BARCLAYS Bank Zimbabwe (BBZ) has forced out its managing director George Guvamatanga, sending him packing with a modest US$354 000 exit package as the new majority shareholder First Merchant Bank (FMB) of Malawi flexes its muscle, it has been established.
By Bernard Mpofu
The bank’s chief finance officer, Sam Matsekete, is currently acting MD. Guvamatanga, appointed MD in 2008, had been with the bank for 28 years.
According to a letter written by BBZ chairperson Anthony Mandiwanza, the board resolved to retrench Guvamatanga.
“We refer to the above matter (Notice of intention to retrench) and advise that the employer has resolved to retrench you from employment effective October 31 2017. Your name accordingly appears on the Notice of Retrenchment which is attached to this letter with the reasons thereof. The notice will also be served on the Retrenchment Board,” wrote Mandiwanza in a letter dated October 24.
“Your individual gross retrenchment package, calculated based on your gross monthly salary of US$16 666,67 and be paid to you upon your retrenchment subject to any taxation, shall be the total gross sum of US$354 293,37 . . .
Kindly note that effective the moment you receive this letter, you will be forthwith required to handover any and all property in your possession belonging to the employer.”
According to annexures attached to the letter “the employer has reorganised and requires new management team with different wage and skill structure than the current one”.
“Additionally, the employer intends to merge and/or separate certain positions and duties in its management and in respect of the head of the organisation, which may include but not limited to abolishing the managing director position for a different model.”
After fending off 24 takeover bids to seize control of majority shareholding in Barclays Bank Zimbabwe, FMB is planning to set up a new group to be dual-listed on the Malawi Stock Exchange and Mauritius Stock Exchange, as it consolidates its presence in the southern African market.
The retrenchment board confirmed Guvamatanga’s exit in a letter dated October 30, a decision that was immediately challenged by his lawyers.
“It is hereby notified that the Retrenchment Board has in terms of the Labour Act Section 12C (2) considered and confirmed the proposal of Barclays Bank Zimbabwe Limited,” the board wrote.
In a letter dated November 6, Guvamatanga, through his lawyers, Manokore Attorneys, questioned the reasons for the retrenchment.
“In light of the Retrenchment Board’s decision to confirm our client’s retrenchment, we hereby request the following:-the reasons for our client’s retrenchment. Our client is entitled to the same in terms of Administrative Justice Act; and a copy of the minutes of the meeting of the retrenchment board whereat the board sat and considered our client’s case,” the lawyers wrote.
On November 1, the Retrenchment Board responded to Guvamatanga’s lawyers, saying the board had confirmed the retrenchment.
“Any issues arriving put of the negotiation process please follow the dispute resolution system,” the board wrote.
BBZ was established in 1912, and has operated in the country continuously since then, making it a landmark feature on the local financial services landscape.
The bank, listed on the Zimbabwe Stock Exchange, has over 1 000 employees and a countrywide network of 38 branches in main urban areas.
Barclays Bank Plc, which held 67,68% shareholding in the local unit, last year announced it was disposing of its African assets, including in Zimbabwe, to focus on British and American markets.
The remaining 32% of Barclays Bank of Zimbabwe’s shares are traded on the local bourse. Barclays Bank Zimbabwe, alongside the Egyptian business, was not part of the 2013 deal that saw Barclays Africa, formerly Absa, acquire eight African operations from its parent company due to high local political risk.
Msasa Capital, a private investment and advisory firm fronted by ex-Investec executive Richard Honey and Border Timbers shareholder Heinrich von Pezold, was tasked by senior BBZ management to draft the takeover proposal to Barclays Plc. The management buyout failed after Barclays Plc chose FMB to take over the bank.
On May 30, Barclays Bank Plc, which held 67,8% shareholding in the local unit, signed a binding sale and purchase agreement with FMB Capital Holdings for the sale of Barclays’ majority interest in Afcarme, which controlled the local unit.
The transaction is structured in three phases — transfer to trust, initial Afcarme transaction and subsequent Afcarme transaction.
Meanwhile, the bank’s employee share ownership trust has written to the Reserve Bank of Zimbabwe asking for a 5% incentive after Barclays Plc awarded a US$2,5 million closing bonus to local workers.