Parliament heard on Friday morning that ever since a revised shareholders agreement between the Botswana Development Corporation and TA Botswana came into force, the two joint owners of Cresta Marakanelo have not had a dispute.
The parties fell out over a management contract that gave TAB two votes per share whilst BDC, an investment arm of the Botswana government, had only one vote per share. This means that BDC, which is the majority shareholder at 60 percent, had the same number of votes at shareholders’ meetings while TAB, which is a minority shareholder at 40 percent, had 80 votes.
“This was resolved by entering into a new shareholders’ agreement that gave each share one vote, hence recognising BDC as a majority shareholder of Cresta Marakanelo,” finance minister, Baledzi Gaolathe, told parliament.
Prior to reaching an agreement, relations between the two parties were so bad that at one point they fought at the High Court. This was after BDC, which was not happy with the management contract, sought a court order to have the company liquidated. However, TBA triumphed with the High Court upon a ruling that there was no basis upon which to wind up a profitable hotel operation.
Subsequently, the two parties managed to thrash out a new agreement that gives one vote per share and is now in place.
“This arrangement recognises the shareholding of each part. I am happy to inform this honourable house that since this agreement came into operation in July 2002, there have never been disputes between the shareholders,” Gaolathe said.
He also revealed that the hotel group has 90 managerial positions structured as follows: three executives, two Batswana and one foreigner; eight general managers, four being Batswana and four being foreigners; and 79 middle managers, 74 being citizens and five being foreigners.
TAB is a wholly-owned subsidiary of TA Holdings of Zimbabwe. The latter is an investment holding company with interests in insurance, agrochemicals, foods and hotels in the Southern African Development Community. It was founded in 1935 as Tobacco Auctions Limited and set up the first tobacco auction floor the next year. In 1987, the company acquired a 40 percent stake in Cresta Marakanelo which operates eight hotels in Botswana .
When he presented the 2009/10 budget last month, Gaolathe said that work was ongoing to refurbish Cresta Marakanelo hotels at an estimated total cost of P33 million. The group hopes to benefit from what is generally expected to be the 2010 World Cup windfall.