ZB Financial Holdings’ (ZBFH) move to re-appoint Ernst & Young (EY) as external auditors for the 2025 financial year hit a snag last week after the major shareholder, Transnational Holdings, rejected the proposal.
The objection arose after Transnational’s executive chairperson, Nicholas Vingirai, accused EY of omitting critical details about his unresolved dispute with the bank from the annual report.
The clash unfolded during ZB’s annual general meeting (AGM) for the financial year ending December 31, 2024, reigniting long-standing tensions over the bank’s 2007 acquisition of Vingirai’s Intermarket Banking and Insurance Group.
The acquisition was vigorously resisted by Transnational, Vingirai’s investment holding company.
Transnational, through Intermarket, has a long-standing conflict over a shareholding dispute, which has thrown into doubt a planned merger of the group’s two banking subsidiaries, ZB Bank and the ZB Building Society.
During the meeting, EY Zimbabwe, which has served as auditors for ZBFH for two financial periods, sought to extend its terms of service for the bank.
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Normally, the process requires shareholder approval.
This week, sources told the Zimbabwe Independent that veteran banker Vingirai accused EY of failing to exercise due diligence by not ensuring that ZB’s annual report carried a cautionary statement, advising the investing public of the unresolved dispute over the group’s 2007 acquisition of Intermarket.
As a result, Transnational refused to support the reappointment of EY as ZB’s auditors.
ZBFH did not respond to questions from the Independent.
However, the Independent understands that EY told the AGM that the dispute was not a financial matter and therefore it saw no reason to include it as part of the annual report.
Vingirayi told the Independent that it was incumbent upon the auditors to advise the “investing public” of the obtaining situation at ZBFH.
“ZBFH is a listed entity; as such, we owe it to the investing public to inform them of issues of such material nature. This is a material disclosure that the auditors must insist on. I was shocked to hear this from the auditors. I cannot believe it,” Vingirayi said.
Transnational remains a 15,61% shareholder in its original Intermarket Holdings Limited in addition to its 33% shareholding in ZBFH.
Vingirai, whose banking footprints still remain boldly etched in countries such as Ghana and Nigeria, has insisted that, should ZBFH frustrate the 2016 government-brokered settlement, the default position is a de-merger of the group, and, according to him, “all the reason for the need of disclosure of matters of potential consequential impact on investor decisions”.
During the AGM, ZBFH chairperson Agnes Makamure requested Vingirai to give management time to work through the issues and committed to working towards the resolution of the matter.
EY managing partner Nqaba Mkwananzi told the Independent that the auditing firm was not in a position to comment on the internal affairs of ZBFH.
He said: “We take our role of serving public interest seriously in delivering high-quality audits. We do not comment on our clients’ internal matters. At this stage, any questions should be directed to ZB Financial Holdings Limited directly.”