Scraping of FirstRand Deal Fuels Zambian Currency Slide

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Zambian President Michael Sata yesterday scrapped FirstRand Ltd.’s purchase of a local lender and fired the board of the central bank. The Kwacha fell the most against the Dollar.

Sata, who defeated incumbent Rupiah Banda in a Sept. 20 election, dissolved the boards of three state agencies, including power utility Zesco, according to a statement from his office. The board of the Bank of Zambia was removed after Governor Caleb Fundanga was fired on Sept. 29.

The currency of Africa’s biggest copper producer dropped as much as 3.8% to 5,014 per dollar yesterday, the biggest decline since December 2008 and the most of any currency tracked by Bloomberg. It weakened 1% to 5,065 by 8:38 a.m. in Lusaka. Sata’s overhaul may heighten investors’ concerns at a time when copper prices have dropped 27 percent since August, undermining the economy’s outlook.

Sata “is sending the message that he is not dependent on external powers. Obviously that is a worrying sign for investors.”

“When people come into presidential positions they bring their own people,” Yarik Turianskyi, a political researcher at the South African Institute of International Affairs, said in a telephone interview from Johannesburg yesterday. “With more moderate leaders, this is more of a moderate process.” Sata “is sending the message that he is not dependent on external powers. Obviously that is a worrying sign for investors.”

Kwacha Gains

The kwacha gained 20 percent from April 2009 to the end of last year as the economy benefited from debt cancellation in 2006, rising copper prices and inflation easing below 10 percent for the first time in three decades.

Sata, 73, has pledged to extract more money from mining companies to distribute to citizens, create jobs and fight corruption. Companies including Vedanta Resources Plc, First Quantum Minerals Ltd. and Glencore International Plc operate in Zambia.

Sata didn’t give a reason for annulling FirstRand’s 27 billion-kwacha ($5.5 million) takeover of Finance Bank Zambia Ltd.. The central bank seized Finance Bank in December for breaching financial laws and agreed to sell it to Johannesburg- based FirstRand, which had been managing it for eight months.

“We strongly believe that due process was followed and that the agreements reached with the Bank of Zambia were concluded in accordance with Zambian law,” Michael Jordaan, chief executive officer of FirstRand’s First National Bank, said in an e-mailed statement yesterday.

John Sangwa, a lawyer for Finance Bank’s former Chairman Rajan Mahtani, said the central bank’s decision to dispose of Finance Bank’s assets was “flawed” and Mahtani was “very happy” with the decision.

This is the risk of doing business in Africa, if certain political parties are not happy there is the chance they can reverse a deal

Meanwhile Analysts have said Zambia’s decision highlighted the political hazards of investing in an African country, particularly after a change of government. “It is a bit of a shock, as I thought that it was done and dusted,” said Johan Scholtz, banking analyst at Cape Town-based Afrifocus. It was even more surprising since Zambia was a country where South African companies such as retailer Shoprite had experienced great trading success, he said.

“This is the risk of doing business in Africa and if certain political parties are not happy there is the chance they can reverse (a deal),” said Faizal Moolla, a banking analyst at Avior Research. “However, it was a small acquisition so it would have not had a dramatic impact on FirstRand’s African strategy. But it is a bad precedent and leaves a bad taste.”

Mr Moolla said FNB could still expand in Zambia through organic growth, although he warned this could be costly, given the expenditure required for new branches, ATMs and recruiting staff.

Mr Jordaan struck a positive note about FNB’s future in Zambia, saying the bank remained committed to investing in the country and would “continue to evaluate our options as the situation develops”.

FNB had expected to become the fifth-largest retail bank in Zambia after purchasing Finance Bank based on balance sheet size, adding 50 more branches to its five.

[Bloomberg/Businessday]

105 COMMENTS

  1. Thats just the beggining. Other economic mechanisms will follow. Give it one year, then you will realise how Sata has destroyed Zambia. Mark my words!

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  2. Sata should be advised that Zambia is not an island. At the rate the PF government is going they will soon get chocked with there decisions.
    The global economy is going thru a jittery stretch at the moment and being a country whose economy is heavily commodity driven—the signals that the PF government is sending will soon affect the markets.PF is sowing seed of uncertainty to investors. You cant have a president making alarming decisions without regard to global market temperature. Right now global demand for copper is low, with a decline of almost 20% in the last three months. And the picture ahead does not look any good given the debt problems in Europe and continued slow down of the USA economy. Sata can make still reposses Finance Bank in a more strategic and smart way.

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  3. Remember how Anglo America regreated their speculative decision making? $ 5m for 50 branches is outright theft!

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  4. Got to laugh at some this nonsense we get to read on LT. Next we will be told the kwacha has fallen because people who raped our economy have been sent to jail!

    Got to love this. Well done HE MCS so far. The counytry is behind you apart from those that raped our country and the very few from erm down south.

    We are waiting for the defence chiefs now sir. I am surprised it has taken this long. Also, Zamtel please we want people who thought having a bum is all it takes to get away with murder.

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  5. It is time foreigners started respecting us in Zambia. We are definitely not respected in their lands. I am happy with the reversed sale of FBZ as we ALL knew that it was a personal issue between Rajan and Rupiah. now that FBZ that was built by Zambians, employed Zambians and has the largest branch network in Zambians, has come back to Zambia, we can surely say, Sata is Patriotic enough to keep Zambian things Zambian. His move was necessary because it shows that we welcome foreign investment, but not at the price of Zambian wealth. We want better lives and knowing that the Gvt is on the Zambian side is a real incentive to hard work.

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  6. Sata should be advised that Zambia is not an island. At the rate the PF government is going they will soon get chocked with there decisions.
    The global economy is going thru a jittery stretch at the moment and being a country whose economy is heavily commodity driven—the signals that the PF government is sending will soon affect the markets.PF is sowing seed of uncertainty to investors. You cant have a president making alarming decisions without regard to global market temperature. Right now global demand for copper is low, with a decline of almost 20% in the last three months. And the picture ahead does not look any good given the debt problems in Europe and continued slow down of the USA economy. Sata could still have repossesed Finance Bank in a more strategic and smart way.

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    • Keke ,you are not a Zambian I suppose. If you were and you followed what happened you could have put a thought to your statement before you wasted your time writing this comment. Zambia is for Zambians and we have to shape our destine. we do not need pipo like u who, from my point of view you could be an investor who could come, corrupt the politicians and steal our wealth. Investment is about doing business honestly so that you do not risk being cought up in fraudulent deals and conduct your activities with your clear concious. I trust u know that development cannot come about where lawlessness is condoned. take a leaf from Greece. the policians have had a field day all along!

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  7. Sata cannot reposses Finance Bank because it is not governmet property and has no right to sell it. By Law, the Zambia Competition Commmission did not even approve the sale as is suppose to be! Kaleb FOOD and DUNG!!

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  8. Poor judgement from sellers – I started one of the Nigerian banks as a greefield with $5.25mio which was invested in refurbishing a Cairo Road building and paid rent for five years. How do you sell a bank with 48 branches for $5.4mio. It is riduculous. Same thing with KCM happened when it was sold for $25mio when it had more stock and cash exceeding $100mio. The new govt must get professionals to help them run more complicated and technical affairs of governance. Otherwise these deals must be relooked at and if they need help we shall provide it.

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  9. Keke tell us how Zambians have benefited from the copper sales apart from people saying they have a job! Do you know howmuch these guys make from getting our copper for almost free of charge?

    As for Finance Bank, what else did you want him to do? He requested for an investigation. The guys instructed to do that investigation came back with more than enough information within two days of their job. FirstRand have confirmed there were irreguralities in that sale. Try and keep your head above water if you are going to see anything.

    The question we should be asking now is how did RB come to this sale? Look we have no time to waste. We are a working government. There is a lot to come. I have said unless you were part of all this, the president is on the right track.

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  10. The slide in the value of the Zambian Kwacha can only benefit the Zambians in the diaspora. Take advantage now.

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  11. On a serious note I see a reduction in FDI with these kind of decisions d presido is makin it doesn’t send out a good msg to potential investors!anyway let’s wait n see as more action/drama unfolds in d mean its smile n wave!

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  12. Atase how could u sell a bank with branches across the country at at 27 billion kwacha?U can leave Zambia FNB if u want.we don’t need infectors!!

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  13. Zambians do not be afraid – Zambia has significant strategic natutal resources – all these investors are not going to run away. They are here to make money and they will make money. I can assure you that not even FNB will leave Zambia after this – they are already making super profits here! So steady yourselves and be assertive – dont be swayed by the lobbying capacity – the intimidating power of an investor – they will always put pressure on you to make bad decisions. But all you need to do is to look at our friends in Guinea – they have put up more taxes and increased demand for mining ownership – the investors are ok with that – all the investor needs is to make money and they will make money in Zambia. So fellow Zambians dont be scared!!! GET Ready to be RICH!!

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  14. This night-mare experiment will go on until Zambians realised what they did to themselves. For now lets all wait and watch, there is sadly more to come.

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  15. Probe First Rand for Corruption and chess them if found wanted. This explains why RB was frequenting RSA. You boers, this is not SA. Zambia will get better and better  without you racists!!

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  16. Zambia is not desparate for investment…neither are we worried about the kwacha shocks…this is time to fix issues..and obviously things will be unsettled and calm down again. Political risks are all over the world.. South Africa ANC is talking about nationalisation of mines…guess who is violently protecting…umusungu or umulungu as they re called in RSA… I say to any infestors or investors…if u dont like what u c in King Cobra,…dont jump on Zambezi airline…

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  17. It is a known fact that Rajan Mahtan plays dirt and that FBZ flouted banking regulations. But Zambia should learn to keep and guard its own and the decision to take over and the later sale ($5m) was not the only and best option available. All this was done in bad faith and one wonders how an entity worth more than $200m could be sold for 27Billion kwachas/$5m. Maybe FNB would have had a 2.5% shareholding.

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    • Very good points. Sale was irregular, but Mahtani is not innocent. His lawyer should be careful not to celebrate too early: there are still issues to resolve.

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  18. FBZ was sold as a result of bad a relationship between Mathani and RB. We all know that. RB wanted Mathani to pay back for reposesing a House that RB bought using money he borrowed from FBZ which he failed to pay back. This was shem. FirstRand bank was so certain that RB will win the elections and they will get away with it. Unfortunately things turned the other way and salt has filled their mouth. Firstrand bank should have paid more than the mentioned 27 billion. Am sure the diference went to MMDogs for campaignings. God is with us and there are better things to come than the kwacha falling today.

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  19. The speculation on the reasons for the fall of the Kwacha against the US$ should not be treated as gospel. I can also advance a theory; corrupt investors upon realising that past acts of corruption will not be accepted have decided to run away; or are hedging their bets by holding the US$, hence the fall! The main body of the article also points out another factor that is overlooked in most comments so far – the investment by FNB was a very small one, and in my opinion, does not warrant the headline. It should also be noted that there will always be short term currency flactuations in any economy following a change in government – it is normal, and this is usually corrected with policy detail – something yet to emerge.

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  20. Zambians shouldn’t let foreigners dictate how the country should be run. The people wanted a change and they got it. Our resources should benefit us primarily and not foreigners. All Zambians who’ve lived abroad know how we are treated in foreign countries.

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  21. This is stupiiiiiiiiiiiiiiiiiiiiiid infestors.Infact this bank should be chased away from zambia.how could u buy a bank thru corruptions?I can even go and chess these crazy Boers.FNB is not a trusted bank in Zambia.Infact very few people banking in FNB.It’s the same bank which also funded RB during campaign period

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  22. Indeed how can you sell a band with branches dotted across the country for a partry K27billion or better still 5.4 million dollars? It stincks, just like the former presido did not like mathani and sold his bank that we the zambiana belaoboured to establish the current presido is doing the right thing by reposessing it so that if they want to sell it, they will sell it for 20million dollars or better still K 100,000,000,000. At lease then we will know that its worth that much not that song at which they sold it. VIVA SATA.

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  23. Uuukoooo, Kaya Mwandi!!!!! Zambia under…………..! This is change at its best, workers are protesting everywhere, bcoz their expectations are so high that sat….. can’t meet them, Watch this space,
    1. if salaries are increased by 100% according to people’s expectations, then expect some people to lose jobs, and then the trouble starts.
    2. If salaries are not increased according to people’s expectation, people will stone sata for cheating them and raising their hopes for nothing.

    Either way it goes I see trouble coming, coz people’s expectations for sata were raised so high than the man can do. There is no way u can move from 20 to 20,000,000.

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    • You are a *****. Should you always see a glass as half empty and not half full. You negativity leaves much to be desired. I recommend you get born again and see things with a positive outlook not with this negative prophesy of yours. Zambia shall live and we shall prosper whether you like it or not.

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  24. The president should take it easy,at the moment he is over speeding.Some of his decisions are correct but due process should be followed.He should also allow his ministers or govt institutions to perform their duties.The govt won’t be judged in 90 days but rather 5 years.Good start but take it easy also outline your plan/vision for the country instead of just firing and dissolving boards.

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  25. Those South African’s should just shut up. They dont even know the history behind why RB sold the bloody bank. It was personal. Shoprite’s success in Zambia has been at the expense of Zambian workers who have been kept on as casuals for years. Zambia has not benefited from Shoprites super normal profits, so what success is the Boer talking about. Finance Bank has 50 branches accross the country how in the world can you purcahse such a huge bank at USD5.4m. Anyway First Merchant bank was stupid to go into such a deal during election time, serves them right. It’s about time they started respecting us these chaps and Zambian should stop sucking up to them.

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  26. Very good points. Sale was irregular, but Mahtani is not yet proven innocent. His lawyer should be careful not to celebrate too soon: there are still issues to resolve.

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  27. Bloomberg, explain also why the US dollar, Yen and Rand trading power dropped during the same period in question. Was it also because of FNB?

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  28. Though investors are a necessity, but am amazed at how the analysis is coming on that selling the bank could have kept the kwacha up. So, corruption strengthens the kwacha? amazing.Investors must do what they want for the kwacha to be strong, very interesting.So
    investors must aprove the changes in the country for the kwacha to be strong? am becoming irritated.

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  29. PF CONSTITUTION ARTICLE 3:
    PUBLIC INSTITUTIONS
    The Party shall ensure that all the public institutions, State-owned enterprises and popular mass
    and similar organizations are led by persons who are members of the Party and who are
    uncompromisingly committed to achievements of the Party. PF CONSTITUTION ARTICLE 5: PARTY SUPREME ORGAN
    The Party is the supreme organization and the guiding political force in the land. Its aims and
    objectives as expressed in this Constitution shall provide guidelines for all persons and associated
    to it. (VISIT patriotic-front.com). I hope you now understand the recent firings and replacements.

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  30. Well done Mr. Sata. These ignorant and naive analysts and so called experts from South Africa must learn a lesson from zambia, that Mikaeli chilufya Sata, will not brook corrupt deals even if it means the kwacha slides for however long. Zambia does not and will not depend on South Africa for anything. Therefore, the reversal of the finance bank, sale is the correct move. Congrats again.

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  31. Some pipo r so dull that they dont understand real investors,come and put up infrastructure and start up something .Dont take my fathers house and use it n expect me to call investor .In SA you cant bring even beans from zambia,but y do we allow shoprtie not to buy from local farmers.Even security companies are from South african ,what do they leave for us at the end of the day.They suck money through their own banks like FNB,bulllllllllllshhhhhhtt.

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  32. “Mr Moolla said FNB could still expand in Zambia through organic growth, although he warned this could be costly, given the expenditure required for new branches, ATMs and recruiting staff”. Are these guys serious about investing, if they are then they should expand and not have an easy ride but buying off a bank using under hand methods. The should create more jobs just as Finance Bank and other banks have done. Stanbic Bank came and set up branches, the sweated and invested, this led to improved infrastructure.

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  33. 500 million Kwacha per branch?????? Yenzeko bad. Even just to buy the FBZ brand would have cost more.

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  34. @Jonas
    Correct.Some people just want to cricise for nothing ,you dont retrench FB workers and start FNB and say thats Job creation,start your own

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    • imagine zoana 27 billion. Kapoko stole that in moths they should have sold him the bank since he is zambian. kwangala ku

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  35. “Mr Moolla said FNB could still expand in Zambia through organic growth, although he warned this could be costly, given the expenditure required for new branches, ATMs and recruiting staff.”
    This just shows that they acquire FBZ for a song. Crooks as well for buying fast. Envelopes DID change hands.

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  36. “Mr Moolla said FNB could still expand in Zambia through organic growth, although he warned this could be costly, given the expenditure required for new branches, ATMs and recruiting staff”
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    EFYO BAFWAYA IFI, IFYAPAMBALE. Every right thinking Zambian should say no to this kind of so called foreign investment. Can somebody tell me that Rand Bank was going to maintain that branch in Mwinilunga?

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  37. By the way LT. This is a south african article trying to distabilise the Kwacha. This will not be allowed.

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  38. Very soon all the economic indicators will move in reverse; Inflation will go back to double digit, Credit rating will drop from 2.5, we will soon querelling with IMF and the FDIs will be thing of the past as sata runs zambia single handedly.

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  39. It is normal for surrencies to fluctuate, especially before the new regime establishes itself and is well understood by markets, it will certainly bounce back.

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  40. These foolish South African infestors must understand that we have had enough of their nonsense. Let them go to RB and reclaim their money. It’s utter absurdity to broad daylight rob our own bank, after they cooked figures to devalue the bank when they were asked to take care of the Bank. Corruption must never be tolerated in any form…..

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  41. chase FNB from Zambia if its found to have been engaged in corrupt activities with the former regime.

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  42. Bravo MCS for reversing the FBZ deal..First Rand Bank are frankly a bunch of thieves who knowingly tried to **** the people of Zambia over the FBZ deal. They knew that this whole transaction was bogus from the word go..Those silly analysts from South Africa should really be focusing on the dishonesty of the management at First Rand Bank for using their investors money to finance a deal they knew was fraudulently organised..what a bunch of idoits.

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  43. Reuters 4th October, 2011- Investor preference for safer assets accelerated flows into gold, pushing the market up 1 percent while copper tumbled 4 percent as investors dumped the industrial metal on worries over a slowdown in growth and turned to dollar holdings.

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  44. It should not matter who owns what. What we should be insisting on is that Zambians are paid professional salaries if they are doing professional jobs. Only individuals can decide how the money they earn can be spent for the benefit of their families. It does not make sense to work for a company owned by Zambians if Zambians end up being paid peanuts. Exploitation is exploitation. This is what those who fought for independence wanted to get rid off in our beloved Country.

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  45.  Sata can not replace the mistakes that RB made in selling  finance bank to FNB by not properly investigating and coming up with a sound decision on why the bank should be given back, he needs to ensure investor confidence is not undermined in the process of tryng to correct decisions that where made by the previous government that are considered to be irregular. Shouldn’t  it be the responsibility of the ministers concerned to be dissolving boards and firing people? Does everything have to happen via the president? We need the president to be the custodian of the constitution and to abide by the constitution rather than be the chief breaker of it. By the way I am a PF supporter. Possible corrupt decisions that are reversed based on unsound decision making are just as worse as them.

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  46. I hope Mathani’s institutes legal action against the people that blatantly abused their authority over the FBZ deal. RB, Fundanga, Musokotwane and company should compensate him from their pockets…MCS let the police also go after these crook with IMMEDIATE EFFECT.

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  47. Lusaka Times, move and see how the the so-called investors have started putting money in their workers pockets. Where has the money come from? where you happy to see Zambians being exploited by foreigners enslaving them in their country? shame on you. Let them go if they are not willing to respect us.

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  48. I am waiting for the time when the Kwacha will be 1:1 with the American dollar or British Sterling Pound because that is what PF promised the voters. Sata as a man of action should fulfill his promises. We expect the price of fuel to go down because Sata used to tease RB that he failed to bring the cost down.

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  49. If wrong was commited in the sale of Finance Bank because there was no transparency in the transaction, then it must be reversed.
    The reversal, also should be transparent enough to highlight the wrongs that warrant the reversal.
    If we punish lack of transparency by using a non transparent method, we have acted serious commedy.

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  50. Fraudulent acquisition of wealth either by Corporate entity or individuals cannot be sustained and FNB knows it. If they are true investors, lets see how far they will go to reach out the unbanked remote areas. Investment does not only entails one to ourightly make huge profits abut also take risks in long term investment in this case building new and modern FNB branches countrywide.

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  51. FNB should have waited to close the deal till after the elections, how do you close a deal when there is no cabinet in place; If they really want to invest invest in Zambia why not just build your own branches not paying a paltry $5million (with Overseas agencies and ATMs). 
    Currency dips are normal its just a glitch infact that is a publication from RSA you know where they are looking at it from..

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  52. I feel like Nostradamus….I remember saying a lot of what other readers have said about the effect of MCS’s demeanor on future foreign investors. Am sure after this FNB fiasco they have a foot on the brake pedal….efyo mwachila fwaya? I hope MMD-UPND MP’s impeach the man before its too late.

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  53. Ofcourse this article is written by some MULUNGU person in support of their unethical and blatant theft committed in the sale of Finance bank to FNB. The president made it very clear that there were no documents to support the sale of Finance bank to the later. The sale of Finance bank was cooked by Rupiah avenging himself for losing his house in Kabulonga over a loan from Finance bank. The decision to reverse this deal is sound and good and FirstRand Bank can go to court if they are agrieved and sincerely believe that they deserved to buy Finance Bank at K 27 billion. Boers think Zambia is another province of South Africa to continue exploiting! Wait until RSA nationalise mines, your white ar$es will freeze in shock! VIVA MCS! MAN OF ACTION!

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  54. Makes no difference as the kwacha is already destroyed anyways. Nothing to do with SATA’s decision if the Bank was sold unfairly then let it be given back to the owner. Cannot believe that MMD Grabbed the Bank from Martani just because he did not support them.

    FNB as well are to blame for getting in to such a nonsense deal.

    Feel the spit of Black Mamba, Mubobo Cobra Sata. Strike Cobra Strike.

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  55. Remember that BOZ paid some renowned company to carry out Due diligence $1million that’s just easy money for them again. If that company really want to earn there  money they would have concluded that the right time to close the deal would have been after the elections BUT this is highly unlikely as they whole lot of them were in bed together, FNB, BOZ, buffoon RB and MMD.

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  56. hey you bloggers what about insight.five point something million +suitcase full of greenbacks for the incumbents .maybe the same amount again?still went for a song.deals made at night have to go for a song there is not enough light.

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  57. Some of you fools think Sata is not making consultations on the decisions he is making.
    Do you know who he is talking to in the back ground.Some of the things they are doing ,they
    had it all down in case they came into power so they dont need days and days to think about
    it.That is called good planning…..PLANNING IN ANTICIPATION.

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  58. KCM was sold for $24mil, Didier Drogba went to Chelsea the same year for $25mil. Recently KCM employees were given brown envelopes that did not have any cash in them… We are fooled!

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  59. Stupid Zambians!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    Already you have forgotten that even a small shopping mall like manda hill (by SA Stds of course) you needed SA to build one. You think yopu do anything without investors all those shops that employ you will close and all of you will be selling second cloths, cars and shoes again. Sata’s changes are fine but the speed of execution is dangerous, that could reduce FDI. I know the kaponyas don’t even have a clue what I am talking about. You will frequent SA for cooking oil, salt, matches, etc. AGAIN, SLOW DOWN MR PRESIDENT …. ITS YOUR PIPO U ARE HURTING NOT INVESTORS.

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  60. #67 IDACHI IN UK,
    All govts make consultations for your information, no one can think that SATA should be an exception.
    However, consultations are not always right, that is why people have still blundered in the midst of a wealthy of consultations.

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  61. Kawilo, you are wrong. I wish I knew you personally, because, five years down the road the Zambia, we are going to see emerging will baffle many current critics, and I would like then to remind you what I am saying today. This is the time for Zambia, to get going finally. The real man is now in office, forget his so called tribe, if you can. Not all his ministers are, A okay but watch and keep on watching and you will be astounded as to what will be taking place in our Beloved Zambia, JESUS country.

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  62. Faizal Moolla or whatever your punk name is. Where in this world can you purchase a bank for K27bn. Just looking at the buildings alone that Finance Bank countrywide has should entail that this was a stupid deal conducted in bad faith. Then you look at other assets the company has, the vehicles, the human capital, the ATM machines and furniture. You scavenges should go and make your own bank with your own money. Now that is investing in a nation, not trying to be opportunist to take what you did not build. Analyst my ass trying to claim that this is the danger of investing in Africa. To the contrary, this is the danger of trying to steal instead of doing the right thing. Monkey boers with your analysis

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  63. look at these foolish analysts they wanted to jump start from 5 to 55 with what some 1 bult on their own sweat why not begin fromt heir 5 and up if they realy see potential

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  64. The author of this article is just sad that the corrupt deal has been exposed. The South African rand had depreciating so much in the last weeks. Is it because of the same reversal? Go and fool your dull flock. 

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  65. Where on earth would a bank like FBZ be sold for only $5.4million dollars? Look at the way Zamtel was sold. are investors supporting one rule in the western world for accountability and transparency yet should not be practiced in Africa? Investment are very safe and welcome in Zambia provided it is done in a transparent and accountable manner like most places in developed countries. The Kwacha will bounce back when the dust settles.

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  66. Analysts should not be quick to highlight the political hazards of investing in an African country, they should know that if they deal is suspicious, justice would one day take its course. why is Johan Scholtz shocked when he knew very well that the deal was not straight??? And Faizal Moolla, lets not even blame the politics in africa, we should check our morals as investors and make sure that we make clean deals if we want to maintain our investments in Africa……lets not take africans for granted………lets come clean in our business deals or stay out of Africa for good

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  67. FirstRand acquired the bank last month as part of the group’s strategy to expand on the continent. Less than a week ago Mr Sata fired Zambia’s central bank governor, who would have approved the sale.

    The collapse of the deal comes a few months after FirstRand confirmed the failure of talks to buy Nigeria’s Sterling Bank, over price. (Businessday). So they want to be buying banks at a cheap price.

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  68. The Risk in Investing in Africa is: If you an Investor takes advantage of the Corrupt nature of the People you are negotiating with. When there is change and you face other incorruptible people, definitely your investment will be under microscope. Investors do the right thing and secure your investment no matter a change in Government. I know a friend who refused to do construction work in an African country because he was told to pay government officials huge sums of money.

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  69. There we go again!When Adolf Hitler over Germany he did the same things and had a lot of supporters but finally destroyed Germany ,Europe and the whole world.I want to say that Zambians were wrong to elect Sata.Yes we got it wrong!!Maybe you guys dont see it,let me give you 24 months then you will tell me.Remember this name the way i remember KADANSA !!Those who grew and lived in Lusaka will remember him at the post office when Kaunda was president and Sata governor of Lusaka!I scream we were WRONG to vote for Sata!!Wait and see.GOD BLESS ZAMBIA.usaka will remember him at the post office when Kaunda was president and Sata governor of Lusaka!I scream we were WRONG to vote for Sata!!Wait and see.GOD BLESS ZAMBIA.

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  70. Good afternoon

    I’m impressed that the majority of bloggers are able to see beyond the sensational side of this report.

    The deal raises just too many questions to be left standing. And if it was just a “small acquisition” as they say, why would it then have any significant impact on the currency?

    Even in Europe, you have the situation where the bigger Banks are always jockeyeing the smaller ones, how much more in Africa where most Banks are forced to operate under unfair conditions with regard to developing economies?

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    • Well said Nina Chale. Zambia is part of the world and one look at currency fluctuations across the globe and this is a storm in a tea cup. I’m going to wait and see how this all pans out.

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  71. #70 The President doen’t need to make an announcement that he has made a consultation with his cabinet or other advisers for any particular situation.All he needs to do is to make the announcement.Here in the UK the collision government has been making sweeping changes
    which were planned even before they came into power[Some of them a compromise between the two parties]Examples being changes in IMMIGRATION,NATIONAL HEALTH SERVICE[N.H.S.] WELFARE OR BENEFITS SYSTEM,EDUCATION,PUBLIC SECTOR SPENDING ETC.Do you then call the Prime Minister and his Deputy dictators?

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  72. Never again will investors take Zambians for granted. The decisions that Mr. Sata is making are currently the mandate of the people and those are his presidential powers. May be after 90 days he will slow down for now the “boat” is cruising. stopping it will cause will just cause an accident

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  73. Give Ceasar what belongs to ceasar. Justice will always prevail. Let Mr. Sata rid our country off this scum of corrupt tandem of thieves

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  74. So …the banks are affordable huh?24Billion i can tell my mother,my uncle,my cousin and my other 5 good friends to put up their pension and buy it.

    Real investors put up infrastructure….not inheriting shit…so up yours we dont need you

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  75. Only if he hasnt already started Nationalization!!They say he is a nationalist?I am waiting for Sata to go and call investors, and i dont know how many will come.He has sent a very negative signal which will harm Zambia badly.He wants to bring back Zambia airways!In what business form?Of cause under nationalisation.Didnt they badly in the past.The problem with this country is that people are very ignorant.Tell me why so many worked in the mines but still the mines are not run by Zambians.Its the same everywhere else p.t.c,raiways,schools,universities,banks etc.we just cant do anything.Now we sitting in bars and waiting for Sata to nationalise!We cant even play football properly!oh my words!! GOD BLESS ZAMBIA.

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  76. @ Mpika Boy

    Yesterday I had told you that capital flight is to follow after the president decided to reverse the Finance Bank deal and you argued against me. I want you to come and defend your statement which you made yesterday as it seems I was right.

    This is what happens when you have a president who is more interested in playing politics than governing the nation. President Sata must put his house in order before he ruins the gains this nation has made.

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  77. i am sorry but u cant trash investors because of patriotism.. the way things are going, muzalila maibabe..u gonna be out of work soon in case u dont know what the current financial situation is like. cleaning up corruption is good but speed sure as hell kills!

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  78. good news . . .i hope its continues slidding upto say K7,500=$1 or even doubling to @ K10 grand/$. I need more Kwacha more in my pocket when i come for Dec holiday. After that it can go back to K5 pin /$

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  79. Did any of the blogers attend the signing ceremony as is the norm for such transactions? When president says the are no documents for the sale of the bank a fool starts asking if the president had investigated. Investigate what transaction if I may ask? Things have changed bane meaning he won’t waste his time and peoples money holding seminars, workshops or committees over straight forward issues

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  80. Some bloggers are using academic economic jargon to hood wink the things that need to be corrected in Zambia. Were these bloggers happy with the status quo? Should have Zambia continued with the 80% unemployment? Increase their debt when the countries debt was recently cancelled? Get peanuts out of copper exports to a point that they can’t divert their economy? Continue selling a major bank for only $5.4 million when people know it is worth much more? Oh , I forget take a prominent established company like Zamtel and sell it to the Libyans who have an unstable country?.Investors prefer to work or invest in an environment where there is order and accountability. In the long term it keeps their investments safe as the work ethics and culture is improved and fears the law.

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  81. Who evaluated FBZ assets and come to a conclusion that it should be sold at K 27 Billion….this sounds like a serious case of getting back at someone….why was RB trying to destroy peoples lives because of revenge, can you imagine how many people would have lost their jobs, these infestors dont even bother to put up serious infrastructure, they only come here to rent old buildings…no wonder this was a deal they could not resist ….and i dont think FNB has serious advisers…they thought this issue will be swept under the carpet after MMD wins… VIVA SATA.

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  82. Fluctuations are always there as investors become jittery in face of critical decisions. Its temporal and things will get back to normal when the waters calm down soon.

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  83. @92 Firstrand employees evaluated FBZ assets for me this is were the corruption begins they had insider information and i guess what they found was too good such that they took a gamble at a time we were having elections cos any serious investor would have waited until after elections

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  84. Whether kwacha gains or not there is no benefit on the common man. Prices of essential commodities are always the same. During Dr Chiluba kwacha gained it was less than 3pin a dollar but basics such as mealie meal, cooking oil, etc remained on the same prices. Only international traders benefitted.. GO GO GO GO GO Mr President Sata…..Go go go go go go go go go g o go go

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  85. Faizal Moolla, a banking analyst at Avior Research. “However, it was a small acquisition so it would have not had a dramatic impact on FirstRand’s African strategy. But it is a bad precedent and leaves a bad taste.”

    So what’s the Buzz, if its such ” a small acquisition???” We are waiting for the truth to be told!!!!

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  86. Always trying to dance kulu bamwisa! Please it is time ukutwibila stopped! $5.4 million for a company? You guys are very blind.

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