Boardroom manoeuvres spawn trouble at FNBS

Ndamu Sandu

BOARDROOM manoeuvres could have contributed to the storm brewing at the troubled First National Building Society (FNBS), it emerged this week.



Helvetica, sans-serif”>FNBS was placed under a curator last year after the two founding directors – managing director Samson Ruturi and finance director Nicholas Musona – were arrested for allegedly defrauding the society of $1 billion.

The duo has a combined equity of 89,74%.


Industry sources said this week two camps had emerged within the holding company First National Holding Ltd (FNHL), one with chairman Michael Mahachi, FNBS general manager Morgan Moyo and company secretary Gerald Mlotshwa and the other with Ruturi and Musona.


“Mahachi, Moyo and Mlotshwa were working behind the scenes to wrestle the society from Ruturi and Musona,” said a source.


Investigations by bu-sinessdigest this week revealed that knives were out in the society even before it was placed under a curator.


In a letter dated January 14 2003 to the director of Banking Supervision and Surveillance at the Reserve Bank of Zimbabwe (RBZ), Steven Gwasira, FNHL chairman Michael Mahachi wrote that Ruturi and Musona had agreed to sell their shareholding in FNHL.


“Messrs. Ruturi and Musona collectively hold 89,74% of the issued and paid up shares of FNHL. They have agreed to sell their entire shareholding to management as represented by Messrs Moyo and Mlotshwa, at a fair value. Total proceeds, approximately $1 billion, will be used to liquidate a portion of their (Musona and Ruturi) indebtedness to the society.

Management will, within 12 months sell a portion of their shares. The proceeds will repay the financiers. It will also reduce management’s shareholding to about 25%,” Mahachi said.


Sources say this had aggravated problems that had been experienced at the society in the past three years.


They said minority shareholders were calling on the majority shareholders to reduce their equity to 55%.


“The central bank has been putting relentless pressure on FNBS majority shareholders to scale down their shareholding,” said a source.


Ruturi this week confirmed that relentless pressure was put on them to reduce their shareholding in First National Holdings Ltd (FNHL).


“Pressure from the central bank was simultaneously followed by demands from a certain consortium of financial institutions headed by National Social Security Authority (NSSA) brokered by a certain commercial bank linked to this consortium,” he said.


“We resisted this demand and correspondence is available to this effect.”

Mahachi said this week he was not interested in taking over the reins at FNBS.


“I have never wanted a bank and I was just helping them,” he said.

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