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Heads to roll at ZB

Management changes are looming at ZB financial Holdings (ZBFH) after the National Social Security Authority (Nssa) and the second largest shareholder in the financial services group, Transnational Holdings Ltd (THL), agreed the changes, although insiders say the reshuffle would not be rushed.

By Chris Muronzi

Businessman Nicholas Vingirai
Businessman Nicholas Vingirai

A source close to the developments at ZB told businessdigest this week that Nssa and THL are looking at restructuring management at ZB to steer the banking group into new territory. However, insiders say the shareholders are of the view that the changes should neither disrupt the business nor be done “carelessly.”

“We want to ensure that there is value in the investment. We are not rushing to implement changes to the management team. We have allowed ourselves time for a smooth transition,” a source said.
“But effectively, changes are coming.”

Another source said THL feels there is a need to safeguard its ZBFH investment.

Although Nssa and Old Mutual traditionally take a back seat and let management run the business, the sources said both shareholders want to see transformation at the group.

“They are happy that Transnational have a proven track record in banking,” one of the sources said.

Nssa has of late been taking an active approach in companies it is invested in. Nssa chairman Robin Vela last year said the fund would reconstitute boards and management of investee companies as the pension fund seeks to give shareholders a return on their investment.

In an interview last year, Vela said boards and management of companies the fund is invested in that are performing dismally will be reconstituted and replaced with competent individuals.

“Where there is evident failure of the board, we will absolutely see board changes. We also want to see management changes in companies where there is evidence of failure,” he told businessdigest last year. “But there are companies we are invested in such as FBC and Seed Co, who have paid dividends to us. Those obviously are exceptions. This is not business as usual as Nssa has to be about delivering value for the fund and the contributors.”

However, Vela yesterday said shareholders do not get invlolved in management changes although we have our appointees on the board to insure that our interests are looked into. We let the company run the bank but obviously we would want competent people who add value and have good governance. He also confirmed that Nssa had to engage Vingirai to cultivate relations after he had gotten his shares.

“We initially did not want to have our shares diluted but after government gave him the shares we had to engage him to make sure he had no management ambitions and would allow  the smooth running of the bank,” he said.

Another source added that although Transnational has relevant banking experience, it was not going to manage the banking group.

“They can’t manage, but they will have an active management role in terms of direction the group would take. We feel that there is enough depth in the group,” said a source. The source said the changes would happen at the very top, but said there was no need to head hunt a new leader of the banking group, given the depth of skills.

“There is obvious need for re-orientation of the group. We feel that there is sufficient depth to steer the group forward. What is required is a new vision. The changes will be more at visionary level and few others,” a person close to the plans said.

A source told businessdigest last week that the changes could be done in the next 12 to 24 months. Vingirai earlier this year reclaimed 26% of the financial services group’s total issued share capital.

According to people close to the developments, Transnational Holdings Ltd (THL), Vingirai’s investment vehicle, seconded people to the board of ZBFH about two months ago. Vingirai, Mike Mahachi and Zororo Muranda are now representing the interest of THL on the board.

Peter Nyoni is currently acting chairperson of the group. Another board member, Tunde Akareli, is said to have been appointed three or four months ago before THL moved in.

THL is the second largest shareholder in the group after the National Social Security Authority at 37,79% shareholding.

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