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Nssa demands ZB board dissolution

We demand that you advise by return and in any event within seven days from the date of this letter that you are complying with the Reserve Bank’s directive and demanding the reimbursement of the said dividend from THL.

AS the battle to wrest control of ZB Financial Holdings (ZBFH) intensifies, the institution’s single largest shareholder, the National Social Security Authority (Nssa), has written to the group demanding the immediate dissolution of the board and repayment of a dividend made to one of the shareholders, it has been established.

By Bernard Mpofu

Nssa is also blocking Transnational Holdings Limited (THL) from acquiring a further 6% shareholding in the banking group.

This comes after THL, led by veteran banker Nicholas Vingirai, rejected Reserve Bank of Zimbabwe (RBZ) governor John Mangudya’s demands over a series of corporate governance issues, a contested senior appointment and controversial payment of a dividend.

With a 26% stake, THL became the second largest shareholder in the group after Nssa’s 37,79% following Vingirai’s victory in a long-running legal battle over shareholding.

Nssa chairperson Robin Vela wrote to ZBFH acting chairperson Peter Nyoni expressing displeasure after THL received a dividend from the group. He also queried a demand by THL to be issued with a further 6% shareholding in ZB on the basis that this is provided for in its purchase-and-sale agreement with the government despite this being opposed in an extraordinary general meeting held 10 years ago.

“I write as a representative of Nssa, a shareholder of ZB Financial Holdings with in excess of a 37% shareholding entitling us to call for an extraordinary general meeting should this be necessary, to express Nssa’s displeasure regarding certain matters relating to ZB, and in this particular instance the following: the payment of a dividend of some US$658 000 to a party who was not on the share register at the cut-off date for shareholders entitled to receive the declared dividend and the ZB board and management’s role in approving the payment of such dividend in circumstances which were irregular and unlawful,” Vela wrote in a letter dated March 10.

“We demand that you advise by return and in any event within seven days from the date of this letter that you are complying with the Reserve Bank’s directive and demanding the reimbursement of the said dividend from THL. We also demand that you confirm within the same period stated in the paragraph above that ZB is not proceeding to issue the 6% shareholding to THL as demanded by that shareholder.”

He said Nssa was also demanding the immediate resignation of ZBFH non-executive directors Mike Mahachi, John Nhavira and Obey Matidzanadzo. Vela also demanded that THL reverse board appointments made to listed property firm Mashonaland Holdings.

“Lastly we also demand your written confirmation that you are taking steps to correct all the anomalies which were pointed out in the Reserve Bank of Zimbabwe’s corrective order including the immediate reversal of Mr Mike Manyika’s appointment as chief operating officer of ZB or participation in the affairs of any of its subsidiaries,” he said. “We would also want to know how you propose to deal with the fine imposed by RBZ regarding his appointment which fine in our view cannot be paid by ZB but those whose ill-advised actions resulted in the company incurring a fine.” In a letter dated March 7 2017 to ZBFH chief executive Ron Mutandagayi, central bank chief John Mangudya raised a chain of issues that he said needed to be urgently addressed, with some of them having a March 31 deadline. However, in a hard-hitting reply exclusively obtained by the Independent this week, Vingirai — insinuating a plot and skulduggery against him reminiscent of the past — virtually dismissed Mangudya on all the issues he has raised.

Vingirai challenged the legality of the central bank directive calling for the stepping down of Manyika. Mangudya had ordered the banking group to pay a fine of US$36 000 (calculated at US$300 per day) and the immediate stepping down of Manyika.

On dividend controversy, the central bank boss said the dividend was declared on May 26 2015 before THL recovered its shareholding from government and hence was fraudulently received. He said the board agreed to a claim by THL shareholders to be paid a dividend for the same financial year before it took control of the shareholding.

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