Comment: KML saga: Gono, Biti must remain neutral

RESERVE Bank of Zimbabwe chief Gideon Gono’s involvement in the Kingdom Meikles Ltd fight pitting Nigel Chanakira and John Moxon is suspicious, to say the least. Gono, who has seemed to be neutral during the year-and-a-half old dispute, says he is worried that the fight could knock the public’s confidence in the financial services sector.

Gono said: “Developments at Meikles and Kingdom Bank are worrisome to both the Ministry of Finance and Reserve Bank of Zimbabwe. The disputes have gone on for far too long in a vague and inconclusive way that is not only damaging the two organisations and their respective shareholders but also threatening the stability of the banking sector in particular and the economy in general. Both the Minister of Finance and myself as government  have had enough of this nonsense and are calling on all parties to the dispute to resolve this matter once and for all before the end of this month.”
Since early last year, KML shareholders have borne the brunt of the fight and lost millions in value. KML is now valued at US$88 million and had lost 35% of its year-end value at the time of going to press.  Although shareholders are suffering from negative market sentiment arising from the Moxon-Chanakira fight, Gono’s intervention must be regarded with caution. Where has he been all along? While efforts to expedite negotiations in conflict situations are noble, the intervention of authorities in this instance must be to safeguard the interest of the sector as a whole and not side with any of the feuding parties.
In other words, Gono and Finance minister Tendai Biti should not fight in either Moxon or Chanakira’s corner.  Fairness and equality should be the guiding principles. But judging from Gono and Biti’s statements recently, the two seem bent on intervening on someone’s behalf. Why have Biti and Gono joined hands to settle this fight after  looking on as spectators for almost two years? Could there be an ulterior motive in the duo’s involvement in this purely shareholder conflict? Although it is not in dispute that Chanakira founded the bank, in the world of business, even founders — especially those with little to no shareholding and voting rights — can be booted out. The late LonRho Corporation’s Tiny Rowland is a case in point. That’s business. 
If governments intervened whenever one of its citizens took over a company, then there would no business. After all, Chanakira’s shareholding in Kingdom Financial Holdings was never high and in business, shareholding backed by alliances is everything. It is also important to note that the banker has since last year failed to pay Moxon and Meikles US$22,5 million back in order to finalise the de-merger which the former is demanding. Meikles extended US$22,5 million to Chanakira’s KFHL for statutory capital requirements in happier times. As a result Chanakira would get 43% of KFHL’s total issued share capital.  Against such a background, Gono and Biti must not be seen siding with any of the parties in their roles to mediate.
Gono accused the two of not having clean hands. The matter at hand is not about who has more dirt than the other. Rather, it should be an issue of authorities encouraging and helping the feuding parties to narrow their differences and reach a settlement. By publicly claiming that Chanakira and Moxon’s hands are not clean, Gono missed the point. If authorities cannot deal with the issue fairly, then maybe they have no place running around claiming to be mediators. Should it be proven that Gono and his boss are fighting in one particular corner, then they must relinquish their posts.

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