EmpowerBank board chairperson Raymond Njanike’s appointment is mired in controversy after it emerged this week that he and two other top management members disposed of their rights to a banking licence and financially benefitted from the sale before taking over the realm at the bank in flagrant breach of corporate governance.
Twinstock Capital, a company owned by Njanike, Shadreck Mhembere and Vencia Manhando, held a credit only micro-finance licence that enabled the ministry to execute its mandate immediately whilst working towards the establishment of the EmpowerBank, whose registration processes would have taken longer under normal circumstances.
Before the sale, Twinstock directors were Njanike, Mhembere and Manhando.Upon the establishment of Empower Bank, Njanike became the bank’s board chairperson, Mhembere became the head of treasury and Manhando maintained her role as accountant.
The bank was launched by government to support various youth initiatives.Recently, in a factional drama, Zanu PF youths alleged that EmpowerBank was born out of a corrupt licence sale deal to government by Twinstock through former youth minister Patrick Zhuwao, a nephew of former president Robert Mugabe.
Responding to allegations levelled against him by the Zanu PF youths, Njanike this week told businessdigest the disposal of Twinstock was the fastest way for the ministry to get the bank functioning.
“These are frivolous and malicious allegations against Raymond Njanike, the board chairman as due process to acquire the license was followed by the ministry.
The Twinstock Capital credit-only microfinance licence was to enable the ministry to execute its mandate immediately whilst working towards the establishment of the EmpowerBank, whose registration processes would take longer. As the board chairman, Mr Raymond Njanike reported to the then youth minister Zhuwao and subsequent ministers in the same ministry to spearhead the successful establishment of EmpowerBank,” Njanike said.
On the allegation that they were directors of Twinstock, together with Mhembere and Manhando, he said: “This is correct as per Twinstock company documentation. The information was disclosed to Government when the licence was sold by Twinstock Capital.”
Njanike said the concerned youths have not engaged the bank to ascertain the correct facts about developments at the bank.He said the bank was ready to respond to any concerns and requests for clarification from all stakeholders.
The youths insist, among other allegations, that several companies were illegally awarded tenders. Some of the companies that are said to have benefitted from the illegal tenders include Brand Digital, which supplied desktop computers to EmpowerBank and is still supplying computer consumables to the bank.
The company is owned by Mhembere.
Also singled out by the youths are Samanachi-Branding company, which is allegedly owned by Njanike’s close associate, and one MBB which does job evaluations.
Njanike said Mhembere was indeed a shareholder in Brand Digital. He said this conflict of interest was disclosed when he was interviewed for the HOD treasury position.
“Shadreck Mhembere was subsequently declared his interest in the company to the bank. The company supplied desktop computers through an open tender, which was advertised in the press before he was employed by the bank. The then Acting CEO, Mr Wellington Zengeza duly authorised all the transactions. Concerning Samanachi-Branding company, due process was followed when the bank sought an advertising agent to work with,” he said
“The bank flighted an open competitive bidding tender for registration of Advertising Agents and two agents including Samanachi qualified and were subsequently appointed.
The bank was not and is still not aware of the alleged relationship between board chairman and the company owners.“On MBB, the bank flighted a tender for Job Evaluation and MBB won the tender. Due process was followed in awarding the tender and the Finance Director is not in any way related or known to anyone at MBB.”
Earlier this year, Zimbabwe Coalition on Debt and Development (Zimcodd) warned that poor governance and financial malpractices in the country, if not addressed, would exacerbate public mistrust and compromise tax compliance among other issues.