KINGDOM BANK LTD founder Nigel Chanakira says he is not stepping down from the board of AfrAsia Kingdom Holdings Ltd, the holding company that controls the bank.
His comments come in the wake of speculation in the market that he is stepping down from the board of the company amid talks the relationship with his partners –– AfrAsia Ltd –– could have soured after the bank was forced to write-off part of the US$21 million bad loan.
Said Chanakira: “As for your question on whether I am leaving AfrAsia, I would like to inform you that I don’t work for AfrAsia. My family is still a significant shareholder in AfrAsia Kingdom Holdings Ltd in which we intend to remain invested. If and when we decide to sell, normal shareholder and board approvals would be followed.”
Market speculation is rife Chanakira, who sits on the board of AfrAsia Kingdom Holdings Ltd, could be on his way out.
As a golden handshake, it is said Chanakira will get the financial services group’s microfinance business, Micro King.
However, Chanakira refuted the claims, saying he is a significant shareholder in the group.
“I remain an active significant shareholder and non-executive director in the group alongside our other partners AfrAsia Bank Ltd. I co-founded Kingdom Bank in which I have and continue to have interest to ensure its stability and growth,” he said.
“I, together with other shareholders and management in the group, have been involved in initiatives to capitalise the group. Such initiatives have and continue to include looking at all options on the structure of AfrAsia Kingdom Zimbabwe, and appropriate announcements will be made shortly in this regard.”
Commenting on the controversy that has dogged his bank relating to the takeover of mobile phone operator Valley Technologies early this year, Chanakira said the decision to lend to Zach Wazara’s company was above board, adding the creation of the Lalela structure, which saw the bank converting debt to equity, was not his initiative.
“The Lalela structure was created as part of an attempt by a sub-committee of the Kingdom Bank board, and not me, to find a solution to a non-performing loan,” Chanakira said.
“My involvement on and in this structure was at the request of the KBL Board, who were ultimately the final authority in endorsing the structure that you seem to imply was a personal initiative
“It is therefore unfortunate, if not defamatory unless there is proof to the contrary, that I attempted to “hide” the loan. Because of normal banking practice, as well as regulatory oversight on such loans, it is impossible, if not conceivable, for a non-executive director to hide the biggest loan on the bank’s books which received Exchange Control approval.”
Things came to a head after Wazara wrote a damning letter to the Reserve Bank of Zimbabwe claiming Chanakira had attempted to conceal a loan from the regulator by creating the Lalela structure, a charge Kingdom Bank founder denied.
The Postal and Telecommunications Regulatory Authority of Zimbabwe cancelled Valley Technologies’ operating licence for failure to fulfil the regulator’s conditions, spectrum and number fees, among other issues.
Nigel Chanakira brief biography
Chanakira founded Kingdom Bank in 1994 with four business partners and grew it from humble beginnings to a leading indigenous financial services group.
They successfully merged Kingdom with The Discount Company of Zimbabwe in 1999 to secure its listing on the Zimbabwe Stock Exchange and then acquired a stake in a foreign exchange bureau before merging with Meikles Ltd in 2007 to create one of Zimbabwe’s largest companies.
However, Chanakira was forced to step down from his role of Kingdom Meikles CEO in October 2009 after a fierce fight with his chairman John Moxon, who represents the interests of the Meikles family.
Chanakira successfully de-merged Kingdom from the Kingdom Meikles group in 2011 and through his family trust is now a major shareholder in AfrAsia Kingdom Holdings Limited.