By Alois Vinga
PROBLEMS continue to mount for Lafarge Cement Zimbabwe (LACZ), prompting the company to request three months’ suspension in trading from the Zimbabwe Stock Exchange (ZSE) to address in-house challenges.
This is due to a recently concluded deal by Fossil Mines to buy a 76% stake in LACZ which was stalled for economic sanctions related issues by the US Office of Foreign Asset Control (OFAC).
In mid-December 2022 OFAC added Fossil Agro, Fossil Contracting and the group’s chief executive officer, Obey Chimuka, to its Specially Designated Nationals (SDN) list due to alleged links to a previously sanctioned individual, Kudakwashe Tagwirei, and his company, Sakunda Holdings.
OFAC contends that the business tycoon “materially assisted, sponsored, or provided financial, material, logistical, or technical support for, or goods or services in support of, the Government of Zimbabwe.”
It accused him of using his relationships with government officials to gain state contracts, to receive access to currencies including the US Dollar and of supplying luxury items such as cars to ministers.
To date LACZ divestment following the acquisition agreement has been stalled by OFAC’s allegations.
The cement manufacturer has since announced that the developments will not in any way affect business amid considerations for various courses of action with a view to protecting the business and the interests of all stakeholders.
In an update this week, ZSE chief executive officer Justin Bgoni said a request by the company for the suspension of its shares trading was granted.
“ZSE hereby notifies the investing public of the voluntary suspension from trading in shares of Lafarge Cement Zimbabwe Limited (“Lafarge”) with effect from 13 January 2023.
“The suspension is for a period of 3 (three) months to allow Lafarge to attend to material developments within its operations post the execution of a sale and purchase agreement between Associated International Cement Limited and Fossil Mines (Private) Limited for a 76,45% shareholding in Lafarge,” he said.
Bgoni said ZSE has since requested LACZ to provide a roadmap on how they aim to resolve the challenges they currently face through a public notice addressing this point in due course.