both the government and the management of the company that there will be no winner in the fight that has ensued over the ownership of the company.
PCL board chairperson Symon Itaye said the company would be the loser in the fight between the government and the management.
“We will try to manage the situation, but we cannot disclose what action the board is going to take,” he said.
Itaye said this following a wrangle between PCL management and government with the latter accusing PCL management of mismanaging the company.
Among other things, the government demanded PCL management to provide all information for accountability, but PCL has countered by saying government’s assertions were misinformed and dangerous, insisting it has no locus standi on the matter.
In a press release issued on Thursday, the government, among other things, wondered why PCL only pays 16 percent dividend to the shareholders when the dividend payment policy requires that 35 percent of profits after tax should be paid to shareholders.
In the 2014 financial year, PCL made a net profit of K11 billion out of which it gave its shareholders K1.5 billion as dividend. Press Trust pocketed K667 million, Old Mutual earned K215.5 million, Deutsche Bank Trust of America received K335.1 million while the others shared K63 million.
However, PCL said management intends to challenge the dividend payment policy that required 35 percent of profits after tax should be paid to shareholders.
“The 35 percent should have been on the dividends paid to PCL not on profits after tax because not all the money that is made by the subsidiary companies comes to PCL. If we apply the required 35 percent on dividends PCL received, you will see that the K1.5 billion is more than the 35 percent required,” said Chisomo Macholowe, PCL investor relations and corporate communications officer.
In the press statement, the government further argued that PCL group chief executive Matthews Chikaonda had promised to replace the companies that were closed with new and more vibrant companies.
The government cited projects such as Tourism Cape Maclear Resort, Energy-Solar and Hydropower, PCL Head Office at Top Mandala, PTC Zambia Operations, Chapima Heights Residential Project, Ethanol Flex Vehicles and Maldeco Expansion (new fishing vessel disaster) as proposals that failed to take off.
PCL, however, argued that some of the projects failed because of government itself, saying the Tourism Cape Maclear Resort project was put on hold because government and PCL would not agree on some elements.
“We wanted a concession to be agreed on a larger land than what government was offering. We needed Mangochi to have a state-of-the-art hospital as well You know we do not have all those in Mangochi, so the project was put on hold,” said Macholowe.as direct access to an airport.
The government also observed that PCL is sailing in troubled waters, citing some of its companies that are facing challenges including BBGL Carlsberg Malawi Ltd in which government claims PCL lost majority shareholding; Press Properties which government said faces so many uncertainties; Maldeco, MTL and PTC which government claims are technically insolvent; and PressCane Limited which is locked in ownership battle in court.
“Only the top five have no problems, but the bottom six has one major challenge or other. Some of them are technically insolvent, while others have legal ownership challenges,” reads part of the statement.
PCL said the company was engaging private investors and that government’s comments would jeopardise the investments.
“It is dangerous information for the stakeholders and it’s a pity. We are discussing with strategic partners to invest in these companies,” she said.
PCL-listed on both Malawi Stock Exchange and London Stock Exchange-is a publicly owned company with Press Trust being the major shareholders with 44.47 percent, Old Mutual 14.37 percent, Deutsche Bank Trust of America 22.34 percent and others 18.82 percent.
Press Trust is governed by trustees who determine the form and quantum of contributions Press Trust will make towards the development and betterment of Malawi. The objective of Press Trust is to act on behalf of the citizens