KINGDOM Financial Holdings Ltd (KFHL) founder Nigel Chanakira has increased his stake in the financial services company to 20% after buying out some of his partners.
Chanakira, former chief executive Lysias Sibanda and chief operating officer Frank Kufa initially held about 30% in KFHL through three investment vehicles, Fornside, Valleyfield and Melboar.
Chanakira in confirming the recent development said: “I can confirm that I am now the largest single shareholder in the Kingdom group.”
He dismissed speculation that he had left to join Econet in Nigeria.
“I am a banker, not an engineer. There has been speculation on my activities,” he said, adding that he had been working closely with management at Kingdom over the last weeks to ensure that Kingdom remained a strong institution during the current banking crisis.
Apart from increasing his shareholding, Chanakira has strengthened the institutional shareholder base by bringing in Econet to take 10% shareholding in KFHL. Meikles already has 25% and Old Mutual has 15%.
“This is a very strong shareholder base,” Chanakira said.
He dismissed speculation that Econet is planning to take over the bank.
“Econet has no interest to go over 25%. They invested on condition that the other big shareholders all stay in. Everyone is happy to have them on board.”
Chanakira is now based in Cape Town. He founded Kingdom in 1996 and turned it into one of the largest financial institutions in the country. The banker is likely to increase his stake in KFHL further when the group’s $100 billion rights issue, which is subject to a shareholder approval, opens in a few weeks time.
The financial services group is engaging in a capital-raising project which is likely to usher in new institutional shareholders.
“A number of measures have been initiated which include the assistance of
major shareholders constituting at least 50% of KFHL’s share capital,” the bank said in a statement.
“Part of this process is the proposal to shareholders on 17 January 2005 to increase the authorised share capital of KFHL. This is the initial step to raise further capital to the extent of $100 billion, which also has the support of the major shareholders and could also include new groupings of shareholders.”
Close ally and long time business partner Sibanda simply said Chanakira wanted more clout in the financial services company when contacted for comment on speculation that he had sold his stake to Chanakira.
He said: “We are investors in a listed company and at the right price someone may sell off his stake.” He added: “From time to time, one looks at his portfolio and rationalises it and as our relationship with Nigel is strong, we sometimes discuss and help each other out.”
Sibanda is now a tobacco farmer and says he is concentrating on his 200-hectare farm. He is also an executive chairman in private companies he would not disclose.