A MAJOR shake-up is looming at ZB Financial Holdings (ZBFH), with veteran banker Nicholas Vingirai tipped to increase his stake in a deal that would make him the majority shareholder in the listed group and give him a seat on the board.
The deal is part of government’s effort to settle a long running battle stemming from its seizure of Vingirai’s Intermarket Holdings in 2004.
Vingirai is said to have recently bought a 3,22% stake previously controlled by government, increasing his stake to 24,65%. Well-placed sources said the banker could emerge as the largest shareholder in the financial institution under a fresh deal involving the stake held by National Social Security Authority (Nssa).
Nssa, the largest shareholder in ZBFHL with 37,79% shareholding, is selling part of its stake. The pension fund is said to be keen to lower its shareholding in the financial services group to about 26%. Its officials, however, professed ignorance of Vingirai’s interest when asked to comment this week.
Until a fortnight ago, Vingirai controlled 21, 44% shareholding in ZBFH through Transnational Holdings Limited (THL).
But a ZBFH shareholder register this week showed that his stake had increased to 24, 65%, after government sold its shareholding.
A source close to the development said Vingirai could end up controlling 35% shareholding if he acquires Nssa’s stake as planned.
The pension fund this year announced plans to dispose of its shareholding in ZBFH and later told this publication that the ZBFH stake disposal did not involve a monetary transaction.
“I understand that he is supposed to get an additional 10% from Nssa’s 37% shareholding,” a source said.
“This will bring his shareholding to 35%, making him the largest shareholder. Nssa will retain 26% or possibly sell it. This will change the entire executive team just like what happened at CBZ. New shareholders usually bring into companies their own people. The board will also be changed.”
Efforts to contact Treasury officials over the issue were fruitless.
The source said the transaction was aimed at correcting legacy issues, when the Reserve Bank of Zimbabwe took over Vingirai’s Intermarket Holdings in 2004 and later rebrand to ZB.
Authorities said they were trying to arrest a liquidity crunch by bailing out troubled banks at the time. Vingirai contested the takeover of his banking group by the state.
But in 2016 government agreed a deal with Vingirai through which he would receive a 19,9% stake in ZB and be appointed to the board as a non-executive director.
Nssa, however, blocked the appointment and voted for a resolution to instruct THL to repay a US$658 699 dividend that it had received from ZB on January 23, 2017.
Vingirai, who was at the centre of the alleged financial impropriety at the time, was eventually cleared of externalisation charges. Nssa marketing and communications executive, Tendai Mutseyekwa said the authority was not at liberty to disclose who was buying its stake. Commenting on reports of the authority blocking Vingirai comeback, he said appointments to the board were done through a nomination committee and are ratified at AGMs.
“The said shareholder is better placed to answer this question of the implication of Vingirai’s increased shareholding in ZB. Nssa is not aware of any board changes and will, like all other shareholders know about this at the company’s annual meetings. As indicated in our prior responses the authority is not at liberty to disclose the identity of the potential buyers of the stake as this is subject to non-disclosure agreements,” Mutseyekwa said.
Vingirai said it was premature to comment. THL owned Intermarket Discount House, Intermarket Life Assurance, Intermarket Building Society and a considerable equity stake in Mashonaland Holdings.