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NMB in trouble again

Ngoni Chanakira

DESPITE returning to the black, flamboyant financial services group NMB Holdings Ltd is in trouble again after having been served with summons relating to two alleged illegal dealings in the

foreign currency market.

NMB Holdings chairman and prominent Zanu PF politician Paddy Zhanda this week said the bank had received two notices of the state’s intention to bring court proceedings relating to alleged dealings in the foreign exchange parallel market.

“The allegations are similar in nature to those that resulted in the suspension of the bank’s foreign exchange trading licence in August 2003 for a period of 12 months,” Zhanda said.

“The licence was restored in January after an appeal hearing. Based on legal advice received, the bank intends to defend the proceeds.”

The institution recorded an inflation-adjusted attributable profit of $5,2 billion compared to a loss of $818 million in 2003.

Last year the group blamed runaway inflation, foreign currency shortages and deteriorating balance of payments positions which it said would continue to affect the country’s economy.

National Merchant Bank (NMB) was the first indigenous-owned bank in the country to list on the Zimbabwe Stock Exchange. The group is currently capitalised to the tune of about $25 billion on the stock exchange.

It is also listed on the London exchange.

NMB Bank has been engaged in running battles with the law and last year disposed of its interest in Continental Securities Trading – the group’s stockbroking and asset management subsidiary. The subsidiary contributed negatively to group attributable profit for that year.

Last year NMB’s foreign currency trading licence was withdrawn by the Reserve Bank of Zimbabwe after it was accused of having abused the facility.

Earlier this year four of its directors – managing director Julius Makoni, deputy managing director James Mushore, finance director Otto Chekeche and executive director Francis Zimuto, fled Zimbabwe after being put on the wanted list by the ZRP Fraud Squad.

The foursome, who are understood to be now resident in the United Kingdom, are accused of having externalised foreign currency, a charge they all deny.

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