Nyachowe: The Premier Bank deal is illegal. It contravenes the Act.German investment house ADC recently acquired a controlling stake in a US$6 million transaction that saw the Reserve Bank unilaterally fast-tracking the waiver of the country’s controversial black empowerment laws. The deal has opened up a pandora’s box exposing how Zanu (PF) politician and their allies shift goal posts to line their pockets.
The Zimbabwe Mail reported this week that ministers from both the MDC and Zanu (PF) have decided to take the matter up at the next cabinet meeting and Finance Minister Tendai Biti has issued a directive to investigate the manner in which the deal was concluded.
Gono has been a major shareholder in Premier Bank, together with his close ally and sidekick, the former RBZs head of bank licensing, supervision and surveillance, Norman Mataruka, since it started.
Mataruka and Gono each own 25 percent shareholdings and Mataruka’s brother-in-law, who is the Chairman of Premier Finance group ,and holds 3%.
This exposes Gono to conflict of interest as on one hand he is the regulator of commercial banks, yet on the other he is also a competitor with them.
He is represented on Premiers board by his business associate and partner Blazio Tafireyi, who also sits on the board of Financial Gazette, in which Gono has a controlling interest.
According to Zim Mail, Norman Mataruka also has 20 percent stake in NDH Bank Limited (NDH Ltd) against standing bank regulation and general corporate governance rules.
Zimbabwes Banking Act expressly discourages and prohibits RBZ officials from owning shares in allied businesses, which are subject to their routine scrutiny or checks for fear of subjective views on appraisals and other operational issues.
The Premier deal saw PFG and the Frankfurt Stock Exchange-listed ADC obtain a waiver on Harares stringent banking and empowerment policies to allow foreign investors a controlling 54 percent stake in order to facilitate recapitalisation of Zimbabwes financial services sector.
The southern African countrys indigenisation laws restrict foreign companies to a maximum of 49 percent stake of a business with the remainder reserved for Zimbabweans while the countrys central bank has put in place policies to make sure that no single investor will own more than 10 percent shareholding of a financial institution.
But ADC chief executive officer Dirk Harbecke said these policies were waived after they presented their plan for Zimbabwe, detailing a long term road map which will see PFG expanding into the region following consolidation in Zimbabwe.
We have confidence in the new team at PFG and in the potential of the group to grow, he said.
The issue has caused a huge fall-out at the Affirmative Action Group between the empowerment groups president, Supa Mandiwanzira, and AAG chairman for Harare Charles Nyachowe.
Mandiwanzira is arguing that despite the acquisition, the bank will continue to be run by Zimbabweans and the deal will benefit many indigenous businesspeople who will be able to access lines of credit.
On the other hand, Nyachowe is insisting that the holding of the significant chunk by the Germans contravenes the countrys Indigenisation and Economic Empowerment Act .
Mandiwanzira said AAG was always concerned where issues of empowerment are involved. He and Gono are both related to Grace Mugabe, and both have huge influence at the weekly Financial Gazette.
Supa Mandiwanzira said, Our position is that we have raised issues with Premier Bank officials and we engaged them to get an understanding of the nature of the transaction and we were given assurances by the officials that part of the sale agreement of the equity to foreigners allows indigenous people to buy back majority shareholding within three to five years. We have also been assured that the bank will continue to be run by a Zimbabwean management team and board.
Understanding all this we are satisfied that this is a good deal for the bank and for Zimbabweans.
When contacted for comment, Nyachowe said: My position is very clear – the Premier Bank deal is illegal. It contravenes the Act. How can foreigners hold more than 49 percent in a local financial institution? Hatisi kuwirirana mu AAG (we are not in agreement at the AAG) over the approach that some of our members want to employ towards Premier, and that must not be down played.
The law is clear on the quantum of equity that foreigners can and cannot hold. That deal must be investigated and reversed. This is where I differ with Supa. They want to be diplomatic on the matter and have it swept under the carpet when it is very clear that the law was breached in that deal. I will stand up for what I believe and will not be cowed into silence. –
Post published in: Economy