First Bank/Sare in controversial deal


Shakeman Mugari

FIRST Bank Corporation and Southern Africa Reinsurance Company (Sare) are expected to complete their merger in the next four weeks amidst persistent controversy.
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Although the deal is expected to go through without difficulties, sources say the controversy concerning the purchase of Sare shares by one of its two largest shareholders, Smoothnest Investments (Pvt) Ltd, could cast a long shadow over the deal.


Police have also been keeping tabs on the issue. Mutumwa Mawere, who has an interest in First Bank through Zimre, was in February quizzed by police over his involvement in the matter.


Mawere’s affidavit to the police shows that former Labour minister July Moyo was also implicated. Moyo, who had 40 000 shares or 0,03% in Sare, was also quizzed by police for allegedly using his ministry’s funds to guarantee a $1 billion First Bank loan to prominent lawyer Edwin Manikai’s Smoothnest Investments (Pvt) Ltd.


Manikai, a senior partner with Dube, Manikai & Hwacha, has confirmed he controls 50% of Smoothnest, while his nominee, Patrice Dhliwayo, the managing director of Elan Suisse Financial Advisory Services, also holds 50% equity.


Manikai used the controversial First Bank loan to acquire a majority 18,92% shareholding in the Sare through Smoothnest Investments. Manikai could not be reached for comment to shed light on the latest developments as he was said to be in South Africa. In the past he has confirmed his interest in Smoothest.


Sources said a combination of position and shareholding could make Manikai the most powerful man in the new holding company, FBC Holdings Ltd. Manikai is also the chairman of the National Social Security Authority (Nssa), which is set to have a 12,32% stake in the new company.


Records at the Company Registrar’s office indicate that Manikai is also one of the directors of Segmented Investments, which owns 13,67% – expected to be the second highest shareholder of FBC Holdings. He is also expected to control a 3,06% stake in the new company through Smoothnest.


A Zanu PF company, M&S Investments, which now has an 18,92% stake in Sare after shedding part of its equity to Smoothnest, will hold a 3,06% equity. Nssa has an 18,43% shareholding in Sare.

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