Cresta in turmoil over attempts to buy Zimbabwe assets

22 Jul 2018

At face value, Cresta Marakanelo is easily the most successful hotel company inside Botswana’s thriving hotel and tourism industry.

The listed company operates eleven hotels across Botswana, with an extra five in Zimbabwe that are run by its sister operation, Cresta Zimbabwe.

But this aura of success belies the Boardroom turmoil that has over the last few years ground the brand to a halt.

Almost three years ago the Group lost its Chief Executive and Chief Finance Officer after widespread allegations of fraud.

While Chief Executive has been replaced, the Group has struggled to replace the CFO.

Three attempts to rope in Rutendo Maziva from Zimbabwe as CFO have been turned down by Botswana Government authorities.

Records show that Botswana Government through the Department of Immigration has on those three occasions turned down Ms Maziva pointing out that there were people more qualified than her locally who could perform the duties of a Cresta CFO.

But the Zimbabwean shareholders have not given up.

Instead they have stationed Ms Maziva in Johannesburg from where she conducts her duties.

Questions abound on how long this will continue before the Group falls foul of the Botswana Stock Exchange rules.

And that is not all.

To illustrate their persistence and that they still harbor hopes that one day she will be allowed to take the job in Botswana, the Zimbabwe outfit of the Group has recently submitted yet another work and resident application for Ms Maziva, this time lodged through the company ITIQ in which she is described  as a director.

ITIQ is closely linked to Shingai Mutasa, the Chairman of Cresta  Zimbabwe, also one of the biggest shareholders in the Cresta Group.

Other Cresta shareholders believe that the use of ITIQ is only a smokescreen.

“If her permit is approved she will go straight to Cresta,” said one of them.

“They want her to do their bidding,” they continued.

At the centre of standoff is the clandestine push by Cresta by Zimbabwe to sell their assets to Cresta Marakanelo based on the strength of Marakanelo’s balance sheet.

Offloading them at $US 600 000 price tag set by its owners does not make sense to other shareholders.

This they say is because Zimbabwe hotels are currently not making money.

After a recent visit to Zimbabwe by local directors, they came to a conclusion that buying those hotels would leave Marakanelo laden with a huge financial burden.

The then Chairman, Maria Nthebolan was adamant that buying the Zimbabwe operations by Marakanelo did not make good commercial sense.

She was later pushed out.

Local Marakanelo shareholders include Botswana Development Corporation, trade union BOPEU and BPOPF (Botswana Public Officers Pension Fund), BIFM, and MVAF (Motor Vehicle Accident Fund.)

The Chairman of Cresta Marakanelo Moathodi Lekaukau would not share insight on the matter because of the current cautionary status the Group is trading under.

Managing Director Mokwena Morulane said that the Group has identified an expatriate who is a financial expert to take over as the company’s CFO.

He said the Group is working with authorities to get the new CFO admitted into the country.