According to a government gazette published on December 31, shareholders who include Finsbury Investment Limited, Credit Suisse Investments, Clarkwell Limited, Job Albert T Samuel, Estate of the late Pat Bwalya Puta and Patrick Chamunda, have ceased to hold shareholder interest in the bank.
BoZ concluded that in its opinion, FBZL was failing and would have continued to fail to conduct its business in accordance with the law.
In the Bank’s opinion, FBZL was conducting its business in an unsafe and unsound manner, and that it would have been unable to continue its operations in the ordinary course of business.
BoZ has concluded that FBZL had weak corporate governance and risk management systems which facilitated the perpetration of wanton violations of the provisions of the Banking and Financial Services Act (BFSA), subsidiary legislation and other regulations.
It was also noted that FBZL through its shareholders, directors or senior management, either collectively or individually, violated various provisions of the BFSA and its Statutory Instruments.
One of the shareholders, Dr Rajan Mahtani, through Finsbury Investments Limited, with shares held by nominees or otherwise, effectively controlled 56.5 per cent of FBZL’s shareholding in contravention of the 25 per cent limit.
FBZL also violated provisions of the Act by failure to act in the best interest of the bank and failure to exercise due care, diligence and skill by allowing indiscriminate approvals and granting loans to insiders contrary to sound lending practices.
FBZL failed to declare interest relating to contracts, facilities and also exposed itself to a single risk exposure of 62 per cent, among many other violations.
According to the gazette notice, the BoZ has statutory and legal authority to terminate the interests of shareholders in FBZL, with compensation to be determined by a court of law.
The gazette further states that the purported holding of shares by Finsbury, Clarkwell Limited and Mr Samuel in FBZL was characterised by complex trust and transfer arrangements whose final consequence was that the beneficial shareholding in FBZL was not that of the declared entities, but converged on the Executive Chairman of Finsbury, Dr Mahtani.
The BoZ had reason to believe that the indirect acquisition of shares into FBZL by Dr Mahtani via complex arrangements violates the provisions of the BFSA, as neither the declared shareholders nor Dr Mahtani disclosed these obscure arrangements to the bank.
BoZ in exercise of the powers contained in section 81(1)(c)(i) and (ii) of the BFSA took possession of FBZL on 10th December, 2010.
BoZ further terminated the shareholder interest in FBZL on December 22, 2010.
The decision to take possession of FBZL was made after BoZ conducted inspections on FBZL.
BoZ also conducted a due diligence inquiry in May 2010, in which all the declared shareholders, including the natural persons behind the corporate entities holding shares in FBZL, were invited to participate in person , and they informed BoZ that they were nominees for Dr Mahtani.
Relevant documents in possession of the Bank in connection with the shareholding by Mr Samuel, who did not attend the meetings, confirm that he, too, is a nominee of Dr Mahtani.
[Zambia Daily Mail]
Too much theft, they should clos the bank. Myself and my white bf we bank with santander, probablly the best bank in the world, I am scared to just invest anyhow
Thanks
Let us move on. Let them do the valuation of the bank acceptable to Credit Suisse and pay all shareholders their share of that valuation. Let another institution takes it over and we move to another Zambian Bank. We have options.
The speed with which BOZ is moving with some of the decisions makes one wonder as to the motive behind the takeover of the Bank
MATHANI ALL YOUR MANUPALATION WILL NOT WORK ANYMORE,YOU CAN GRAB OTHER PEOPLES ASSETS SEND SOME PEOPLE TO JAIL AND ENJOY.WHAT YOU SOW IS WHAT YOU REAP.YOU WILL FOR SEVEN YEARS BE EATING GRASS LIKE THE KING WHO WAS VERY PROUD.
Sort out the rot we know one director bought a Range rover sport via a ‘LOAN” on an email
Good move BOZ
Iwe ka mushota how abt deutch bank, yu really anoy pipo, but never tek it 4 granted
#7 Templer. Please speak for yourself. What has Mushota said to annoy people. You are the one who is irritated by her comment for reasons best known to yourself. Always speak for yourself.
Excuse me but can someone tell me how it is ZANACO shareholders can violate the 25 percent shareholding limit but Finance Bank shareholders can not.
# 9 Good question could some one please answer.
These included Section 23(2) (Limitation on voting control)-Dr Mahtani, through Finsbury Investments Limited, with shares held by nominees or otherwise, effectively controlled 56.5 per cent shareholding in contravention of the 25 per cent limit.
Section 35 of the BSFA (Disclosure of Interest) – failure to disclose interests relating to contracts, facilities, proposed contracts or facilities with Finance Bank and Section 33 (Conduct of directors, Chief Executive Officers and Managers) where these failed to act in the best interest of Finance Bank and failure to exercise due care, diligence and skill by allowing indiscriminate approvals and granting of loans to insiders contrary to sound lending practices.
Section 73 of the BFSA and SI 96 on limitations of granting of loans exposed…
The truth is now being revealed. there is more to come
The Bank of Zambia gave a waiver ensuring that government did not breach provisions of the Banking and Financial Services Act (BFSA which does not allow any investor owning more than 25 per cent shares in a bank)”.
In April 2007, Rabobank acquired a 49 percent stake in Zambia National Commercial Bank, commonly known as Zanaco, following the Zambian Government’s decision to privatise the bank. In 2008 the bank was listed on the Lusaka Stock Exchange, thus successfully concluding one of Zambia’s largest privatisations. This empowered many Zambians from different walks of life, including the bank’s employees, to become shareholders of their bank, and ensuring it remained “Citizen Owned.” Zanaco is currently owned 45.6% by Rabobank, 25% by GRZ, while 29.4% is held by local iNVESTORS
So if Rabobank hold 45.6% shares how is that not violation of the banking code? Have they also valuated the shareholding of the Nigerian and South African banks? What is the shareholding of Barclays etc?
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