HomeBusiness DigestMuponda in bid to Block CFX Takeover

Muponda in bid to Block CFX Takeover

THE wrangle over the ownership of CFX Financial Services Ltd has taken a new twist with specified businessman Gilbert Muponda seeking to block an extraordinary general meeting that can seal the takeover of the troubled financial institution by a Zambian bank.

Muponda, the fugitive director of the now defunct ENG Capital, through his lawyers Gutu & Chikowero Attorneys-at-law on Monday wrote to CFX company secretary Patricia Ndoro threatening to take legal action against the company if it proceeds with the shareholders meeting on November 12.
CFX, which is currently facing viability problems, reportedly needs a capital injection to meet minimum capital requirements set by the Reserve Bank. The extraordinary general meeting, according to a cautionary statement issued by CFX early this month, would raise share capital by increasing ordinary authorised shares.
“It is of course apparent that our
client will suffer irreparable financial prejudice in the event that the extraordinary general meeting scheduled for November 12 goes ahead before the matter pertaining to the proprietary interest of ENG Capital (Pvt) Ltd is not resolved to the satisfaction of all interested stakeholders,” reads the letter.
“To this extent, therefore, we call upon your office to furnish us with your company’s attitude to our client’s claim; more particularly pertaining to its proprietary interest in the majority shareholding of CFX Financial Services Ltd. We also call upon your company to take immediate measures to postpone the extraordinary general sine die pending the resolution of our client’s claim.”
This development comes barely a month after CFX sought legal opinion from Kantor & Immerman Legal Practitioners over Muponda’s claims that ENG –– which had a substantial stake in Century, predecessor CFX — should stop Zambia’s Finance Bank from the planned takeover of the beleaguered financial institution.
Muponda in correspondence written to Finance Bank in August claimed that he lost Century Bank shares after they were “fraudulently” converted into CFX following Century’s closure. 
CFX lawyers, however, argued that Muponda, who has a warrant of arrest against him in the country, is not eligible to run a business in Zimbabwe following the closure of ENG in 2004.
“In terms of the Prevention of Corruption Act, in particularly Section 10 thereof, Mr Muponda is not able to conduct any material transactions on his own behalf or in respect of any companies that he has invested in or does not enjoy legal standing to institute any legal claim either on his behalf or on behalf of companies in which he may have held shares,” argued CFX lawyers in a letter dated September 17.
The absence of a locus standi, the lawyers further argued, rendered Muponda’s claims a “mirage and a fiction”.
CFX Bank was formed after a merger between CFX Financial Services (CFX) and Century Holdings Ltd in 2004.
The bank was placed under the management of a curator in December 2004 following a banking crisis triggered by a liquidity crunch that resulted in the collapse of at least 15 financial institutions in the country. The curatorship was later lifted by the central bank.


Bernard Mpofu

Recent Posts

Stories you will enjoy

Recommended reading