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ZABG in disregard of regulations

Shakeman Mugari

THE Zimbabwe Allied Banking Group (ZABG) is still hobbled by corporate governance issues ignored by both government and the Reserve Bank of Zimbabwe during its hurried formation earlier this


The latest case involves Richard Makoni, a ZABG board member, and human resource director Phipps Mabika, who are using their company, Lorimak Africa to do consultancy work for the bank.

Makoni owns Lorimak while Mabika is a business partner in the firm.

The two are actively involved in ZABG operations with Mabika engaged as head of human resources while Makoni sits on the board.

Central bank regulations say it is improper for members to provide consultancy services to a bank on whose board they sit. The same guidelines, issued in January, also prohibit senior executives from doing consultancy work for banks in which they are employed.

Lorimak still has a human resources consultancy contract with ZABG. The firm is currently carrying out a job evaluation exercise for the bank despite protestations from workers over conflict of interest at board and management level.

The company also does the payroll for executives and senior managers of the bank. This means that ZABG pays Lorimak consultancy fees and Makoni his director’s fees as a board member. The bank also pays Mabika’s salary even though he is on Lorimak’s payroll as a partner.

The issue has created a rift between senior executives and junior employees at the bank.

Sources say the workers are not happy with Lorimak carrying out the proposed job evaluation saying there is a clear conflict of interest. The workers, sources said, have pointed out that corporate governance issues are being disregarded.

The sources said workers last week grilled Mabika over the issue at a branding workshop at the bank’s headquarters, the Social Security Centre.

The employees have also protested to the board.

“The workers queried how Mabika could remain an employee of ZABG and also retain his post as a partner at Lorimak,” said a source.

The source said the workers asked Mabika why he wanted Lorimak to do the job evaluation when he was an interested party.

“The workers were concerned about transparency. They said by allowing Lorimak to do a job evaluation, the bank was breaching its own principles of good governance which it claimed to stand for,” the source said.

Those who attended the meeting said Mabika responded that he was “only taking orders from the top”.

There are also concerns that allowing Lorimak to do a job evaluation was as good as letting Mabika assess himself because he was also an employee of the bank.

A ZABG spokesperson denied that there were any dealings with Lorimak. Asked why Lorimak was still handling the payroll for the executives, ZABG said the issue was “confidential and not for public discussion”.

On the conflict of interest, the bank said Mabika was a non-executive director of Lorimak and had nothing to do with the day-to-day running of the company while he is employed by ZABG. For Makoni the bank said he was on the board in his “individual capacity”.

The bank has on several occasions breached corporate governance issues.

In January ZABG breached RBZ’s corporate governance regulations when it appointed individuals who were involved in collapsed financial institutions despite a circular prohibiting banks from doing so.

The management is also staffed with people who at one time did consultancy work for the bank.

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