Showdown looms over FNBS

Ndamu Sandu

A SHOWDOWN looms over control of First National Building Society (FNBS) amid revelations that one of the institutional investors, Zimnat Life Assurance Company Ltd, is eyeing a controlling stake

in the society.


Founding directors, managing director Samson Ruturi and finance director Nicholas Musona, out of custody for allegedly defrauding the society, have vowed not to cede the society.


“We will not surrender the company to anyone,” Ruturi said.

FNBS was placed under a curator after Ruturi and Musona – with a combined shareholding of 89,74% – were arrested for allegedly defrauding the society of $1 billion.


Banking sources said FNBS general manager Morgan Moyo and company secretary Gerald Mlotshwa are allegedly behind Zimnat’s mano-euvres.


Documents in possession of businessdigest show that Zimnat, which has a 4,40% equity, is gunning for more than 65% stake to become the majority shareholder in the holding company, First National Holdings Ltd (FNHL).


In a letter dated March 10 2003, to FNHL chairman Michael Mahachi, Zimnat’s managing di-rector George Dikinya wrote that Zimnat was prepared to recapitalise FNBS.


“We advise that Zimnat Life Assurance Company Ltd is prepared to recapitalise First National Building Society through its holding company, First National Holdings Ltd, in the amount of $1 billion,” Dikinya said.


He said that the injection of the money would result in a shareholding level of not less than 65% of the issued shares in FNHL.


In another letter dated October 10 2003 addressed to the Promoters of Alliance Building Society directors Morgan Moyo and Gerald Mlotshwa, Dikinya confirmed that Moyo and Mlotshwa had shown an interest in FNBS.


“We can confirm that you have expressed an interest in taking up a shareholding in FNBS which is currently under a curator.


In this regard, we can also confirm that you have approached us for a possible funding in an amount aggregate to 25% of the issued and paid up share capital in the society after its recapitalisation,” Dikinya said.


“We confirm that the company is willing to provide such funding, but subject to, and conditional upon, Zimnat itself agreeing to recapitalise the society.”


“In other words, if Zimnat does not wish to follow any rights granted to it in terms of a private placement for the recapitalisation of First National Building Society, it shall not, in any way whatsoever, be obliged, nonetheless, to provide funding to yourself or your investment company,” he said.


Moyo distanced himself from the letters.


“I don’t know anything about that. Talk to Scott or the Reserve Bank about that,” he said.


Dikinya was said to be on leave and would be back in office in two weeks time.