
THE Catholic Church Mansa Diocese in Luapula Province is embroiled in disagreement with a business executive over shareholding in an alcohol business from which the Church has been planning to withdraw.
The Mansa Dioecese has been in the business of brewing opaque beer through a company called Top Star Breweries in which it has a strong ordinary shareholding that stands at two million, representing 20 per cent since 2004.
The Church bought shares from a Lusaka business executive, Alan Kandala and a South African Hendrick Westerman and attempted to transfer them back to Mr Kandala on May 1, 2010 after the firm faced financial hardships and was placed under receivership by Zanaco.
Mr Kandala has demanded capital injection to allow the firm to get back on track and meet its financial obligations such as paying workers and creditors before the Catholic Church could depart from the company.
The form of transfer of the shares to Mr Kandala was signed by Mansa Diocese administrator Michael Merrizy on May 1 last year.
The company faced financial problems after it invested in the construction of another plant in Lusaka and after that, the Church appointed Deloitte and Touche to assess the financial position and draw up a business plan for the firm.
The Church also demanded that the Patents and Companies Administration Agency (PACRA) should de-register it as shareholders in Top Star Breweries, a demand PACRA declined to effect and instead referred the bishops back to Mr Kandala.
According to a letter signed by Bishop Aaron Chisha dated November 19, 2007, the Church confirmed its investments in Top Star Breweries and blamed Mr Kandala for failing to honour the financial obligations on behalf of the company.
“We would like to state that we have never shown any interest in providing further funds for the recapitalisation of the plant line restoration and the packaging project which requires funds to the tune of K500 million.
“In fact, all we wanted was to get back the money invested in Top Star Breweries and that is why we approached Deloitte and Touche,” Bishop Chisha wrote in his letter addressed to the director for corporate banking at Zanaco.
However, Bishop Chisha further disowned shareholding in Top Star Breweries in his letter dated February 21, 2008 to the inspector of companies at PACRA, saying Mr Kandala and PACRA registered the Church as shareholders without their consent.
Bishop Chisha stated that Mansa Diocese had never been a shareholder in Top Star Breweries but invested in the opaque beer brewing firm which failed to honour its obligations.
“Upon being told by Deloitte and Touche that Mr Kandala had registered on the mentioned date with the registrar of companies, we then decided to write you enquiring why you decided to register us without our consent, consultation and in our absence.
“But instead of answering to our letter, you have responded in a way we suspect you to be siding with Mr Kandala,” Bishop Chisha wrote.
But in his letter to the Catholic Nuncio at the Vatican Embassy in Lusaka, Nicola Girasoli, Mr Kandala contested that the Church offered him the same shares it had earlier denied in the business for them to exit from past, future and present obligations.
“The correct position is that at the time the letters were authored, the Diocese of Mansa was a 20 per cent shareholder in Top Star Breweries Limited, an opaque beer manufacturer, with plants in Lusaka and Mansa.
“The Diocese of Mansa enjoyed such equity in the company pursuant to the MoU on Top Star Breweries Limited, dated March 9, 2004 and a subsequent MoU, between the parties dated April 9 2004,” Mr Kandala said.
He said the Church should not abandon the investment in the opaque brewing outfit as the business was still viable.
He said the company needed recapitalisation because there were workers and creditors who should be paid and that so far, he had been paying legal costs to stop the liquidation from his personal resources without counterpart funding from the Catholic Church.
[Times of Zambia]