Fraud by Raymond Njanike,Farai Rwodzi & Interfin Bank against ENG Capital cant go undocumented - 5 of 5
by Gilbert Muponda on Thursday, November 25, 2010 at 4:35pm
The fact that Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation continue to mislead investing public and regulatory authorities about the legality of thier illegal action shows fraudulent intent on the part of Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation.
At law generally Innocent misrepresentation (Derry v. Peek)occurs when the representor had reasonable grounds for believing that his or her false statement was true.Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation have been advised and warned that their take over over Century/cfx Bank was illegal and irregular and is being challenged in high court under high court case HC-6244-04.Below is a related and relevated case which Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation must read ,study and learn from.
"The case of Invertec Limited v. De Mol Holdings BV (1) and Henricus Albertus De Mol (2) provides useful guidance on the circumstances in which a purchaser can make a claim for fraudulent misrepresentation under a share sale and purchase agreement. Invertec (the claimant) and De Mol Holdings BV (DMH) entered into an agreement (SPA) for the sale and purchase of the entire issued share capital of Volante Public Transportation Interior Systems (Volante). Mr De Mol was a director of DMH and its sole shareholder.
Although the transaction only completed on 6 October 2005, Invertec had, by the end of October 2005, injected a further £270,000 into the company to keep it afloat and by the end of December 2005, this figure had increased to £532,000. Volante was eventually placed in to administration in December 2006. Invertec commenced proceedings claiming that it had been induced to enter into the transaction by a number of fraudulent misrepresentations made by DMH and Mr De Mol which subsequently became warranties in the SPA.
The alleged fraudulent misrepresentations were as follows:Volante's management accounts for July and August 2005. Invertec alleged that, contrary to DMH's warranty, the monthly management accounts disclosed to them were not prepared in good faith nor on bases consistent with the management accounts for the year ended 30 June 2005.
The High Court upheld this claim on the basis that Mr De Mol and his financial advisor, Mr De Wit, had clearly altered the bases of the July and August accounts by re-classifying 'factored' sales as 'in-house' sales - the effect of which was that Volante's results were more consistent with the sales projections in the budget provided to Invertec.
No disclosure as to the reclassification of sales in the management accounts was made to Invertec.Volante's solvency. In the SPA, DMH warranted that Volante was not unable to pay its debts within the meaning of section 123 of the Insolvency Act 1986. Invertec claimed that in fact, Volante was unable to pay its debts as at 6 October 2005, that DMH knew this before entering into the SPA and that such warranty was false and dishonestly made.
DMH contended that the true construction of the warranty was that it was "merely a warranty that it has not been proved to the satisfaction of a court that Volante is unable to pay its debts as they fall due". The judge disagreed and in upholding Invertec's claim, stated that such a construction "would substantially deprive the warranty of effect and would make no commercial sense".Volante's corporation tax liability with regard to the financial year ended June 2004.
DMH had represented that this sum was lower than it actually was and had failed to make any disclosure against the relevant warranty in the SPA. The judge upheld the claim on the basis that the representations made by DMH that Volante was up-to-date with its corporation tax payments were false and dishonestly made.A contract with one of Volante's customers, Alstom, was loss making and contrary to DMH's warranty that it was not party to any loss-making contracts.
This claim was rejected by the judge on the basis that DMH had disclosed that this contract had been historically unprofitable and would continue to be so unless its terms were re-negotiated.In determining damages, the judge rejected DMH's argument that claims framed by reference to warranties in an SPA should be treated as a breach of contract only and not as misrepresentation. Importantly, the aggregate liability cap of DMH in respect of claims under the SPA (which was limited to the amount of consideration received by them) was held not to apply as there had been deliberate concealment by both DMH and Mr De Mol.
As such, Invertec were entitled to be put back into the position it would have been had the false representations not been made - Mr De Mol was ordered to pay £1,512,113 in damages which represented the initial consideration under the SPA and also a further £532,000 and €216,000 in respect of the successful solvency and corporation tax claims. The rationale for Mr De Mol being personally liable for Invertec's loss was that the fraudulent misrepresentations were largely made by him; he was the sole negotiator for DMH and had signed the transaction documents.
Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation Directors should be aware that even if they are not the selling party to an agreement, any false representations or warranties which they make to a potential purchaser and which have been made knowingly, without belief in their truth, or recklessly, may result in them being personally liable to the purchaser for fraudulent misrepresentation.As was the case above, a successful claim for fraudulent misrepresentation will often serve to extinguish the operation of any limitation of liability clauses negotiated in an agreement.
As such, the importance of the disclosure process in a sale and purchase transaction cannot be overstated; honest, accurate and detailed disclosures will either prevent a fraudulent misrepresentation or warranty claim being made or, as was the case with the Alstom contract above, provide the basis of a successful defence to a warranty claim.Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation must be advised of their continued misrepresentation to shareholders,regulators and investing public constitutes a serious offence."
Fraud by Raymond Njanike,Farai Rwodzi & Interfin Bank against ENG Capital cant go undocumented - 4 of 5
by Gilbert Muponda on Tuesday, November 23, 2010 at 10:21pm
At law generally Innocent misrepresentation (Derry v. Peek)occurs when the representor had reasonable grounds for believing that his or her false statement was true.Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation have been advised and warned that their take over over Century/cfx Bank was illegal and irregular and is being challenged in high court under high court case HC-6244-04.
The fact that Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation continue to mislead investing public and regulatory authorities about the legality of thier illgal action shows fraudulent intent on the part of Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation.
In this article I have borrowed liberally from Wikipedia on seeking to unpack the illegal actions by Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation .
Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation actions on Century/CFX Bank leaves a lot to be desired especially given how they have tried to conceal Interfin's illegal and corrupt take over of Century/CFX Bank.In any business it is normal to make a mistake in terms of judgement or at times to act without full information.Inititally Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation could be excused on the assumption that they were not aware of what was happening on the illegal take over of Century/CFX Bank.
Instance of false statement where (1) the party making the statement is aware that it is false or disregards the possibility of it being false, (2) the party making the statement does so to induce another party to enter into a contract, and (3) the other party enters the contract as a result of the statement and consequently suffers a loss.Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation are making false declarations to mislead investing public and regulatory bodies.
Fraudulent misrepresentation occurs when one makes representation with intent to deceive and with the knowledge that it is false. An action for fraudulent misrepresentation allows for a remedy of damages and rescission. One can also sue for fraudulent misrepresentation in a tort action. Fraudulent misrepresentation is capable of being made recklessly
According to Wikipedia Negligent misrepresentation at common law occurs when the defendant carelessly makes a representation while having no reasonable basis to believe it to be true. This type of misrepresentation is relatively new and was introduced to allow damages in situations where neither a collateral contract nor fraud is found. It was first seen in the case of Hedley Byrne v Heller [1964] A.C. 465 where the court found that a statement made negligently that was relied upon can be actionable in tort.
"Distortion of FactA representor may make a statement which prima facie is technically true; however this may tell only half the story. If a statement of fact is made but the representor fails to include information which would significantly alter the interpretation of this fact, then a misrepresentation may have occurred. In Krakowski v Eurolynx Properties Ltd (1995) 183 CLR 563, " This is exactly what Interfin and its Directors have been doing regarding CFX Bank.
"Learned FalsityThe negotiating stage of a contract can be a time consuming process. Because of this, new information may arise and circumstances may change. This can result in two situations which can result in a misrepresentation if silence is kept. The first is if the representor subsequently discovers that the statement was false, the second being if the statement becomes false at a later time. If a statement is made and it is subsequently made known to the representor that it is false, it would obviously be inequitable to allow the representor to remain silent with the new information.
In Lockhart v. Osman [1981] VR 57, an agent had advertised some cattle as being "well suited for breeding purposes". Later on it was discovered that the stock had been exposed to a contagious disease which affected the reproductive system. It was held that the agent had a duty to take remedial action and correct the representation. The failure by the agent to take such measures resulted in the contract being set aside.
Should a statement be made which is true at the time, but subsequently becomes untrue due to a change in circumstances, the representor is obligated to amend the original statement" At the start one could have assumed that Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation were not aware of their illegal actions but now that High Court case HC-6244-04 has been brought to their attention they are now liable for any other statement sthey may make on CFX Bank which seek to justify their illegal and corrupt actions.
This is the relationship that Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation have to the shareholders and general investing public "Fiduciary Relationships - A fiduciary relationship is one of trust and confidence; it involves one party acting for the benefit of another. For this reason, when entering into a contract, it is important for a fiduciary to disclose all facts which could be considered material even if not expressly asked about.[5] In Lowther v Lord Lowther (1806) 13 Ves Jr 95, the plaintiff handed over a picture to an agent for sale. The agent knew of the pictures true worth yet bought it for a considerably lower price.
The plaintiff subsequently discovered the pictures true worth and sued to rescind the contract. It was held that the defendant was in a fiduciary relationship with the plaintiff and accordingly assumed an obligation to disclose all material facts. Accordingly the contract could be rescinded." Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation are expected to act in proffessi9onal manner to safeguard investors and shareholders yet they continue to mislead and misrepresent thereby breaaking their fiduciary dutiesAccording to Wikipedia "Contracts 'Uberrimae Fidei'A contract uberrimae fidei is a contract of 'utmost good faith'.
Similarly to fiduciary relationships, the parties are required to make known all material facts influencing the contract. Contracts uberrimae fidei usually arise when one party has knowledge which the other does not have access to. Contracts which are commonly considered to be of such a nature include contracts of insurance and family agreements. When applying for insurance, the person or entity must disclose all material facts so that the insurer can properly asses the risk involved with the offering of insurance.
Since the insurer cannot have access to all information relating to the insured and their situation which could affect the risk involved, it is necessary for this disclosure so that both parties are entering into the contract on equal grounds. Lord Blackburn addressed the issue in Brownlie v Campbell (1880) 5 App Cas 925 when he noted "...the concealment of a material circumstance known to you...avoids the policy"
This is true in as far as Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation are misleading shareholders and potential shareholders to buy Interfin Banking Corporation shares fully aware of the implications of High court case HC-6244-04 which wiill leave Interfin Bank a mere shell.
Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation are breaking various laws and regulations in their defiance of common sense.As Directors of a Public Compnay and Financial Institution they have Fiduciary responsibilities under the Companies Act,The Zimbabwe Stock Exchange Act ,The Banking Act and The Reserve Bank of Zimbabwe Act.They are breaking all those acts whilst defending a looted asset which was fraudulently seized from ENG Capital.
Fraud by Raymond Njanike,Farai Rwodzi & Interfin Bank against ENG Capital cant go undocumented - 3 of 5
by Gilbert Muponda on Sunday, November 21, 2010 at 10:11am
Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation actions on Century/CFX Bank leaves a lot to be desired especially given how they have tried to conceal Interfin's illegal and corrupt take over of Century/CFX Bank.
In any business it is normal to make a mistake in terms of judgement or at times to act without full information.Inititally Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation could be excused on the assumption that they were not aware of what was happening on the illegal take over of Century/CFX Bank.
However when it becomes clear that the Bank has been invloved in an illegal and irregular transaction there is no excuse for Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation to proceed and manupoulativley convince their lawyers such as Mr Stanford Moyo to issue a legal opinion that would attempt to conceal and hide the initial fraudulent conversion of Century Bank into CFX Bank then Interfin Banking Corporation.
Such actions are illegal and fraudulent.Once Directors become aware of an illegal and irregular transaction they have an obligation to try and resolve the matter as amicable as possible.There is normally no need for bravado as is being displayed by Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation .Such arrogance and bravado only serves to complicate the situation as it becomes necessary to investigate whether the initial transaction was a mistake or Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation in fact connived to defraud ENG Capital of its 309 million shares in Century/CFX Bank valued at US$ 15.4 million
Directors of a Bank are supposed to be people of unquestionable honesty and integrity.They have serious responsibity to the investing public and to regulatory authorities who entrust them to do the right,legal things at all times in addition to being honest about any activities the Bank may undertake.The defiance of logic by Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation in light of overwhelming evidence that Interfin are in possession of a stolen asset only brings into question the intergrity of Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation According to recent press reports Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation had managed to to mislead regulatory Authorities such as the Reserve Bank and Ministry of Finance to approve their fraudulent take over of Century/CFX Bank.
This fraudulent transaction is still being challenged in court under high court case HC 6244-04.Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation are breaking various laws and regulations in their defiance of common sense.As Directors of a Public Compnay and Financial Institution they have Fiduciary responsibilities under the Companies Act,The Zimbabwe Stock Exchange Act ,The Banking Act and The Reserve Bank of Zimbabwe Act.They are breaking all those acts whilst defending a looted asset which was fraudulently seized from ENG Capital.
Fraud by Raymond Njanike,Farai Rwodzi & Interfin Bank against ENG Capital cant go undocumented - 2 of 5
by Gilbert Muponda on Saturday, November 20, 2010 at 6:57pm
According to recent press reports Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation had managed to to mislead regulatory Authorities such as the Reserve Bank and Ministry of Finance to approve their fraudulent take over of Century/CFX Bank.This fraudulent transaction is still being challenged in court under high court case HC 6244-04.
The current Interfin Banking Coroporation (IBC) is a fraudulent result from the illegal and irreugular conversion of Century Bank into CFX Bank then Interfin Banking Corporation.The fast and swift Bank name changes over a very short period clearly show an attempt to conceal the illegal and fraudulent seizurwe of Century Bank which was rebranded CFX Bank.
CFX bank was further rebranded into Interfin Banking Corporation as a way to hide the illegal conversion of 309 million Century Bank shares belonging to ENG Capital which were illegaly and corruptly converted to CFX Bank.
Since the 309 million belongong to ENG Capital were illegally and corruptly converted into CFX Bank then Interfin Banking Corporation ENG has a legitimate and indisputable claim of $ 15.4 million against Interfin Holdings Zimbabwe being the 309 million shares multiplied by $ 0.05 per share.this claim is premised on the high court case HC-6244-04 which is currently before the High Court of Zimbabwe.
Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation have been busy grand standing and misleading regulatory authorities using various legal and illegal tactics.These include manupulating the press and legal advisors into making suspcious legal opinion which are based on incompletew and at times totally false information.
Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation must be made awre its a crime to mislead investors into buying shares whilst withholding material information.This is a serious offence which undermines investor confidence in Zimnbabwe's financial and banking system.Its totally unheard of for a Managing Director and his Chairman to be stepping over each other to make false and misleading information whilst hiding the truth as Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation have been doing over the last few months.Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation are breaking various laws and regulations in their defiance of common sense.
As Directors of a Public CompaNy and Financial Institution they have Fiduciary responsibilities under the Companies Act,The Zimbabwe Stock Exchange Act ,The Banking Act and The Reserve Bank of Zimbabwe Act.They are breaking all those acts whilst defending a looted asset which was fraudulently seized from ENG Capital.
Fraud by Raymond Njanike,Farai Rwodzi & Interfin Bank against ENG Capital cant go undocumented - 1 of 5
by Gilbert Muponda on Thursday, November 18, 2010 at 7:55pm
The Herald Newspaper this week reported that Raymond Njanike ( Interfin Bank MD) ,Farai Rwodzi ( Interfin Chairman) and Interfin Banking Corporation had managed to to mislead regulatory Authorities such as the Reserve Bank and Ministry of Finance to approve their fraudulent take over of Century/CFX Bank.This fraudulent transaction is still being challenged in court under high court case HC 6244-04.
Farai Rwodzi,Raymond Njanike and Interfin banking Corporation owe are fully aware that their taske over of Century.CFX Bank was fraudulent therefore its null and void.In addition its a mind boggling puzzle how individuals who claim to be Bankers can go ahead and "take over" a Bank whose ownership is already being challenged in Court under HIGH court case HC-6244-02 .
Such actions are clearly fraudulent as Interfin are now trying to rebrand the Bank and strip assets whilct the case is still pending before the courts.Their aim is to mix up assets until they cant be identified or traced theby allowing them to get away with the fraud and conceal their illegal actions.Farai Rwodzi and Interfin owe $ 15.4 million being the value of the fraudelently acquired 309 million shares at the share value of $ 0.05 per share.
This claim is indisputable since Interfin were fully aware of the legal proceedings regarding these shares before their purported "acquistion" of Century/CFX Bank.Instead of continueing to mislead investing public,depositors and regulatory approvals about their fraudulent activities Interfin should be focused on raisning the $ 15.4 million which they owe me and my Company ENG Capital for the 309 million shares at $ 0.05 per share.
Interfin Bank, Raymond Njanike and Farai Rwodzi have been manupulating their lawyers Mr Stanford Moyo and Mr Addington Chinake by giving them false and incomplete information about their illegal and irregular acquistion of CFX/Century Bank.In turn these reputable lawyers were duped into issuing legal opinion which they wouldnt have issued had they known the full facts such as the High Court case HC-6244-04.
In addition Farai Rwodzi,Raymond Njanike and Interfin Bank have proceeded to mislead regulatory Authorities into approving a fraudulent transaction which is being challenged in court.Such actions of deliberately misleading a regulatory body are illegal and fraudulent.These actions endangers the survival of Interfin and potentially puts investor funds into jeorpady once the regulators discover that their approavals were obtained based on false and incomplete disclosure of information.
Interfin Bank Holdings share price should reflect ENG Capital claim Part 1 of 5
by Gilbert Muponda on Monday, October 25, 2010 at 11:29pm
Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. Interfin Banking Corporation Zimbabwe misled Interfin Banking Corporation Zimbabwe's investors about the risks and credit quality of its shares by misleading their lawyer Mr Sternbford Moyo into issuing a legal opinion which totally ignored High Court Case HC-6244-04
Interfin Banking Corporation Zimbabwe is a product of a fraudulent merger between Century Bank and CFX Bank which was subsequently renamed Interfin Banking Corporation after another irregular merger between Century/CFX Bank and Interfin Bank Zimbabwe.
The misleading communications to investors related to the effect of the turmoil related to the $ 15.4 million claim for the 309 million Century shares which were fraudulently converted into Century/CFX Bank shares then into Interfin Bank shares. Investors are not being told the impact of High Court Case HC -6244-04 . The full founding affidavit for High Court Case HC-6244-04 is found here
http://www.facebook.com/album.php?aid=2059705&id=1393181020
All these "fake mergers" were designed with the intention of concealing the initial fraudulent transfer of 309 million Century shares illegally and irregularly transfered into Century/CFX Bank then Interfin Banking Corporation. This illegal transfer is being challenged through High court case HC-6244-04.
ENG Capital and myself are claiming US$ 15.4 million being the 309 million shares multiplied by the share price of $ 0.05 which give the claim total of US $ 15.4 million. Accordingly the share price and market value of Interfin Bank Holdings should be adjusted to take into account of this indisputable claim of $ 15.4 million which Interfin has to settle.
According to Wikipedia below are some of the factors which the share price and value of a company must factor into. One should consider Interfin Bank's Management poor judgement in "merging" with Century/CFX Bank which has litigation under High Court Case HC-6244-04
In economics and financial theory, analysts use random walk techniques to model behavior of asset prices, in particular shareprices on stock markets, currency exchange rates and commodity prices. This practice has its basis in the presumption that investors act rationally and without bias, and that at any moment they estimate the value of an asset based on future expectations. Under these conditions, all existing information affects the price, which changes only when new information comes out. By definition, new information appears randomly and influences the asset price randomly.
When viewed over long periods, the share price is directly related to the earnings and dividends of the firm. Over short periods, especially for younger or smaller firms, the relationship between share price and dividends can be quite unmatched"
Interfin Bank Holdings share price should reflect ENG Capital claim Part 2 of 5
by Gilbert Muponda on Monday, October 25, 2010 at 8:03pm
In Investment Banking and in Finance the rules of financial disclosure are simple -- if you choose to speak, speak in full and not in half-truths." Farai Rwodzi and Interfin Bank Zimbabwe have been providing half baked stories on the effect and impact of HC-6244-04 .The full founding affidavit for High Court Case HC-6244-04 is found here
http://www.facebook.com/album.php?aid=2059705&id=1393181020
Farai Rwodzi and Interfin Banking Corporation Zimbabwe improper disclosures came at a critical time when investors were clamoring for details about Interfin Banking Corporation Zimbabwes' ability to settle the $ 15.4 million claim by ENG Capital relating to the 309 million Century shares which were illegally and fraudulently converted into Interfin Banking Corporation.
Instead of providing clear and accurate information to the market, Interfin Banking Corporation Zimbabwe dropped the ball and made a bad situation worse by claiming that ENG Capital did not have a legitimate claim based on their legal opinion obtained from Mr Sternford Moyo after misleading him..
Interfin Banking Corporation Zimbabwe is a product of a fraudulent merger between Century Bank and CFX Bank which was subsequently renamed Interfin Banking Corporation after another irregular merger between Century/CFX Bank and Interfin Bank Zimbabwe.
In response to intense investor interest on the topic, Interfin Banking Corporation Zimbabwe repeatedly made misleading statements in earnings forecasts and public filings and regulatory filings to the Reserve Bank of Zimbabwe and to The Zimbabwe Stock Exchange about the extent of its holdings of assets which are under litigation which would most likely result in Interfin Banking Corporation Zimbabwe failing to meet the going concern rule.
All these "fake mergers" described above were designed with the intention of concealing the initial fraudulent transfer of 309 million Century shares illegally and irregularly transfered into Century/CFX Bank then Interfin Banking Corporation. This illegal transfer is being challenged through High court case HC-6244-04.
ENG Capital and myself are claiming US$ 15.4 million being the 309 million shares multiplied by the share price of $ 0.05 which give the claim total of US $ 15.4 million. Accordingly the share price and market value of Interfin Bank Holdings should be adjusted to take into account of this indisputable claim of $ 15.4 million which Interfin has to settle.
According to Wikipedia below are some of the factors which the share price and value of a company must factor into. One should consider Interfin Bank's Management poor judgement in "merging" with Century/CFX Bank which has litigation under High Court Case HC-6244-04
In addition to High Court Case HC-6244-04 Interfin Bank investor need to consider the following factors raised by Wikipedia when investing in Interfin Bank Zimbabwe shares
"Stocks have two types of valuations. One is a value created using some type of cash flow, sales or fundamental earnings analysis. The other value is dictated by how much an investor is willing to pay for a particular share of stock and by how much other investors are willing to sell a stock for (in other words, by supply and demand). Both of these values change over time as investors change the way they analyze stocks and as they become more or less confident in the future of stocks.
Earnings per share is generally considered to be the single most important variable in determining a share's price. It is also a major component used to calculate the price-to-earnings valuation ratio.
An important aspect of EPS that's often ignored is the capital that is required to generate the earnings (net income) in the calculation. Two companies could generate the same EPS number, but one could do so with less equity (investment) - that company would be more efficient at using its capital to generate income and, all other things being equal, would be a "better" company.
It is important not to rely on any one financial measure, but to use it in conjunction with statement analysis and other measures
In financial markets, stock valuation is the method of calculating theoretical values of companies and their stocks. The main use of these methods is to predict future market prices, or more generally potential market prices, and thus to profit from price movement - stocks that are judged undervalued (with respect to their theoretical value) are bought, while stocks that are judged overvalued are sold, in the expectation that undervalued stocks will, on the whole, rise in value, while overvalued stocks will, on the whole, fall.
In the view of fundamental analysis, stock valuation based on fundamentals aims to give an estimate of their intrinsic value of the stock, based on predictions of the future cash flows and profitability of the business."
Interfin Bank Holdings share price should reflect ENG Capital claim Part 3 of 5
by Gilbert Muponda on Sunday, October 24, 2010 at 7:16pm
Interfin Bank Holdings share price should reflect ENG Capital claim Part 3 of 5
Investors and shareholders buying Interfin Bank Holdings shares need to properly access the value of the share before sinking their money into a disputed asset.Such investors are advised to review contents of High court case HC-6244-04 which is seeking the reversal of the illegal seizure of 309 Million Century Bank shares which were converted into Century/CFX Bank then into Interfin Banking Corporation Zimbabwe.
The High court case HC-6244-04 is a must read for any and every investor or stakeholder in Interfin Banking Corporation which is in fact Century/CFX Bank in disguise.
Interfin Banking Corporation Zimbabwe is a product of a fraudulent merger between Century Bank and CFX Bank which was subsequently renamed Interfin Banking Corporation after another irregular merger between Century/CFX Bank and Interfin Bank Zimbabwe.
High Court Case HC-6244-04 has a direct bearing on Interfin Bank's ability to go on as a going concern. The full finding affidavit for High Court Case HC-6244-04 is found here
http://www.facebook.com/album.php?aid=2059705&id=1393181020
All these "fake mergers" were designed with the intention of concealing the initial fraudulent transfer of 309 million Century shares illegally and irregularly transfered into Century/CFX Bank then Interfin Banking Corporation. This illegal transfer is being challenged through High court case HC-6244-04.
ENG Capital and myself are claiming US$ 15.4 million being the 309 million shares multiplied by the share price of $ 0.05 which give the claim total of US $ 15.4 million. Accordingly the share price and market value of Interfin Bank Holdings should be adjusted to take into account of this indisputable claim of $ 15.4 million which Interfin has to settle.
According to Wikipedia below are some of the factors which the share price and value of a company must factor into. One should consider Interfin Bank's Management poor judgement in "merging" with Century/CFX Bank which has litigation under High Court Case HC-6244-04
According to Wikipedia "Earnings Per Share (EPS). EPS is the total net income of the company divided by the number of shares outstanding. They usually have a GAAP EPS number (which means that it is computed using all of mutually agreed upon accounting rules) and a Pro Forma EPS figure (which means that they have adjusted the income to exclude any one time items as well as some non-cash items like amortization of goodwill or stock option expenses).
The most important thing to look for in the EPS figure is the overall quality of earnings. Make sure the company is not trying to manipulate their EPS numbers to make it look like they are more profitable. Also, look at the growth in EPS over the past several quarters / years to understand how volatile their EPS is, and to see if they are an underachiever or an overachiever. In other words, have they consistently beaten expectations or are they constantly restating and lowering their forecasts?
The EPS number that most analysts use is the pro forma EPS. To compute this number, use the net income that excludes any one-time gains or losses and excludes any non-cash expenses like stock options or amortization of goodwill. Then divide this number by the number of fully diluted shares outstanding. You can easily find historical EPS figures and to see forecasts for the next 1-2 years by visiting free financial sites such as Yahoo Finance (enter the ticker and then click on "estimates").
By doing your fundamental investment research you'll be able to arrive at your own EPS forecasts, which you can then apply to the other valuation techniques below.
Price to Earnings (P/E). Now that you have several EPS figures (historical and forecasts), you'll be able to look at the most common valuation technique used by analysts, the price to earnings ratio, or P/E. To compute this figure, take the stock price and divide it by the annual EPS figure. For example, if the stock is trading at $10 and the EPS is $0.50, the P/E is 20 times. To get a good feeling of what P/E multiple a stock trades at, be sure to look at the historical and forward ratios.
Historical P/Es are computed by taking the current price divided by the sum of the EPS for the last four quarters, or for the previous year. You should also look at the historical trends of the P/E by viewing a chart of its historical P/E over the last several years (you can find on most finance sites like Yahoo Finance). Specifically you want to find out what range the P/E has traded in so that you can determine if the current P/E is high or low versus its historical average.
Forward P/Es are probably the single most important valuation method because they reflect the future growth of the company into the figure. And remember, all stocks are priced based on their future earnings, not on their past earnings. However, past earnings are sometimes a good indicator for future earnings. Forward P/Es are computed by taking the current stock price divided by the sum of the EPS estimates for the next four quarters, or for the EPS estimate for next calendar of fiscal year or two.
I always use the Forward P/E for the next two calendar years to compute my forward P/Es. That way I can easily compare the P/E of one company to that of its competitors and to that of the market. For example, Cisco's fiscal year ends in July, so to compute the P/E for that calendar year, I would add together the quarterly EPS estimates (or actuals in some cases) for its quarters ended April, July, October and the next January. Use the current price divided by this number to arrive at the P/E.
Also, it is important to remember that P/Es change constantly. If there is a large price change in a stock you are watching, or if the earnings (EPS) estimates change, be sure to recompute the ratio.
Growth Rate. Valuations rely very heavily on the expected growth rate of a company. For starters, you can look at the historical growth rate of both sales and income to get a feeling for what type of future growth that you can expect. However, companies are constantly changing, as well as the economy, so don't rely on historical growth rates to predict the future, but instead use them as a guideline for what future growth could look like if similar circumstances are encountered by the company. To calculate your future growth rate, you'll need to do your own investment research.
The easiest way to arrive at this forecast is to listen to the company's quarterly conference call, or if it has already happened, then read a press release or other company article that discusses the company's growth guidance. However, remember that although company's are in the best position to forecast their own growth, they are not very accurate, and things change rapidly in the economy and in their industry. So before you forecast a growth rate, try to take all of these factors into account."
Adopted from Wikipedia to illustrate other factors which Interfin Bank Investors and shareholders should consider when trading in Interfin Bank Holdings shares.
Interfin Bank Holdings share price should reflect ENG Capital claim Part 4 of 5
by Gilbert Muponda on Sunday, October 24, 2010 at 5:00pm
ENG Capital and myself are claiming US$ 15.4 million being the 309 million shares multiplied by the share price of $ 0.05 which give the claim total of US $ 15.4 million. Accordingly the share price and market value of Interfin Bank Holdings should be adjusted to take into account of this indisputable claim of $ 15.4 million which Interfin has to settle.
Interfin Banking Corporation Zimbabwe is a product of a fraudulent merger between Century Bank and CFX Bank which was subsequently renamed Interfin Banking Corporation after another irregular merger between Century/CFX Bank and Interfin Bank Zimbabwe.
All these "fake mergers" were designed with the intention of concealing the initial fraudulent transfer of 309 million Century shares illegally and irregularly transfered into Century/CFX Bank then Interfin Banking Corporation. This illegal transfer is being challenged through High court case HC-6244-04.
According to Wikipedia below are some of the factors which the share price and value of a company must factor into. One should consider Interfin Bank's Management poor judgement in "merging" with Century/CFX Bank which has litigation under High Court Case HC-6244-04
Wikipedia states that "Return on Invested Capital (ROIC). This valuation technique measures how much money the company makes each year per dollar of invested capital. Invested Capital is the amount of money invested in the company by both stockholders and debtors. The ratio is expressed as a percent and you should look for a percent that approximates the level of growth that you expect. In its simplest definition, this ratio measures the investment return that management is able to get for its capital. The higher the number, the better the return.
To compute the ratio, take the pro forma net income (same one used in the EPS figure mentioned above) and divide it by the invested capital. Invested capital can be estimated by adding together the stockholders equity, the total long and short term debt and accounts payable, and then subtracting accounts receivable and cash (all of these numbers can be found on the company's latest quarterly balance sheet). This ratio is much more useful when you compare it to other companies that you are valuing.
Return on Assets (ROA). Similar to ROIC, ROA, expressed as a percent, measures the company's ability to make money from its assets. To measure the ROA, take the pro forma net income divided by the total assets. However, because of very common irregularities in balance sheets (due to things like Goodwill, write-offs, discontinuations, etc.) this ratio is not always a good indicator of the company's potential. If the ratio is higher or lower than you expected, be sure to look closely at the assets to see what could be over or understating the figure.
Price to Sales (P/S). This figure is useful because it compares the current stock price to the annual sales. In other words, it tells you how much the stock costs per dollar of sales earned. To compute it, take the current stock price divided by the annual sales per share.
The annual sales per share should be calculated by taking the net sales for the last four quarters divided by the fully diluted shares outstanding (both of these figures can be found by looking at the press releases or quarterly reports).
The price to sales ratio is useful, but it does not take into account any debt the company has. For example, if a company is heavily financed by debt instead of equity, then the sales per share will seem high (the P/S will be lower). All things equal, a lower P/S ratio is better. However, this ratio is best looked at when comparing more than one company.
Market Cap. Market Cap, which is short for Market Capitalization, is the value of all of the company's stock. To measure it, multiply the current stock price by the fully diluted shares outstanding. Remember, the market cap is only the value of the stock. To get a more complete picture, you'll want to look at the Enterprise Value.
Enterprise Value (EV). Enterprise Value is equal to the total value of the company, as it is trading for on the stock market. To compute it, add the market cap (see above) and the total net debt of the company.
The total net debt is equal to total long and short term debt plus accounts payable, minus accounts receivable, minus cash. The Enterprise Value is the best approximation of what a company is worth at any point in time because it takes into account the actual stock price instead of balance sheet prices" according to Wikepedia
Adopted from Wikipedia to illustrate how and why the Interfin Banking Corporation share price and market value should be adjusted to reflect the ENG Capital indisputable claim of US $ 15.4 million being the stolen 309 million shares multiplied by the share value of $ 0.05 per share givng the total claim total of $ 15.4 million which Interfin Bank owes to me and my Company ENG Capital - Relentless Innovation.
Interfin Bank Holdings share price should reflect ENG Capital claim Part 5 of 5
by Gilbert Muponda on Sunday, October 24, 2010 at 4:26pm
Interfin Bank Holdings share price should reflect ENG Capital claim Part 5 of 5
Interfin Banking Corporation Zimbabwe is a product of a fraudulent merger between Century Bank and CFX Bank which was subsequently renamed Interfin Banking Corporation after another irregular merger between Century/CFX Bank and Interfin Bank Zimbabwe.
All these "fake mergers" were designed with the intention of concealing the initial fraudulent transfer of 309 million Century shares illegally and irregularly transfered into Century/CFX Bank then Interfin Banking Corporation. This illegal transfer is being challenged through High court case HC-6244-04.
ENG Capital and myself are claiming US$ 15.4 million being the 309 million shares multiplied by the share price of $ 0.05 which give the claim total of US $ 15.4 million. Accordingly the share price and market value of Interfin Bank Holdings should be adjusted to take into account of this indisputable claim of $ 15.4 million which Interfin has to settle.
According to Wikipedia below are some of the factors which the share price and value of a company must factor into. One should consider Interfin Bank's Management poor judgement in "merging" with Century/CFX Bank which has litigation under High Court Case HC-6244-04
"Management issues
Management issues: This involves examining perceptions about management and perceptions by management. It includes various qualitative judgments regarding the competence of current and prospective company management, as well as issues related to insider buying, future strategies to increase operations and market share. Most large companies compensate executives through a combination of cash, restricted stock and options. It is a positive sign when members of management are also shareholders.
When management makes large purchases of their own stock with private funds, it may indicate that management insiders feel the company is undervalued, or that a favorable company event will occur soon.
Another way to get a feel for management capability is to examine how executives performed at other companies in the past. Warren Buffett has several recommendations for investors who want to evaluate a company's management as a precursor to possible investment in that company's stock. For example, he advises that one way to determine if management is doing a good job is to evaluate the company's return on equity, instead of their earnings per share (the portion of a company's profit allocated to each outstanding share of common stock).
"The primary test of managerial economic performance is achievement of a high earnings rate on equity capital employed (without undue leverage, accounting gimmickry, etc.) and not the achievement of consistent gains in earnings per share."
Buffett notes that because companies usually retain a portion of their earnings, the assets a profitable company owns, should increase annually. This additional cash allows the company to report increased earnings per share even if their performance is deteriorating.
He also emphasizes investing in companies with a management team that is committed to controlling costs. Cost-control is reflected by a profit margin exceeding those of competitors. Superior managers "attack costs as vigorously when profits are at record levels as when they are under pressure".
Therefore, be wary of companies that have opulent corporate offices, unusually large corporate staffs and other signs of bloat. Additionally, Buffett suggests investing in companies with honest and candid management, and avoiding companies that have a history of using accounting gimmicks to inflate profits or have mislead investors in the past"
Adopted from Wikipedia
Sternford Moyo misled & manipulated by Farai Rwodzi and Interfin on ENG Capital - Part 5 of 5
by Gilbert Muponda on Thursday, October 14, 2010 at 10:03pm
Sternford Moyo misled & manipulated by Farai Rwodzi and Interfin on ENG Capital - Part 5 of 5
Interfin Bank Directors seem to be ill advised and practizing massive self-deception on a grand scale. It is well documented and in public domain that I challenged the illegal sale and or transfer of Century bank through High Court case HC-6244-04.Yet they go ahead and somehow convince a Lawyer of Mr Sternford Moyo's standing to issue a legal opinion that has an effect of breaking the ZSE Act and mislead the investing public. This is a serious offence under the ZSE Act, Company Act and other Zimbabwean laws that govern director fiduciary duties.
These Directors need to know that in their personal capacity they could be fired, tried and convicted for lying to minority shareholders and the Investing public...their employer.
Everyone wants the money, but it pretty much amounts to selling your soul when supposedly respected members of the comm7unity such as Bank directors willingly mislead the regulatory bodies such as The Reserve Bank of Zimbabwe, Zimbabwe Stock Exchange ,Ministry of Finance, Securities Commission etc.
The ZIMBABWE STOCK EXCHANGE ACTActs 27/1973, 24/1975, 15/1981, 20/1984; R.G.Ns 54/1975; 1135/1975, S.Is 468/1979, 236/1980. Is clear on this. Below is an extract from the ZSE act which Interfin Banking Corporation Directors ought to be familiar with since they run a Company governed by this act.
"73 Prohibition of fraudulent acts or of carrying on business of stock exchange
(1) No person shall--
(a) make or cause or permit to be made in any document or return which
is required by or under this Act to be sent to the Secretary, the Minister, the Registrar,
the Committee, the Exchange auditor or an auditor referred to in paragraph (d) of
section forty-six a statement which he knows to be false or does not know or believe
to be true; or
(b) by addition, alteration, erasure or omission falsify any document or
return referred to in paragraph (a); or
(c) by any statement, promise or forecast which he knows to be false or
does not know or believe to be true induce any other person to purchase or sell any
securities; or
(d) directly or indirectly use or take part in any manipulative or deceptive
method of dealing in listed securities likely to stimulate further dealings in listed
securities or any class or classes thereof on the Exchange; or
(e) by means of fictitious transactions or the spreading of false reports
influence the prices of listed securities or any class or classes thereof on the
Exchange."
Practizing self deception at an alarming scale when they willingly break the relevant Governing Act .This act is freely available on the internet and Interfin Bank Directors need to familiarize themselves .The direct link is here http://www.parlzim.gov.zw/cms/Acts/Title24_COMMERCIAL_AND_FINANCIAL_INSTITUTIONS/ZIMBABWE_STOCK_EXCHANGE_ACT_24_18.pdf
Interfin Banking Corporation Directors seem to be practizing moral flexibility whilst bending rules and regulations to conceal their prior knowledge of a legitimate claim which they with held informing their employers who are the Investing public who are protected by the ZIMBABWE STOCK EXCHANGE ACT Acts 27/1973, 24/1975, 15/1981, 20/1984; R.G.Ns 54/1975; 1135/1975, S.Is 468/1979, 236/1980.
High Court Case HC-6244-04 was filed in 2004 and its still pending before the courts. Yet Interfin Banking Corporation Directors pretend there was never any challenge to their illegal and irregular grabbing of Century/CFX Bank.
By will fully and deliberately misleading the Investing Public in violation of the ZSE Act Interfin Banking Corporation is an organization that has re-defined the definition of corruption , deceit and concealment of material information from Investing public and Regulatory Authorities.
Notice to Interfin Bank Directors
by Gilbert Muponda on Thursday, October 14, 2010 at 5:36am
It has come to my attention that Interfin Bank Directors are continuing to tarnish my reputation and mislead Investing Public and Regulatory Authorities by alleging that I never legally challenged the illegal transfer of 309 million Century/CFX shares despite their full knowledge of HC-6244-04.I humbly request that they correct this within the next 96 hrs ,failure to which I will have no choice but to do it for them.
Sternford Moyo misled & manipulated by Farai Rwodzi and Interfin on ENG Capital - Part 4 of 5
by Gilbert Muponda on Wednesday, October 13, 2010 at 9:20am
Mr Sternford Moyo's claim that there was never an objection to the sale and or transfer of the Century Shares into CFX Bank shares then Interfin Bank shares can not go unchallenged .His opinion must be put under an intregrity test and be compared to publicly available information.
In my original article titled "Gilbert Muponda: Further Revelations on the Century/CFX bank Fraud"
Published more than a year ago on Sep 28th, 2009 and filed under Financial News, which appeared in many newspapers including The Zimbabwe Metro Newspaper I made it clear there was already a High Court case blocking the illegal sale and transfer of the 309 Million Century Shares. The relevant link is here http://www.zimbabwemetro.com/finance/gilbert-muponda-further-revelations-on-the-centurycfx-bank-fraud/
Therefore anyone who did a serious due diligence would have discovered that the dealing in such shares was null and void in addition to being illegal and fraudulent as it was misleading the investing public.
Below is the full article wherein I made it clear High Court Case HC 6244-04 had been set in motion and therefore any dealing in the said 309 million Century shares and any attempt to conceal the original fraudulent transfer will constitute further unacceptable fraudulent behavior and decepit meant to mislead regulatory Authorities and the General Investing public
The original article -
"It appears there is a misunderstanding on why I have been publishing letters relating to claim for ownership of 309 million Century/CFX Bank shares. In addition some have asked why the matter is being raised 5 years after the 309 Million shares were irregularly sold and transferred.
When the sale was done on or around 12 May 2004 I through my lawyers Ziweni and Company filed a high court application to block the sale of the shares. This record should still be there at the HarareHigh Court. As soon as we filed this application I was then specified without a hearing. This limited my ability to follow up the application. My lawyer and his firm was also specified. Leaving me without legal representation on the matter.
This was all done to ensure that the 309 million shares are sold, transferred and Century/CFX Bank is snatched from my Company - ENG Capital.
Several articles have been written highlighting how these 309 million shares and Century/CFX bank was grabbed from ENG Capital. Over the time we had hoped the current and previous Directors and Management of CFX Bank would reach out and try to find out what really transpired and resolve our claim. This is the normal way of doing business.
If you hear someone claiming ownership of your Bank or business you are expected to confront or engage that person to verify the nature of their claim. The CFX Bank Board, Management and shareholders somehow made the arrogant decision to behave as if everything is normal and totally disregard a claim which has been documented even at High court since day one of the fraudulent merger between Century and CFX Bank.
Even the latest press comments by the Bank through an individual identified as its Lawyer it appears they want to keep hiding behind technicalities such as you should have raised the claim earlier or you are specified therefore you cant act on your own behalf. This is inaccurate and misleading.
This level of arrogance and total disregard of material facts and potential impact on investors is an attitude which must be challenged and stopped. As out lined above this matter was filed at the high court in May 2004.And over the years articles detailing the claim have been published. Any serious and responsible Board of Directors would have taken corrective action by at least engaging in negotiations.
Let it be noted that had they done that at early stages this matter would have been closed by simply acknowledging that there was some injustice but however they were not aware that such a thing had happened. This would have been a reasonable and acceptable position.
However it appears the current Board and Management want to keep denying clear facts and act as if nothing was amiss. The continual reference to my specification only highlights that the people who grabbed Century/CFX Bank from me and ENG Capital are the same people who abused the law and manipulated the legal system to specify me without a hearing so that I can follow through action to block the sale and transfer of the shares.
The cases of illegal and unjust business seizures have been occurring at an alarming rate in Zimbabwe. This must be firstly documented. Those doing it must be notified and warned. Those aiding ,abetting and facilitating such business seizures must be documented and be made aware records exist of their illegal action.
Employees in affected businesses such as employees at CFX Bank are encouraged and expected to remain professional and do their best to keep the Company vibrant but must avoid being used as proxies in a shareholder fight. This is not wise.
This part of an effort to fully document and seek redress for the fraudulent transfer of 309 million shares which were used to merge Century Bank and CFX Bank. CFX Bank was created as a result of a merger between CFX Bank and Century Bank.
Century Bank was fraudulently merged with CFX Bank through the illegal and irregular transfer of 309,000,000 Century Holdings shares owned by ENG Capital and Companies owned or controlled by ENG Capital. Since this was a fraudulent and illegal transfer of ENG shares the plotters of the scheme renamed the resultant bank CFX Bank dropping the name "Century" in an effort to hide their tracks and attempt to remove any link with Century.
In April 2003 ENG Capital Investments acquired Century Discount Holdings from Century Financial Holdings ( A ZSE listed Financial Holdings Firm).The purchase price was Z$1.5 billion then equivalent to US$ 3 million. The purchase price was paid in full. ENG then applied to the Registrar of Banks and Financial Institutions for the change of controlling shareholder approval which approvals were denied.
After several attempts to get the underlying reasons for the denial I was informed that ? the Authorities? were not comfortable with ENG political inclination which they said remained ?unclear? in addition issue of the ENG Directors age was raised. We then tried to find out if Century Financial Holdings was in a position to refund ENG for the purchase price and to reverse the Century Discount House purchase. Century Holdings was not in a position to refund ENG.
The only recourse was that ENG had to acquire Century Financial Holdings to mitigate any potential loss of outlay on the Century Discount house acquisition. As such ENG and its associated Companies acquired a total of 52% (including the 309 million) of Century Financial Holdings making Century an ENG subsidiary.
Through our Lawyers Ziweni and Company we sought the identity of the buyer and also to clarify that the share sell was null and void as it had all the hall marks of corruption, insider dealing and was being challenged by the beneficial owners of the shares. In addition the shares had been sold through a special bargain and not an open market transparent transaction. The shares were sold for an unrealistic amount of Z$ 3 billion when ENG Capital had acquired the same shares for at least Z$35 billion. This resulted in the prejudice of Z$ 32 billion to ENG Capital Creditors and Contributories/Shareholders. We also asked the Zimbabwe Stock Exchange to investigate and stop the share transfer.
These articles form part of a wider effort to ensure that Zimbabwe?s Corporate sector eventually develops to be one where shareholders are respected and the rule of law is not applied selectively in terms of Investor protection. Whilst the case study may be focused on the 309 million shares and ownership of Century/CFX Bank the facts and scenario can be applied to other businesses that were affected by similar schemes that we devised by corrupt politicians and a corrupt central Bank Governor. It is very important that such cases be clearly and completely be documented."
End of original article.
When such articles are freely available in the public domain it becomes a puzzling mystery as to why a Senior Lawyer such as Mr Moyo would write an opinion claiming that there was never a challenge to the illegal sale and irregular transfer of the 309 million shares when High Court Case HC-6244-04 is pending before the courts.
Sternford Moyo misled & manipulated by Farai Rwodzi and Interfin on ENG Capital - Part 3 of 5
by Gilbert Muponda on Tuesday, October 12, 2010 at 9:15pm
After going through the legal opinion provided by Mr Sternford Moyo to Interfin regarding the disputed takeover over Century/ CFX Bank and its subsequate rebranding into Interfin Banking Corporation it becomes clear that Mr Moyo is a victim of deception and manipulation.
He was deceived into believing that there was never a legal challenge to the fraudulent and illegal transfer of the 309 million Century Shares into CFX Bank then into Interfin Banking Corporation. All records will show this illegal transaction was challenged through various letters and High Court application HC 6244-04 filed at Harare on May 2004.
This challenge was widely reported in the Herald Newspaper, The Independent and the Daily Mirror. Records at the National archives will confirm this .It remains a mystery why Mr Moyo would claim that there was never a challenge when publicly available records confirm the existence of a challenge which is currently before the courts.
"Prima facie, therefore, any disposal by the liquidator which is confirmed by the High Court or the Master of the High Court is a lawful disposal. A party alleging that the liquidation procedures were influenced by an unlawful act or unlawful activities has to make the claim formally in court and establish the basis for any allegation he or she may make.
It has been suggested in another opinion on the matter that Section 10 of the Prevention of Corruption Act [Chapter 9:16] divests Muponda of any locus standi. This is not correct. The issue was addressed by the Supreme Court in the case of MUTUMWA DZIVA MAWERE v THE MINISTER OFJUSTICE, LEGAL AND PARLIAMENTARY AFFAIRS, S.C. NO. 158 OF 2005. In that matter, an objection to locus standi was raised on the basis that Mutumwa Mawere was a specified person and could not, therefore, institute legal proceedings to challenge his specification or at all without the authority of the investigator. It was common cause that the prohibition was not absolute and could be cured by the authority of the investigator. Likewise, the obstacle faced by the directors of ENG can be cured by the authority of the investigator. ………."
It is clear from the above that Mr Moyo was misinformed and his opinion was possibly fraudulently obtained. It is noteworthy to find out who misled him and what was the intention and motive for such misinformation. What was being hidden by the false impression that there was never a court case to challenge the transfer of shares? It is clear he gave an opinion which he would not have otherwise given had he been furnished with the full facts especially my founding affidavit for High Court Case HC -6244-04
Mr Moyo continues "……Consequently, Mr Muponda or Mr Watyoka, wherever they may be, can institute legal proceedings notwithstanding the specification. Decisions to the High Court to the contrary made before 11th September 2008 when the Supreme Court made its above finding are applicable only where the specified person proposes to use the resources of his estate in Zimbabwe. An additional basis raised by the Supreme Court is given on page 6 of the judgment where the Supreme Court pointed out that: "In addition, it is a moot issue whether he can be deprived of his constitutional right to challenge an administrative decision such as the above in a court of law to test its correctness. For example if such authority was refused by the investigator the appellant would have a right to appeal if it was unreasonably refused."
Contrary to the above excerpts the illegal sale of the 309 million shares was challenged through various channels. Letters of complaint were sent to -
(1) the Register of the High court
(2) Liquidator
(3) Zimbabwe Stock Exchange
(4) Fidelity Stock Brokers
(5) Century Holdings Limited
This was followed up by a High Court application HC -6244-04 blocking the sale and or transfer of the 309 million Century/CFX Bank Shares. Its mind boggling that a Bank such as Interfin with the assistance of a lawyer of Mr Moyo's standing would conduct a due diligence and fail to uncover the existence of such publicly available records which can even be obtained from the National Archives.
This behavior only serves to confirm that Mr Farai Rwodzi and Interfin Banking Corporation have something to hide that's why they misled a leading lawyer without letting him review details of High Court Case HC-6244-04
Sternford Moyo misled & manipulated by Farai Rwodzi and Interfin on ENG Capital - Part 2 of 5
by Gilbert Muponda on Monday, October 11, 2010 at 6:51pm
Respected lawyer Mr Sternford Moyo was duped by Interfin Banking Corporation into issuing a legal opinion which ignored material facts. In his opinion Mr Moyo suggests I never opposed the illegal sale and transfer of Century Bank to CFX Bank and Interfin Bank Zimbabwe.
In May 2004 through MY then lawyers Mr Oscar Ziweni I filed a court motion opposition the sale of Century Bank or any further disposal of ENG Capital shares. Instead of responding through normal court procedure the Authorities responded by specifying me, my lawyer and my Co-Director Nyasha Watyoka.
Clearly this was illegal and unacceptable because a person can not be specified without a hearing offering them a chance to present their side of facts. I was only specified as means to tie my "legal" hands and deny me any legal standing. However the specification does not legitimize the otherwise illegal and fraudulent seizure of Century Bank which was then renamed CFX Bank then Interfin Banking Corporation to hide the illegal and irregular seizure.
I have always maintained my 309 million Century Bank Holdings shares were fraudulently, illegally and irregularly converted into CFX shares (and) then into Interfin Bank Holdings shares. This is why I initiated High Court Case HC-6244-04 to nullify and void any attempts to sanitize this illegal and fraudulent actions.
The various rebranding attempts from Century Bank to CFX Bank to CFX/Interfin Banking Corporation clearly show there is a problem and are evidence of attempts to conceal and deceive on the initial fraudulent transfer of the Century Shares into CFX Bank then Intern Bank.
For that reason we have demanded to know the full identity of the individual or entity who initially "bought" the 309 million shares for which I am demanding US$15,4 million made up of the US$0.05 per share multiplied by 309 million shares.Our legitimate claim to compensation of US$15,4 million for the 309 million shares is indisputable.
Farai Rwodzi and Interfin's refusal to pay compensation is groundless and is absolutely not acceptable.Their legal opinion I can only assume was fraudulently obtained without letting Mr Sternford Moyo assess all the effects especially HC - 6244-04
My attorney, the late Mr Oscar Ziweni (RIP), was harassed, intimidated and arrested for defending me and specified for taking my brief and in the end I had no legal representation .At one point he was forced into hiding when threatened with detention on fabricated charges which were just meant to stop him from pushing HC-6244-04
I do not think Mr Sternford Moyo will accept that Lawyer should be specified,detained,arrested and harassed for assisting and defending clients.This behavior of intimidating lawyers is unacceptable anywhere in the world. I am shocked that Mr Moyo who is a former Chairman of the Zimbabwe Law Society does not actually come out to denounce such actions which were carried out by the people who were determined to loot ENG assets including Century Bank.
This is wrong and Mr Moyo with all due respect is being misled and his reputation may be exposed if he writes a Legal Opinion for individuals and entities like Interfin Banking Corporation who do not disclose all material facts.
At that time the tumultuous atmosphere that had gripped the nation and the political interference in the ENG saga, presented a clear and present danger to me and my family which left me with no choice but to leave the country in confidence to clear my name since we had already filed our court case HC 6244-04.
Sternford Moyo misled & manipulated by Farai Rwodzi and Interfin on ENG Capital c - Part 1 of 5
Mr Sternford Moyo states "The liquidation proceedings were not at any time challenged. No attempt appears to have been made to obtain an order setting aside the proceedings. Indeed, to date, no proceedings have been instituted to set aside the liquidation proceedings. The companies were duly wound up in terms of the procedure provided for in the Companies Act and a distribution to creditors was duly effected. There was no objection to the distribution." This is according to his opinion published by NEHANDARADIO.COM found here -
http://nehandaradio.com/2010/10/06/legal-opinion-on-eng-vs-interfin-looting-saga/comment-page-1/#comment-15116
This opinion is flawed because it based on the fallicious assumption that I never challenged the liquidation or sale and or transfer of the 309 million Century/CFX shares. The truth is I challenged the whole process including the sale and transfer of the 309 million shares. My founding affidavit for the High Court Case HC-6244-04 IS FOUND HERE http://www.facebook.com/album.php?aid=2059705&id=1393181020
My then business partner and co-director Nyasha Watyoka supported my court action under High Court Case HC 6244-04 .In fact he did his own affidavit to support my court motion. His affidavit can be found here http://www.facebook.com/album.php?aid=2059734&id=1393181020&l=3ea08676ec .This clearly show that there was no serious due diligence exercise done by Interfin Banking Corporation but instead they sort to manipulate a senior lawyer by giving him incomplete at times false information to induce him to author an opinion that would endorse their illegal take over of Century/CFX Bank.
It is important in commercial transactions to obtain a legal opinion. Normally this should come from an independent and senior respected lawyer. Under normal circumstances Mr Moyo would qualify as a senior and independent lawyer .However in this case he can not be independent since he reportedly represented Mr John Moxon and Meikles Africa Limited and Mr Farai Rwodzi of Interfin Banking Corporation is also Chairman of the same Meikles Africa Limited which Mr Moyo has represented. Therefore Mr Moyo's opinion cant be viewed as independent or unbiased .He is an interested party and as such he should have recused himself,Which led him to give an opinion which totally ignores HC 6244-04 which he goes on to deny its existence despite overwhelming evidence of its existence,effect and impact
In law, an opinion (also consilia) is usually a written explanation by a judge or group of judges that accompanies an order or ruling in a case, laying out the rationale and legal principles for the ruling.
According to Wikipedia - "In the United Kingdom and other common law countries, a legal opinion also refers to written legal advice on a point of law issued by either a barrister (often referred to as "counsel's opinion") or occasionally a senior government law officer, such as an attorney general.
The latter form of opinion is sometimes made available to the public either because of public pressure (see for example Lord Goldsmith's opinion on the Iraq War, Yoo memo), or because a general clarification of the law is called for (see for example, the Yorke-Talbot slavery opinion)."
http://en.wikipedia.org/wiki/Legal_opinion
In the court application for release of ENG Capital cars my Co-Director Nyasha Watyoka is merely salvaging what we can easily salvage .However this shouldn't be mistaken as withdrawal of any challenge to the process .There is no reason for our cars to remain locked up at Chikurubi that's why he sought their release. At no point is he saying he is happy with the process of liquidation neither is he saying he never challenged it.The fact is that we both challenged it which led to our specification .
Mr Moyo was not properly briefed as to the reasons of our specification. We were specified after challenging the sale of the 309 million Century/CFX shares by filing HC 6244-02.As Mr Moyo suggests any evidence that we opposed the sale of the shares will help our case and its clear such evidence exists.
It is sad that Mr Moyo was misled and manipulated into issuing an opinion which will not survive an integrity test and as such other Interfin Banking Corporation Zimbabwe Directors are at risk in their personal capacity for litigation should they still insist on relying on a faulty opinion which was prepared in the absence of full facts.
At this stage I would advise all those in the Interfin team to take a deep breathe and re-consider their views in light of the fact that a lawyer was misled and as a result he gave a legal opinion which is not supported by facts.Mr Sternford Moyo's reputation is on the line, Farai Rwodzi's legacy is on the line , My legacy is on the line. At this stage the ball is in Interfin's court to do the right thing and negotiate their way out of the logjam they have created by trying to conceal the fact that the shares were illegally and irregularly sold in the first place and High Court Case HC-6244-04 is still pending.
ENG CAPITAL - STRONG BRANDS NEV ER FADE - HOW TO RECLAIM A LOOTED ASSET
ENG Capital capabilities
There is need to understand ENG Capital's ability to mobilise Zimbabwe dollars. At its peak ENG was peerless and unrivalled in the Zimbabwean financial market in its ability to raise and access Zimbabwe dollars.
The ENG Capital Group treasury was made up of the following individual units Century Bank, Century Asset Management, Century Discount House, Leasing Company of Zimbabwe, ENG Asset Management and Hybri Micro-Finance Institution. ENG Capital group had a market capitalisation of US$ 75 million, just before the RBZ descended on the Institution. This made ENG the single biggest combined treasury in the Zimbabwe Financial market.
The installation of RTGS immediately allowed the Authorities to trace which Institutions were the biggest movers of money and the money market. The authorities were alarmed to learn that ENG (an unknown firm to them) and which didn't have a political "Godfather" was allowed to control such resources. A further study was made to trace the political inclination of the shareholders and directors. ENG was not well represented in the political ladders. The belief was that any independent financial resources could be used and was being used to clandestinely support the opposition or politicians deemed undesirable. In addition business owners were supposed to show gratitude by donating and financing the political set up. Any meaningful business group was supposed to be well known and its owners be vetted by the authorities' political process. Any business which didn't fit that bill had to be either closed, nationalised or shareholding restructured.(by any means necessary). Dr Gono needed a high profile scapegoat and start his new career with a bang.
BBC REPORT ON THE ZIMBABWE FINANCIAL CRISIS
Last Updated: Thursday, 15 January, 2004, 15:50 GMT
E-mail this to a friend Printable version
Mass panic grips Zimbabwe banks
Investors fear that banks will go bust
Hundreds of Zimbabweans have besieged several new banks to withdraw their money amid rumours they are going bust.
The panic follows a crackdown on alleged corruption in financial institutions, which has left at least six banks in serious trouble.
A Zimbabwean man said: "I don't want to take chances. Today I am going to withdraw all my money from my bank".
Police have recently arrested lawyers, insurance agents and a top politician implicated in a banking scandal.
Another woman in in the second city of Bulawayo says: "I came here as soon as I heard on the radio that several banks owned by locals would be closed."
Magistrates arrested
A senior official of the ruling Zanu-PF party has been in custody for several days, accused of blocking enquiries.
Philip Chiyangwa says he is a victim of rival factions vying to succeed President Robert Mugabe.
The scandal came to light last week after a financial firm, ENG Capital Management, failed to account for 61 billion Zimbabwe dollars ($74m at the official rate, $13.5m on the black market) of investor's money.
The firm, which has now been liquidated, was being run by three youths.
Chiyangwa headed calls for black empowerment
Other financial institutions have been affected by the crackdown as some of those involved in ENG Capital Management are also directors of local banks.
On Tuesday, a magistrate ruled that Mr Chiyangwa, an MP who spearheads the black empowerment lobby, must remain in custody for another two weeks.
The magistrate said that he might interfere with witnesses.
Police said they had found a dozen cars belonging to the company at Mr Chiyangwa's house.
Police say they are investigating the involvement of several top ruling party politicians in the institution but have not released any other names.
No-nonsense
The man behind the crackdown on alleged corruption in financial institutions is Gideon Gono, the new Governor of the Reserve Bank.
Local politicians and economists have praised him for his attempts at cleaning up the industry.
Mr Gono is said to be a no-nonsense administrator and has earned the praise of many Zimbabweans for his new monetary policies.
President Mugabe has commended the governor for a job well done and warned corrupt leaders of his party that the net is closing in on them.
http://news.bbc.co.uk/2/hi/africa/3400369.stm
Chiyangwa arrested in ENG scandal
CHIYANGWA
* Msika warns Chiyangwa
* Chiyangwa threatens cop in court
* Chiyangwa implicated in ENG scandal
* ENG directors charged with fraud
* Banks face collapse
* End of era for forex dealers
* Gono new RBZ governor
* Tea boy to national purse
By Staff Reporter
10/01/04
PHILLIP Chiyangwa, the showy parliamentarian and key member of President Robert Mugabe's ruling party has been arrested on charges he tried to prevent the arrest of two company directors accused of defrauding investors of billions of dollars, state television reported.
"Police have arrested prominent businessman and Chinhoyi member of parliament Comrade Philip Chiyangwa on allegations of obstructing the course of justice in the ENG saga," the Zimbabwe Broadcasting Corporation (ZBC) said on Saturday.
Businessman Chiyangwa is a provincial chairman for President Robert Mugabe's ruling ZANU-PF party.
Local media reported this week that he tried to block the arrest of two directors of asset management firm ENG Capital on fraud charges involving over 60 billion Zimbabwe dollars (about U.S. $73 million at the official rate).
ZBC said the flamboyant champion of the government's black economic empowerment drive would also be questioned on charges he threatened a policeman probing his involvement in the case.
Police chief spokesman Assistant Commissioner Wayne Bvudzijena said he could not immediately confirm the arrest.
On Friday a Harare magistrate rejected the ENG directors' bid for the case to be dropped and denied bail on the grounds they might abscond due to the gravity of the charges.
Chiyangwa took the witness stand in court to support the two men's bid for release, but denied having business interest in ENG or trying to interfere with police investigations.
He said he had merely tried to facilitate a political and legal settlement to the matter which would not damage black economic advancement.
The ENG directors are the first legal casualties of a crisis that has seen some banks grapple with liquidity crunches after a run on deposits by investors scared they might not survive a central bank crackdown on speculative currency trade.
Analysts say the crisis threatens the political careers and wealth of some of Mugabe's top backers in the business world.
They say the veteran leader -- battling an economic crisis blamed on government mismanagement -- could crack down on corruption, including within ZANU-PF, to ease pressure on the ruling party ahead of parliamentary elections next year.
The state Herald reported on Saturday that Vice President Joseph Msika had warned the government would deal sternly with "errant politicians who abuse their positions and threaten law enforcement agents".
Mugabe argues the economy has been sabotaged by local and foreign opponents of his drive to redistribute large tracts of white-owned commercial farms among landless blacks.
ENG bosses seek Zanu PF protection print friendly version
author/source:Zimbabwe Standard
published:Sun 4-Jan-2004
posted on this site:Mon 5-Jan-2004
Article Type : News
The closure of ENG has pushed three other banks towards ruin
By Rangarirai Mberi
Directors of troubled ENG Capital, arrested last week after failing to account for about $100 billion worth of investor funds, last week sought protection from Zanu PF legislators David Chapfika and Philip Chiyangwa, The Standard can reveal. Both MPs, who have vast business interests themselves, confirmed to The Standard yesterday that they had indeed met ENG directors Nyasha Watyoka, Gilbert Muponda and Elton Chitondo at Chiyangwa's office early last week, but strenuously denied any business links with the troubled outfit. Chiyangwa yesterday said he had met the three only as a facilitator for a meeting with Chapfika, who heads the Parliamentary Budget, Finance and Economic Planning committee. "What's wrong with that? I'm a public figure. For your own information, if Tsvangirai wants to meet Mugabe, I will be prepared to facilitate. I'm not afraid," Chiyangwa said.
Asked why ENG targeted him as a source of support, Chiyangwa said it was because of his long history of black empowerment, and support for struggling black businesses such as Zimbabwe Building Society and Universal Merchant Bank. Chapfika, a former director of Unibank which caved in under the weight of bad loans three years ago, yesterday denied any financial exposure to ENG. "I just bumped into them at his (Chiyangwa's) office. I hardly spent five minutes in there. I told them to come clean on their status, that if they were part and parcel of these speculative practices then the Reserve Bank had to act", Chapfika said, adding the ENG directors had admitted to him that they were operating without a licence.
Banking sources say the closure of ENG has pushed three more named banks towards financial ruin, as they had been exposed to ENG to varying extents. Bankers say they fear the contagion effect of the closure will spread wider, as Zimbabwe's biggest ever financial crisis continues to unravel. Police on Friday arrested two of the ENG directors Watyoka (28) and Muponda (30), hours after RBZ head of bank supervision, Stuart Gwasira, announced the central bank had shut down Century Discount House, a division of ENG Capital, and withdrawn its trading licence. Police spokesperson Oliver Mandipaka yesterday confirmed they were still holding the two on fraud charges, as police widened their search for the remaining directors. The two are expected to appear in court tomorrow.
ENG Capital bought Century Discount House from Century Holdings Limited for $1,6 billion in April last year, but ENG had kept the name "Century" owing to delays by banking regulators to approve a name change. Century Holdings CEO Gary Shoko immediately moved to distance his bank from the troubled ENG, telling The Standard in an interview on Friday that his bank had no exposure to ENG. "None of the companies within the Century Group was exposed in any way to Century Discount House or to ENG Asset Management", Shoko said. However, investigations by The Standard last week revealed a network of banks that had varied extents of exposure to ENG. One of the banks is a recently licenced entity, which is still rolling out its branch network, while the other, a large financial group, has been exposed to ENG through its own discount house.
ENG Capital was founded by a band of young directors, Chitondo, Watyoka and Muponda, and was headed by Lloyd Kazunga. Chitondo is separately a director of Wanai Finance, another of the country's ever-swelling ranks of asset management firms. The three directors were college mates at the National University of Science and Technology (NUST), and founded their outfit with hardly three years of industrial experience behind them. Trust Bank, named as one of the banks in trouble, has denied any exposure to ENG, and also shot down reports it had been placed under curatorship. "The Reserve Bank didn't find anything untoward regarding the status of our bank", Nyemba told reporters, however conceding that the bank would take "a little while" to heal after the negative perception which has hurt the bank in the past week.
In reaction to widespread market reports that Trust had ploughed central bank funds into the purchase of a substantial stock of bricks from Willdale and an entire six months supply of vehicles from Willowvale, Nyemba said his bank had simply extended support to both struggling companies. He insisted that Trust had assisted Willowvale to import car assembly kits to assemble passenger and light commercial vehicles. The bank had "ring fenced" its exposure to its assistance to the firm, he added. "The bank has since sold its shareholding in Willdale but has continued to support this important asset", Nyemba said. "Trust had also converted its Willdale debt into equity to save it from imminent collapse," said Nyemba.
Zimbabwe: Investment scandals end up in court
As the case against two directors of investment firm ENG continued, MP Philip Chiyangwa was remanded in custody to January 28 on allegations of attempting to defeat the course of justice, contempt of court and perjury, reports The Financial Gazette. The remand in custody of the flamboyant businessman comes after police had earlier ignored a High Court judgment to have him released, drawing the ire of human rights lawyers in the country. Magistrate Sukai Tongogara said the State's submissions that Chiyangwa could interfere with witnesses if granted bail were valid. 'There is a real likelihood the accused might interfere with State witnesses. He has earlier on threatened a police officer and therefore the State's worries are real,' said Tongogara. Police investigations into ENG were still going on and some of the collapsed company's assets were yet to be recovered although some vehicles had been found at Chiyangwa's home. Chiyangwa faces three criminal charges - obstructing the course of justice, contempt of court and perjury.
Full reports in The Financial Gazette
And The Herald
Chiyangwa has subsequently filed a notice of appeal in the High Court to contest the ruling denying him bail, reports The Herald.
Full report in The Herald
Full ZLHR statement on the Legalbrief site
Also facing trial in connection with the ENG saga are three First Mutual Limited Asset Management executives who appeared at the Harare Magistrates' Court on corruption charges involving $42bn. FML MD Godfrey Jowa (42), treasury executive Simba Dodzo (35) and finance executive Oliver Kamundimu (37) are applying for bail, according to a report in The Herald The charges against them arose from investments made by FML in ENG Capital Asset Management. The State alleges that the three, acting with the intention of deceiving their principal, the FML investment committee, authorised the dealing with ENG, a company that had no trade line with FML. In order to strengthen their deceit, it is alleged, they authorised requisitions or deal notes and cheques purporting that they were dealing with Century Discount House when in fact they were dealing with ENG.
Full report in The Herald
The process of winding up ENG Investments has started with the High Court granting a provisional order for liquidation and appointing a liquidator, reports The Herald.
Full report in The Herald
And in another financial scandal to hit the country, Harare provincial Magistrate Caroline-Anne Chigumira, lawyer Wilson Manase and prosecutor Blessmore Gorejena have been arrested on allegations they irregularly granted bail to a key suspect in the $7.7bn Trust Banking Corporation fraud case, reports The Herald. Gorejena represented the State when Witness Mahata was granted $6m bail in chambers. 'This is a clear case of people who corruptly granted bail to a hard core criminal without our consent. Did they expect us not to question such a glaring irregularity just because they are lawyers and court officials?' said fraud department Assistant Commissioner James Nyakotyo.
Full report in The Herald
Another lawyer has also found himself in hot water in connection with the case. Alex Mombesasa appeared before a Harare magistrate facing charges of attempting to defeat or obstructing the course of justice, reports The Herald. The charges against Mombesasa arose after a key suspect in the Trust Bank fraud was granted bail in chambers under unclear circumstances.
Mawere is a South African citizen
MAWERE
* Mawere gets R50 000 bail
* Mawere arrested by Interpol in SA
* Makamba repatriates externalised forex
* Court thwarts Makamba's freedom bid
* Makamba released, rearrested
* Makamba faces 22 forex offences
* Makamba arrested
By Dumisani Muleya and Augustine Mukaro and agencies
Last updated: Thu, 12 Nov 2009 14:59:25 GMT
ZIMBABWEAN business magnate Mutumwa Mawere who was arrested in South Africa on Tuesday is a South African, according to shock new revelations.
Mawere was released on R50 000 bail on Thursday and faces extradition to Zimbabwe to face charges of externalising millions of dollars in foreign currency.
South African police spokesperson Mary Martins-Elbrecht told the Zimbabwe Independent newspaper that Mawere had dual citizenship which is an offence in Zimbabwean law.
It is understood that Zimbabwean authorities want to interview Mawere over the alleged under-invoicing of asbestos exports through Southern Asbestos Sales in Johannesburg, after the Zimbabwean government exempted asbestos from having to be sold through the Minerals Marketing Corporation of Zimbabwe.
"He has dual citizenship and it's up to the courts to determine whether he can be extradited to Zimbabwe or not," Elbrecht is quoted as saying.
Mawere becomes the second close ally of Preident Robert Mugabe to be found to have dual citizenship after the Finance Minister, also arrested for externalising foreign currency, was outed as a Canadian citizen.
On Thursday, Mawere, one of Zimbabwe's richest businessman who recently paid more than R7-million to acquire a 60 percent stake in the plush Kilimanjaro nightclub, slammed Reserve Bank governor Gideon Gono for "displaying venom" in his duties.
Mawere said Gono was pursuing individuals and companies on trumped-up charges and in the process destroying the foundation of indigenous businesses as well as the economy at large.
"It is unfortunate and regrettable that Zimbabwe has sunk so low. For someone like me who has done so much for Zimbabwe to be accused on the basis of trumped-up charges shows that something has gone terribly wrong somewhere," Mawere said.
"Whose interests are being served by this crusade is not clear. What is clear though is that it is destroying the foundations of black business in Zimbabwe and replacing them with a RBZ governor who wants to be chief executive of Zimbabwe Inc."
Mawere said it was "appalling" to see a country engaged in an act of self-destruction "with Gono exerting more energy in hounding individuals - as if he was a police commissioner - than working on economic recovery.
"Sound economic policies can never be substituted with a display of venom and arresting individuals. People can try that but they will fail in ensuring economic recovery," he said.
"If Zimbabweans spend more time reasoning together on issues than throwing each other into cells it would be better for all of us. RBZ governors in history have been known to focus on core issues than spending time arresting people."
Mawere said the allegations against him were largely baseless while some were actually lies.
Mawere has rejected the allegations of externalisation, saying he was not a Zimbabwean resident and did not sit on his companies' boards.
It was not possible to confirm reports that Mawere was exposed by a whistleblower who had met a Zimbabwean investigating team from the Reserve Bank and police.
Mawere gained prominence in the mid-1990s after he bought the country's largest asbestos mining conglomerate, Shabani/Mashava Mines, which is part of the huge Africa Resources Ltd, with a sovereign guarantee
Mawere's business empire which has tentacles in almost all important sectors of the economy includes Africa Associated Mines. He also has confirmed interests in eight listed companies, General Beltings, Steelnet, Turnall, Fidelity Life, Zimre, Nicoz Diamond, CFI Holdings and First Bank. His firm Ukubambana/Kubatana Investments (UKI) also has large stakes in other listed companies.
In 1996, Mawere - who had previously worked for the International Finance Corporation, an arm of the World Bank - teamed up with the ruling party to start one of Zimbabwe's major banks, the First Banking Corporation.
Until recently, Mawere was considered President Mugabe's closest business crony. He is also a blue-eyed boy of Zimbabwe's Speaker of Parliament Emmerson Mnangagwa whose influence has waned in recent weeks after Zanu PF instituted a probe into it's own companies which have been under Mnangagwa's management.
"I Just Had To Respond" - Part 1
USA - I am a founder and former director of ENG Capital PVT LTD (ENG). My company was the first casualty of the so-called Anti-Graft war launched by RBZ Governor Gideon Gono in December 2003.
Central Bank Governor - Gideon Gono
I have had to field questions about the nature of ENG's problems and what led to its closure and current status .I had to respond .
I will try to limit response to the immediate business case of the Group the politics of the matter will be subject of another writing.
It should be noted ENG Capital Group was placed into liquidation at the request of the Directors as a way to secure the firm?s creditors and investors.
ENG has fully repaid all claims against it. All the creditors and investors have been fully repaid .This can be confirmed with the Liquidators at CAMELSA .Based on independent valuations and estimates ENG had assets of Z$ 180 billion against liabilities of $ Z 85 billion.
ENG was a solid business model and had a strong asset position and this point has been proven beyond any doubt given that All creditors have been fully repaid despite ENG assets being looted and deliberately undervalued.
The direct role of the RBZ led by Dr Gono was in creating a smoke screen and an atmosphere that paved the way for the elimination and externalization of all persons deemed to be undesirable by the government of Zimbabwe in the quest to silence all existing and potential pockets of resistance to bad policies which Gono was about to implement.
Dr Gono was appointed with a specific political mandate to deal with the financial services industry that was perceived at the time to undermine the regime and hitherto the government had no specific strategy to intimidate the private sector into compliance with bad policy formulation strategies.
The belief then and now was that the financial sector should be a tool for the ruling party and any participant un-affiliated with the ruling party has to be closed down or cowed into submission.
There is need to understand ENG Capital?s ability to mobilize Zimbabwe dollars. At its peak ENG was peerless and unrivalled in the Zimbabwean financial market in its ability to raise and access Zimbabwe dollars.
The ENG Capital Group treasury was made up of the following individual units Century Bank, Century Asset Management, Century Discount House, Leasing Company of Zimbabwe, ENG Asset Management and Hybri Micro-Finance Institution.
ENG Capital group had a market capitalization of US$ 175 million, just before the RBZ descended on the Institution. This made ENG one of the single biggest combined treasury units in the Zimbabwe Financial market.
Below is a brief ENG Group Structure
ENG HOLDINGS GROUP STRUCTURE
- SUBSIDIARIES
- ENG CAPITAL INVESTMENTS PVT LTD
- ENG ASSET MANAGEMENT PVT LTD
- ENG REAL ESTATE
- ENG NOMINEES PVT LTD
- ENG PRIVATE EQUITY (PVT) LTD
- ENG CAPITAL ADVISORY SERVICES
- ENG STRUCTURED FINANCE
ADDITIONAL MAJOR ASSETS OWNED
- Century Bank Holdings (now CFX bank)
- Leasing Company of Zimbabwe, Century Asset Managers)
- Century Discount House
- Hybri Micro-Finance Institution
- Care Insurance PVT LTD
- RestCel Insurance PVT LTD
- Amalgamated Health Services ? (Harare West Hospital )
- 15% of OK Zimbabwe Limited
- 15% of Zimplow Holdings Limited
- 20% Medtech Holdings Limited
- Hornet Re-Insurance PVT LTD
- Pearl Pension Fund Management
- 25 % Clan Holdings Limited
- 15 % Zimpapers
- Allied Conveyor Belts PVT LTD
- Real Estate including (Anastasia Court, Belgravia House, Thaine Building)
- Various Listed ZSE Listed shares
- Treasury Bills
- GMB Bills
- Cargill Commercial Paper
- $ 4 billion - Alliance Capital Debenture (representing 123 million First Mutual Life shares)
- 23 Million First Mutual Life shares
The installation of RTGS immediately allowed the Authorities to trace which Institutions were the biggest movers of money and the money market. The authorities were alarmed to learn that ENG (an unknown firm to them) and which didn't have a political Godfather? was allowed to control such resources.
A further study was made to trace the political inclination of the shareholders and directors. ENG was not well represented in the political ladders. The belief was that any independent financial resources could be used and was being used to clandestinely support the opposition or politicians deemed undesirable.
In addition business owners were supposed to show gratitude by donating and financing the political set up. Any meaningful business group was supposed to be well known and its owners be vetted by the authorities? political process. Any business which didn't fit that bill had to be either closed, nationalized or shareholding restructured. (By any means necessary).
Through extra-judicial and judicial measures pressure was brought to bear on selected individuals and institutions by the state machinery with the sole objective of punishing the designated persons. The allegations were that ENG Asset Management (PVT) LTD and not the directors had failed to pay Z$61 billion allegedly owed to investors.
Clearly if such amount was due and payable to creditors or investors, there were other legal remedies available to such investors but in the interests of political expediency, the state arrogated to itself the role of custodian investor with no legal foundation and proceeded to attempt to assert purported rights of private sector investors.
The ENG matter was extensively covered in the media and careers were destroyed as thriving institutions controlled and managed by indigenous business people were systematically targeted. The same media has failed to follow up and highlight that in fact ENG has managed to repay creditors and investors despite assets being looted .
Banks and Asset management companies because of huge profits were generally reported to be the source of the problems in the financial services industry and causing economic meltdown facing the nation. Against this background, there was a need to identify and punish the alleged culprits and ENG provided a convenient scapegoat, visible and the high profile victim needed to capture the imagination of the general public that Zimbabwe had a new no-nonsense boss in RBZ Governor Dr Gono.
Dr Gono blamed Financial Institutions for fueling inflation and currency depreciation Dr.Gono closed down or nationalized the following institutions ; Trust Bank, Royal Bank, Barbican Bank, Rapid Financial Holdings, Sagit, ENG Capital,Intermarket and many others.
Dr Gono promised the nation that economic recovery was now certain and failure was not an option. Inflation was then at 200% and now its at least 13,4 billion %.Zimbabwe dollar was exchanging at Z$6000 = US$ 1,and now its Z$ 4,000,000,000,000 for each US$. Shops are empty. Banks have no cash.
Parliament has no running water .Harare has no water .No electricity. This is despite all the fanfare that came with the anti-graft crusade that all will be perfect and well if we get rid of profiteering Banks and Financial Institutions.
This just proves scapegoat mentality does not solve national problems. What is required is a national vision that taps into all Zimbabweans? best talent and ability rather than some party or patronage based allocation of responsibilities not matched by ability to deliver .
In 2002, ENG Capital applied for a banking license. The application was quickly dismissed .Due to this failure, in April 2003 ENG acquired Century Discount house as a strategy to enter the Banking sector. A cash consideration was paid. ENG then applied to the Registrar of Banks for the approval of change of shareholding structure.
The approval was denied .On further enquiring about the approval denial the Registrar?s officers mentioned that the approval will not be for the coming mainly because of ENG Directors age and unknown political background and views.
They advised us to restructure our shareholding to accommodate politically acceptable individuals in addition to start being active in funding political activities that would maintain the status quo. This situation spelled a disaster for ENG as I was of the view that we should not be part of any arrangement that could compromise our reputation, image and market perceptions.
In the meantime the seller (Century Holdings) of Century Discount House was not in a position to refund ENG Capital of the purchase price paid. This forced ENG Capital to acquire a controlling stake in Century Holdings, which was listed on the Zimbabwe Sock Exchange.
This at least limited the potential loss since the purchase of Century Discount House was now an inter-company transaction. Obviously the refusal to restructure the shareholding to accommodate those politically correct and the refusal to being active in funding political activity didn?t please those who felt it was their God given right to receive support from any and all companies operating in the country. This independence was viewed as being lack of gratitude.
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On 31 December 2003 at the instigation of the RBZ (using military and security officers), ENG Capital was placed under voluntary liquidation to secure and repay investors and creditors. Although the creditors and investors, whose rights the government sought to assert without their consent, have now been fully repaid the media has not covered this aspect of the story .
Covering the full repayment exposes the hypocrisy of the RBZ and the unwarranted and draconian actions that against private individuals in a manner that violates their constitutional rights.
On July 31 2006 more than two and half years after the arrest my co-accused who remained in Zimbabwe was removed from remand and the clerk of court ordered to return his $ 150 million bail and $ 700 million surety.
The media including but not limited to the state media ran grossly inaccurate and biased attack articles on my character and reputation. Articles without any back up of facts were printed deliberately understating ENG assets simultaneously magnifying liabilities.
Many articles misrepresented ENG financial position and activities. Most newspapers refused to publish a rebuttals or give them equal exposure as their initial, false and malicious articles .
This is the kind of hostile environment that faces a normal business in the current Zimbabwe. How can foreign investors come if the local ones are routinely victimized as a matter of policy? Given the above facts and order of events it is small wonder that the country has been experiencing unprecedented levels of capital flight and brain drain.
Considering the wide media publicity the ENG Capital matter received one would think the same media would have followed up and highlighted the fact that ENG Capital managed to repay all creditors and investors.
The lack of such reporting only serves to show how far Zimbabwe has to go in terms of creating level business playing field and fair media coverage of critical events affecting the nation.
"I Just Had To Respond" - Part 2
SI wrote my first article not seeking to correct history or self defense. I simply had to state facts and then people can digest for themselves.
Central Bank Governor - Gideon Gono
I have been silent for 5 years and could have been silent for another 5. But who would benefit from my silence?
The ENG issue cannot and should not be viewed in isolation but rather in context of the general occurrences in Zimbabwe during that period up to present day.
Respectable business people were labeled all sorts of names. Many have kept silent not because they are guilty but they chose privacy. If Zimbabwe is trying to build a better and progressive nation these business people should be encouraged to share their stories and experiences.
It is only after we hear their version of events can we create a credible value system.
I am encouraged by the emails sent to me, especially the hate mail which I find particularly motivating as I believe it allows further exchange of divergent views which hopefully will allow us develop a more vibrant and progressive nation.
I personally have nothing against Dr Gono; my assumption is that he is just doing his job. And as such what needs to be challenged are the man's policies not his person. Dr Gono has presided over the massive brain drain in the financial sector particularly.
During that period he has succeeded in transforming the RBZ into the Reserve Bank of ZANU (PF).
In short he has turned the central Bank into the party's finance department. The effect of this is that now Zimbabwe does not have a central Bank. It is important that this be scrutinized and exposed because Zimbabwe is undergoing a transformation and the new order needs to avoid this.
Is it going to be acceptable for MDC or Mavambo/Kusile transform the country's central bank to a tool to effect the party's agenda without parliamentary oversight and approval? The concept here is to look at the principle and not the person.
Zimbabwe's national institutions are being corrupted to such an extent that unbelievable activities are now just being viewed as normal or acceptable. Why would the Central Bank directly buy plasma TVs and cars for the judiciary officers?
What does the Central Bank or its officers/Governor expect in return for the favor? Is this not supposed to be done thorough normal parliamentary budget allocation to various ministries? It is this trend of rule bending and goal post shifting that results in the economy mal-functioning because everything is just unpredictable.
The country can only attract investment and investors if there is rule of law, not rule by law. The idea of changing rules just to suit an individual or isolated incident is disastrous. Zimbabwe had a fairly well developed legal system; the companies Act, Banking Act and Collective Investments Act were well thought regulations governing Banks, Companies and other financial institutions. But during the so-called anti-graft campaign these rule and regulations were over-ridden in dramatic fashion. This brings instability and increases capital flight and brain drain.
This is beyond personalities. It's beyond ENG. This is about confidence building and stable institutional frame work that assists Zimbabwe to regain former glory. Even though land reform was necessary, during the fast track land reform it became normal for individuals to take the law into their own hands. This set a bad precedence .Once it becomes clear that there is selective application of the rule of law then there is no incentive to uphold rules and regulations.
As part of the stage managed anti-graft campaign of 2003-4 I was arrested after a team, masquerading as RBZ Inspectors led by a soldier-(Major Santu) ransacked ENG Capital. I later learnt Major Santu was in fact a soldier, seconded by the Joint Operations Command (J.O.C) to 'assist' Dr Gono run the RBZ.
Now if you have soldiers running the Central Bank what does that tell you about all other departments of Governments? It is clear the soldiers and security services are now running the country, ignoring the normal rules and regulations that would make Zimbabwe an attractive investment destination. Now why would any normal country have soldiers manning the Central Bank?
It's just unfortunate that a majority of Zimbabweans are now starting to know what J.O.C is. This is so because when events are happening to someone people chose to ignore and not pay attention as to what exactly is the allegation and who is doing what to whom.
The point is Zimbabweans need collective national value system and when ever that value system is violated people must speak out and take action to defend that value system. That is how strong societies are built. Since time immemorial a successful lawless society is unheard.
Zimbabwe's current problems may pass but they will return as long as there is no cultural shift amongst Zimbabweans themselves. The notion that it only happened to Muponda or Mawere therefore it's not my problem is disturbing. When the anti-graft operation was implemented it was welcomed as a messianic mission ridding the nation of all ills.
Zimbabweans only started to be concerned when it got closer to them personally when Operation Murambatsvina, Operation Sunrise Operation Mavhotera papi were being implemented. The fact is as a nation we must confront situations with facts and voice concern where ever the rule of law is being ignored.
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There is need to look at the full picture and assess the implication of whole sale arrest of business people for the purpose of investigating them. The norm else where is to investigate then arrest if there is a case. The simple failure to apply the laws uniformly has accelerated the economic decline.
Businesses destroyed or taken over Royal Bank, Intermarket, Barbican, Intermarket, Rapid, Sagit, Africa Resources, Century Bank. And this all happened within a space of less than 6 months. Jobs were lost. Business people were scandalized, arrested or haunted out of the country.
The list is rather long but it includes such luminaries as Dr Makoni, Mawere, Mushore, Makoni, Chekeche, Jowa, Sachikonye, Chando, Durajadi Simba, Muzwimbi, Nyemba,Vingirai, Zimuto , Makamba. Is this normal to see a whole generation of entrepreneurs scandalized and lose all creditability and all at the same time?
What are the implications on foreign investor sentiment when they see such hostility to local investors? These are respectable and pioneer first generation entrepreneurs who find themselves scandalized and somehow classified criminal even though there is no clear evidence against them.
It is clear there is need to look beyond individuals and start reviewing wider concepts that are at play. Individuals come and pass, therefore it's not worth the effort or attention to just focus on the individual whilst ignoring the irreparable damage being done to national institutions and their credibility.
Royal Entrepreneurship - The Case of Royal Bank Zimbabwe Ltd Formation
By Dr Tawafadza A. Makoni
The deregulation of the financial services in the late 1990s resulted in an explosion of entrepreneurial activity leading to the formation of banking institutions. This chapter presents a case study of Royal Bank Zimbabwe, tracing its origins, establishment, and the challenges that the founders faced on the journey. The Bank was established in 2002 but compulsorily amalgamated into another financial institution at the behest of the Reserve Bank of Zimbabwe in January 2005.
Entrepreneurial Origins
Any entrepreneurial venture originates in the mind of the entrepreneur. As Stephen Covey states in The 7 Habits of Highly Effective People, all things are created twice. Royal Bank was created first in the mind of Jeffrey Mzwimbi, the founder, and was thus shaped by his experiences and philosophy.
Jeff Mzwimbi grew up in the high density suburb of Highfield, Harare. On completion of his Advanced Level he secured a place at the University of Botswana. However he decided against the academic route at that time since his family faced financial challenges in terms of his tuition. He therefore opted to join the work force. In 1977 he was offered a job in Barclays Bank as one of the first blacks to penetrate that industry. At that time the banking industry, which had been the preserve of whites, was opening up to blacks. Barclays had a new General Manager, John Mudd, who had been involved in the Africanisation of Barclays Bank Nigeria. On his secondment to Zimbabwe he embarked on the inclusion of blacks into the bank. Mzwimbi's first placement with Barclays was in the small farming town of Chegutu.
In 1981, a year after Independence, Jeff moved to Syfrets Merchant Bank. Mzwimbi, together with Simba Durajadi and Rindai Jaravaza, were the first black bankers to break into merchant banking department. He rose through the ranks until he was transferred to the head office of Zimbank - the principal shareholder of Syfrets - where he headed the international division until 1989.
The United Nations co-opted him as an advisor to the Reserve Bank in Burundi and thereafter, having been pleased by his performance, appointed him a consultant in 1990. In this capacity he advised on the launch of the PTA Bank travellers' cheques. After the consultancy project the bank appointed him to head the implementation of the programme. He once again excelled and rose to become the Director of Trade Finance with a mandate of advising the bank on ways to improve trade among member states. The member states were considering issues of a common currency and common market in line with the European model. Because the IFC and World Bank had unsuccessfully sunk gigantic sums of funds into development in the region, they were advocating a move from development finance to trade finance. Consequently PTA Bank, though predominantly a development bank, created a trade finance department. To craft a strategy for trade finance at a regional level, Mzwimbi and his team visited Panama where the Central Americans had created a trade finance institution. They studied its models and used it as a basis to craft the PTA's own strategy.
Mzwimbi returned to Zimbabwe at the conclusion of his contract. He weighed his options. He could rejoin Barclays Bank, but recent developments presented another option. At that time Nick Vingirai had just returned home after successfully launching a discount house in Ghana. Vingirai, inspired by his Ghanaian experience, established Intermarket Discount House as the first indigenous financial institution. A few years later NMB was set up with William Nyemba, Francis Zimuto and James Mushore being on the ground while one of the major forces behind the bank, Julias Makoni, was still outside the country. Makoni had just moved from IFC to Bankers' Trust, to facilitate his ownership of a financial institution. Inspired by fellow bankers, a dream took shape in Mzwimbi's mind. Why become an employee when he could become a bank owner? After all by this time he had valuable international experience.
The above experience shows how the entrepreneurial dream can originate from viewing the successes of others like you. The valuable experiences acquired by Mzwimbi would be critical on the entrepreneurial journey. An entrepreneurial idea builds on the experiences of the entrepreneur.
First Attempts
In 1990 Jeff Mzwimbi was approached by Nick Vingirai, who was then Chairman of the newly resuscitated CBZ, for the CEO position. Mzwimbi turned down the offer since he still had some contractual obligations. The post was later offered to Gideon Gono, the current RBZ governor.
Around 1994, Julias Makoni (then with IFC), who was a close friend of Roger Boka, encouraged Boka to start a merchant bank. At this time Makoni was working at setting up his own NMB. It is possible that, by encouraging Boka to start, he was trying to test the waters. Then Mzwimbi was seeing out the last of his contract at PTA. Boka approached him at the recommendation of Julias Makoni and asked him to help set up United Merchant Bank (UMB). On careful consideration, the banker in Mzwimbi accepted the offer. He reasoned that it would be an interesting option and at the same time he did not want to turn down another opportunity. He worked on the project with a view to its licensing but quit three months down the line. Some of the methods used by the promoter of UMB were deemed less than ethical for the banking executive, which led to disagreement. He left and accepted an offer from Econet to help restructure its debt portfolio.
While still at Econet, he teamed up with the late minister Dr Swithun Mombeshora and others with the intent of setting up a commercial bank. The only commercial banks in the country at that point were Standard Chartered, Barclays Bank, Zimbank, Stanbic and an ailing CBZ. The project was audited by KPMG and had gained the interest of institutional investors like Zimnat and Mining Industry Pension Fund. However, the Registrar of Banks in the Ministry of Finance, made impossible demands. The timing of their application for a licence was unfortunate because it coincided with a saga at Prime Bank in which some politicians had been involved, leading to accusations of influence peddling. Mombeshora, after unsuccessfully trying to influence the Registrar, asked that they slow down on the project as he felt that he might be construed as putting unnecessary political pressure on her. Mzwimbi argues that the impossible stance of the Registrar was the reason for backing off that project.
However other sources indicate that when the project was about to be licensed, the late minister
demanded that his shareholding be increased to a point where he would be the majority shareholder. It is alleged that he contended this was due to his ability to leverage his political muscle for the issuance of the licence.
Entrepreneurs do not give up at the first sign of resistance but they view obstacles in starting up as learning experiences. Entrepreneurs develop a "don't quit" mind-set. These experiences increase their self -efficacy. Perseverance is critical, as failure can occur at any time.
Econet Wireless
The aspiring banker was approached, in 1994 by a budding telecommunication entrepreneur, Strive Masiyiwa of Econet Wireless, to advise on financial matters and help restructure the company's debt. At that time Mzwimbi thought that he would be with Econet probably for only four months and then return to his banking passion. While at Econet it became apparent that, once licensed, the major drawback for the telecommunication company's growth would be the cost of cell phone handsets. This presented an opportunity for the banker, as he saw a strategic option of setting up a leasing finance division within Econet that would lease out handsets to subscribers. The anticipated four months to licensing of Econet dragged into four years, which encompassed a bruising legal struggle that finally enabled the licensing against the State's will. Mzwimbi's experience with merchant banking proved useful for his role in Econet's formation. With the explosive growth of Econet after an IPO, Mzwimbi assisted in the launch of the Botswana operations in 1999. After that, Econet pursued the Morocco licence. At this stage, the dream of owning a bank proved stronger than the appeal of telecoms. The banker faced some tough decisions, as financially he was well covered in Econet with an assured executive position that would expand with the expansion of the network. However the dream prevailed and he resigned from Econet and headed back home from RSA, where he was then domiciled.
His Econet days bestowed on him a substantial shareholding in the company, expanded his worldview and taught him vital lessons in creating an entrepreneurial venture. The persistence of Masiyiwa against severe government resistance taught Mzwimbi critical lessons in pursuing his dream in spite of obstacles. No doubt he learnt a lot from the enterprising founder of Econet.
Debut Royal Bank
On his return in March 2000, Mzwimbi regrouped with some of his friends, Chakanyuka Karase and Simba Durajadi, with whom he had worked on the last attempt at launching a bank. In 1998 the Banking Act was updated and a new statutory instrument called the Banking Regulations had been enacted in the light of the UMB and Prime Bank failures.
These required that one should have the shareholders, the premises and equipment all in place before licensing. Previously one needed only to set up an office and hire a secretary to acquire a banking license. The licence would be the basis for approaching potential investors. In other words it was now required that one should incur the risk of setting up and purchasing the IT infrastructure, hire personnel and lease premises without any assurance that one would acquire the licence. Consequently it was virtually impossible to invite outside investors into the project at this stage.
Without recourse to outside shareholders injecting funds, and with minimal financial capacity on the part of his partners, Mzwimbi fortuitously benefited from his substantial Econet shares. He used them as collateral to access funds from Intermarket Discount House to finance the start up - acquired equipment like ATMs, hired staff, and leased premises. Mzwimbi recalls pleading with the Central Bank and the Registrar of Banks about the oddity of having to apply for a licence only when he had spent significant amounts on capital expenditure - but the Registrar was adamant.
Finally, Royal Bank was licensed in March 2002 and, after the prerequisite pre-opening inspections by the Central Bank, opened its doors to the public four months later.
Entrepreneurial Challenges
The challenges of financing the new venture and the earlier disappointments did not deter Mzwimbi. The risk of using his own resources, whereas in other places one would fund a significant venture using institutional shareholders' capital, has already been discussed. This section discusses other challenges that the entrepreneurial banker had to overcome.
Regulatory Challenges and Capital Structure
The new banking regulations placed shareholding restrictions on banks as follows:
*Individuals could hold a maximum of 25% of a financial institution's equity
*Non-financial institutions could hold a maximum of 10% only
*A financial institution however could hold up to a maximum of 100%.
This posed a problem for the Royal Bank sponsors because they had envisaged Royal Financial Holdings (a non-financial corporate) as the major shareholder for the bank. Under the new regulations this could hold only 10% maximum. The sponsors argued with the Registrar of Banks about these regulations to no avail. If they needed to hold the shares as corporate bodies it meant that they needed at least ten companies, each holding 10% each. The argument for having financial institutions holding up to 100% was shocking as it meant that an asset manager with a required capitalisation of $1 million would be allowed by the new law to hold 100% shareholding in a bank which had a $100 million capitalisation yet a non-banking institution, which may have had a higher capitalisation, could not control more than 10%. Mzwimbi and team were advised by the Registrar of Banks to invest in their personal capacities. At this point the Reserve Bank (RBZ) was simply involved in the registration process on an advisory basis with the main responsibility resting with the Registrar of Banks. Although the RBZ agreed with Mzwimbi's team on the need to have corporations as major shareholders due to the long term existence of a corporation as compared to individuals, the Registrar insisted on her terms. Finally, Royal Bank promoters chose the path of satisficing- and hence opted to invest as individuals, resulting in the following shareholding structure:
*Jeff Mzwimbi - 25%
*Victor Chando - 25%
*Simba Durajadi- 20%
*Hardwork Pemhiwa- 20%
*Intermarket Unit Trust - 2% (the only institutional investor)
*Other individuals - less than 2% each.
The challenge to acquire institutional investors was due to the restrictions cited above and the requirement to pump money into the project before the licence was issued. They negotiated with TA Holdings, which was prepared to take equity holding in Royal Bank.
So tentatively the sponsors had allocated 25% equity for Zimnat, a subsidiary to TA Holdings. Close to the registration date, the Zimnat negotiators were changed. The incoming negotiators changed the terms and conditions for their investment as follows:
*They wanted at least a 35% stake
*The Board chairmanship and chairmanship of key committees - in perpetuity.
The promoters read this to mean their project was being usurped and so turned TA Holdings down. However, in retrospect Mzwimbi feels that the decision to release the TA investment was emotional and believes that they should have compromised and found a way to accommodate them as institutional investors. This could have strengthened the capital base of Royal Bank.
Credibility Challenges
The main sponsors and senior managers of the bank were well known players in the industry. This reduced the credibility gap. However some corporate customers were concerned about the shareholding of the bank being entirely in the hands of individuals. They preferred the bank risk to be reduced by having institutional investors. The new licensing process adversely affected access to institutional investors. Consequently the bank had institutional shareholders in mind for the long term. They claim that even the then head of supervision and licensing at RBZ, agreed with the promoters' concern about the need for institutional investors but the Registrar of Banks overruled her.
Challenges of Explosive Growth
The strategic plan of Royal Bank was to open ten branch offices within five years. They planned to open three branches in Harare in the first year, followed by branches in Bulawayo, Masvingo, Mutare and Gweru within the next year. This would have been followed by an increase in the number of Harare branches.
From their analysis they believed that there was room for at least four more commercial banks in Zimbabwe. A competitor analysis of the industry indicated that the government controlled Zimbank was the major competitor, CBZ was struggling and Stanbic was not likely to grow rapidly. The bigger banks, Barclays and Standard Chartered, were likely to scale down operations. The promoters of the bank project had observed in their extensive international experie nce that whenever the economy was indigenised in Africa, these multinational banks would dispose of their rural branches. They were therefore positioning themselves to exploit this scenario once it presented itself.
The anticipated opportunity presented itself earlier than expected. On an international flight with the Standard Chartered Bank CEO, Mzwimbi, confirmed his interest in a stake of the bank's disinvestments which was making rounds on the rumour mill. Although surprised, the multinational banker agreed to give the two month old entrepreneurial bank the right of first refusal on the fifteen branches that were being disposed of.
The deal was negotiated on a lock, stock and barrel basis. When the announcement of the deal was made internally, some employees resisted and politicised the issue. The Standard Chartered CEO then offered to proceed on a phased basis with the first seven banks going through, followed by the others later. Due to Mzwimbi's savvy negotiating skills and the determination by Standard Chartered to dispose of the branches, the deal was successfully concluded, resulting in Royal Bank growing from one branch to seven outlets within the first year of operation. It had exceeded their projected growth plan.
Due to what Mzwimbi calls divine favour, the deal included the real estate belonging to the bank. Interestingly, Standard Chartered had failed to get bank buildings on lease and so in all small towns they had built their own buildings. These were thus transferred within the deal to Royal Bank. Inherent in the deal was an inbuilt equity from the properties since the purchase price of $400 million was heavily discounted.
Shortly after that, Alex Jongwe, the CEO of Barclays Bank, approached Royal Bank to offer a similar deal to the Standard Chartered acquisition of rural branches. Barclays offered eight branches, of which Royal initially accepted six. Chegutu and Chipinge were excluded, since Royal already had a presence there.
However after failing to dispose of those two branches, Barclays came back and asked Royal "to take them for a song". Mzwimbi accepted these for two strategic reasons, namely the acquisitions gave him physical assets (the buildings) that he could lease out to anyone who decided to expand into those areas and secondly, that created a monopoly in those towns. With time, the fortuitous inclusion of real estate into the deal increased the wealth of Royal Bank as the prices of properties skyrocketed with hyperinflation.
One of the major key drivers of the Zimbabwean economy is agriculture. After the failed Land Donors Conference in 1998 and the subsequent land reform programme, it was evident to the established banks that commercial farming would be significantly affected.
They sought to quit the small towns since their major clients were commercial farmers. Strategically to acquire these branches when the major source of their revenue was under threat would have required that Royal Bank should have put in place an alternative source of revenue from farming. It is not clear whether this had been considered during these acquisitions.
The acquisition increased Royal's branch network to 20 and the staff complement by 50. Incidentally, the growth created problems of managing the system as well as cultural issues. The highly unionised Standard Chartered employees were antagonistic to management as compared to the trusting Royal culture. This acquisition resulted in potential culture challenges. Management controlled this by introducing Norton and Kaplan's Balanced Scorecard system in an effort to manage the cultural clashes of the three systems.
The Challenge of Financing Acquisition
A major challenge in acquisitions is the financing structure. During licensing the Registrar of Banks refused to accept the nearly $200 million that had been spent by the promoters of Royal Bank as capital. She insisted that this be recognised as pre-operating expenses and therefore wanted to see fresh capital amounting to $100 million. The change of rules posed a challenge for Mzwimbi's team. However, being an astute deal maker he strategically conceptualised an arrangement whereby the $170 million worth of equipment purchased be accounted for as belonging to Royal Financial Holdings and made available to Royal Bank on a lease basis. This would then be sold to the bank as it grew. The RBZ was appraised of this decision and accepted it, and even noted in the inspection report the amount of expenditure spent pre-operatively by the promoters. The remainder of the pre-operative expenses were converted into nonvoting non-convertible preference shares of Royal Bank.
In January 2003 commercial bank capitalisation was increased to $500 million by the regulator and hence there was a need for recapitalisation. This coincided with the branch acquisition deals. At this stage the Royal Bank team decided to partially fund the acquisition through a conversion of the preference shares into ordinary shares and partially from fresh capital injected by the shareholders. Since the bank was now performing well, it purchased the capital equipment, owned by Royal Financial Holdings, which it had been leasing. This deal included the redistribution and balancing of shareholdings in Royal Bank to conform to the statutory requirements. Retrospectively it may be viewed as a strategic blunder to have moved the equipment into the bank ownership. Considering the "sale" of Royal Bank assets to ZABG, if these and the real estate had been warehoused into RFH the take-over may have been difficult. This highlights the failure sometimes by entrepreneurs to appreciate the importance of asset protection mechanisms while still small.
However the RBZ accused the shareholders of using depositors' funds for the recapitalisation of the bank. Partly this is due to a misunderstanding that RFH is the holding company of Royal Bank and so sometimes accounts flowing from Royal Financial Holdings were accounted by RBZ investigators as Royal Bank funds. These allegations formed part of the allegations of fraud against Mzwimbi and Durajadi when they were arrested in September 2004. Subsequently the courts cleared them of any fraudulent activities in January 2007.
Managerial Challenges
Retrospectively, Mzwimbi views his managerial team as being excellent apart from some "weaknesses in the finance department". He assembled a solid team from various banking backgrounds. The most significant ones became founding shareholders like Durajadi Simba at treasury, the late Sibanda in charge of the lending department. Faith Ngwabi-Bhebhe, then with Kingdom, helped lay a solid foundation of human resource systems for the bank.
However, they had a challenge finding a financial director. The new statutory instrument required that CVs of all corporate officers be made available for vetting when the licence was applied for. Without a licence one could not promise someone in current employment a job and submit his CV as this would reflect badly on the promoters. Eventually they hired a chartered accountant without banking experience. Initially they thought this was a stop-gap measure.
With the unanticipated growth, they forgot to revisit this department to strengthen it. Because of these weaknesses the bank continued to face challenges in the treasury department, despite the gallant efforts of the financial director. Strangely, when other executive directors were arrested the FD was left untouched and yet all the issues at stake arose from treasury activities. It would appear in retrospect that the FD was intimidated into providing incriminating evidence for the others. She too was threatened with arrest.
Successful entrepreneurial ventures in a growth phase need both strong leaders and strong managers. It's not enough to have strong leadership skills. As Ed Cole said, "It's easier to obtain than to maintain." The role of strong managers is to create the capacity to maintain what strong entrepreneurial leaders acquire. Interestingly a new field of research, Strategic Entrepreneurship now recognises the need for both entrepreneurial and strategic management competences for successful ventures.
Strategic Growth Plans
Royal Bank's strategic intent was to create a full house of financial services. The plan included a commercial bank, a discount house, an insurance company, a building society and an asset management service. However the vision was later refined and the plans for a discount house were dropped, since a strong commercial bank with a powerful dealing room would serve the same purpose. A strong asset manager would also relieve the need for a discount house.
With the significant branch network, the commercial bank was solid but needed a presence in a few major centres e.g. Masvingo and Gweru. In Gweru they could not locate suitable premises.
In Masvingo, after a struggle they were offered premises which had previously been earmarked for Trust Bank. With Trust Bank facing challenges, it abandoned Masvingo. However, Royal was placed under a curator when it was about to move in.
Royal Bank courted Finsreal Asset Managers for a potential acquisition since there were synergies and shared beliefs. It had a solid corporate customer base and very good growth prospects since an astute entrepreneur led it. Unfortunately the deal was aborted at the last minute when the owner opted out. After the Finsreal flop, Mzwimbi and his team pursued the asset manager through organic growth. They developed their own company -Regal Asset Managers - during the last quarter of 2003. At this stage the capital requirements and licensing process of asset managers was fairly easy. Asset managers were quite profitable, with minimal regulatory controls. Regal Asset Managers completed two good deals, namely: a management buyout of Screen Litho, a printing concern, and a big deal for First Mutual at its demutualisation.
The Screen Litho deal had been offered to venture capitalists but their demands were excessive. That is when Regal Asset Managers was set up and concluded a funding deal through Royal Financial Holdings (RFH), resulting in RFH holding 99% of Screen Litho which was to be off- loaded once management was in a solid financial position. Screen Litho is performing very well and hence this investment has proven successful. The entrepreneurial Mzwimbi thus diversified his financial portfolio through this deal.
For the building society, Royal eyed First National Building Society (FNBS) and almost signed a memorandum of agreement. Royal Bank was almost ready to transfer its staff mortgage facility to FNBS, when a close friend with a powerful position in the Society discouraged it from committing to the deal without divulging the reasons. A short while later FNBS was placed under a curator, with the RBZ citing cases of fraud by the top executives. The increasingly acquisitive Royal Bank entrepreneurs shifted and trained their guns at Beverly Building Society. Intermarket had already failed to consummate a deal with Beverley. Royal Bank was now competing with African Banking Corporation (ABC), which beat it to an agreement but was denied shareholder authority to complete the deal. Royal Bank then went back to wooing Shingai Mutasa of TA Holdings in an effort to increase its institutional shareholder base. He was keen on the deal.
Mutasa was acquainted with the two British owners of Beverley and one of his board members sat on the Beverley Building Society board. His support would have been crucial in the deal. However this process was overtaken by events, as the incoming RBZ governor superintended a monetary policy which led the financial sector into a tailspin.
Some young entrepreneurs approached Royal Bank seeking for support to establish an insurance company. Since this was in line with Royal's strategic plan it consented and helped start Regal Insurance Company. Royal Bank originated the name Regal Insurance.
Once the licence was acquired there were some shareholder disputes and Royal Bank distanced itself from the deal. The young entrepreneurs who had been supported by Royal Bank lost the company to the other shareholders.
The final thrust in the strategic plan was establishing a stock broking firm. An idiosyncrasy with stock broking licences is that they are not issued to an institution but to a person. Intermarket had the highest number of stock broking licences. Mzwimbi approached the Intermarket stock broking CEO, who was a friend, about the prospects of acquiring one of the stockbrokers and he did not seem to have a problem with that. At the same time Victor Chando, a major shareholder in Royal Bank, brought to the table his interest in acquiring Barnfords Securities. He was encouraged to pursue the deal with the help of Royal Bank with the plan of bringing it in-house as soon as possible. All Royal Bank deals would now be channelled through Barnfords.
It appears that Royal bank developed a strong appetite for deals. One wonders what it would have been like if it had taken time to develop strong systems and capacity before attempting so many deals. What could have been avoided if the appetite for deals had been controlled? Entrepreneurs may need to exercise restrain in their expansion in order to create capacities to absorb and consolidate the growth.
Article Source: http://EzineArticles.com/?expert=Dr_Tawafadza_A._Makoni
ENTREPRENEURIAL CHALLENGES - The Case of Royal Bank Zimbabwe Ltd
By Dr Tawafadza A. Makoni
Industry Shake-up
In December 2003 Mzwimbi went on a well deserved family vacation to the United States, satisfied with the progress and confident that his sprawling empire was on a solid footing. However a call from a business magnate in January 2004 alerted him to what was termed a looming shake- up in the financial services sector. It appears that the incoming governor had confided in a few close colleagues and acquaintances about his plans. This confirmed to Mzwimbi the fears that were arising as RBZ refused to accommodate banks which had liquidity challenges.
The last two months of 2003 saw interest rates soar close to 900% p.a., with the RBZ watching helplessly. The RBZ had the tools and capacity to control these rates but nothing was done to ease the situation. This hiking of interest rates wiped out nearly all the bank's income made within the year. Bankers normally rely on treasury bills (TBs) since they are easily tradable. Their yield had been good until the interest rates skyrocketed. Consequently bankers were now borrowing at higher interest rates than the treasury bills could cover. Bankers were put in the uncomfortable position of borrowing expensive money and on-lending it cheaply. An example at Royal Bank was an entrepreneur who borrowed $120 million in December 2003, which by March 2004 had ballooned to $500 million due to the excessive rates. Although the cost of funds was now at 900% p.a., Royal Bank had just increased its interest rates to only 400% p.a, meaning that it was funding the client's shortfall. However this client could not pay it and just returned the $120 million and demonstrated that he had no capacity to pay back the $400 million interest charge. Most bankers accepted this anomaly because they thought it was a temporary dysfunction perpetuated by the inability of an acting governor to make bold decisions. Bankers believed that once a substantive governor was sworn in he would control the interest rates. Much to their dismay, on assuming the governorship Dr. Gono left the rates untamed and hence the situation worsened. This scenario continued up to August 2004, causing considerable strain on entrepreneurial bankers.
On reflection, some bankers feel that the central bank deliberately hiked the interest rates, as this would allow it to restructure the financial services sector. They argue that during the cash crisis of the last half of 2003, bank CEOs would meet often with the RBZ in an effort to find solutions to the crisis. Retrospectively they claim that there is evidence indicating that the current governor though not appointed yet was already in control of the RBZ operations during that time period and was thus responsible for the untenable interest rate regime.
In January 2004, after his vacation, Mzwimbi was informed by the RBZ that Royal had been accommodated for $2 billion on the 28th of December 2003. The Central Bank wanted to know whether this accommodation should be formalised and placed into the newly created Troubled Bank Fund. However, this was expensive money both in terms of the interest rates and also in terms of the conditions and terms of the loan. At Trust Bank, access to this facility had already given the Central Bank the right to force out the top executives, restructure the Board and virtually take over the management of the bank.
Royal Bank turned down the offer and used deposits to pay off the money. However the interest rates did not come down.
During the first quarter of 2004 Trust Bank, Barbican bank and Intermarket Bank were identified as distressed and put under severe corrective orders by the Central Bank.
Royal Assault
Royal Bank remained stable until March 2004. People who had their funds locked up in Intermarket Bank withdrew huge sums of funds from Royal Bank while others were moving to foreign owned banks as the perception created by Central Bank was read by the market to mean that entrepreneurial bankers were fraudsters.
Others withdrew their money on the basis that if financial behemoths like Intermarket can sink, then it could happen to any other indigenously controlled bank. Royal Bank had an advantage that in the smaller towns it was the only bank, so people had no choice. However even in this scenario there were no stable deposits as people kept their funds moving to avoid being caught unawares. For example in one week Royal Bank had withdrawals of over $40 billion but weathered the storm without recourse to Central Bank accommodation.
At this time, newspaper reports indicating some leakage of confidential information started appearing. When confronted, one public paper reporter confided that the information was being supplied to them by the Central Bank. These reports were aimed at causing panic withdrawals and hence exposing banks to depositor flight.
Statutory Reserves
In March 2004, at the point of significant vulnerability, Royal Bank received a letter from RBZ cancelling the exemption from statutory reserve requirements. Statutory reserves are funds, (making up a certain percentage of their total deposits), banks are required to deposit with the Central Bank, at no interest.
When Royal Bank began operations, Mzwimbi applied to the Central Bank - then under Dr Tsumba, for foreign currency to pay for supplies, software and technology infrastructure. No foreign currency could be availed but instead Royal Bank was exempted from paying statutory reserves for one year, thus releasing funds which Royal could use to acquire foreign currency and purchase the needed resources. This was a normal procedure and practice of the Central Bank, which had been made available to other banking institutions as well. This would also enhance the bank's liquidity position.
Even investors are sometimes offered tax exemptions to encourage and promote investments in any industry. This exemption was delayed due to bungling in the Banking Supervision and Surveillance Department of the RBZ and was thus only implemented a year later, consequently it would run from May 2003 until May 2004. The premature cancellation of this exemption caught Royal Bank by surprise as its cash flow projections had been based on these commencing in May 2004.
When the RBZ insisted, Royal Bank calculated the statutory reserves and noted that, due to a decline in its deposits, it was not eligible for the payment of statutory reserves at that time. When the bank submitted its returns with zero statutory reserves, the Central Bank claimed that the bank was now due for the whole statutory reserve since inception. In effect this was not being treated as a statutory reserve exemption but more as a penalty for evading statutory reserves. Royal Bank appealed. There were conflicting opinions between the Bank Supervision and Capital Markets divisions on the issue as Bank Supervision conceded to the validity of Royal's position. However Capital Markets insisted that it had instructions from the top to recall the full amount of $23 billion. This was forced onto Royal Bank and transferred without consent to the Troubled Banks Fund at exorbitant rates of 450% p. a.
FML Saga
When FML was demutualising, the executives were concerned about the possibility of being swallowed by its huge strategic partner, Trust Holdings. FML approached Royal Bank and other banks to act as buffers. The agreement was that FML would fund the deal by placing funds with Royal Bank so that Royal would not fund it from its balance sheet.
Consequently FML would leave the deposits with Royal Bank for the tenor of the loan. The deal was consummated through Regal Asset Managers and was to mature in December 2004, at which time it was anticipated that the share price of First Mutual would have blossomed, allowing Royal Bank to harvest its investment and exit profitably. The deal resulted in Regal Asset Managers owning 57 million FML shares. Royal Bank gave FML some securities in the form of treasury bills as collateral for the deposit.
The Reserve Bank and the curator wrote off this investment because at that time FML was suspended at the ZSE. However the fact that it was suspended did not invalidate its value. Recent events have shown that this investment has generated huge capital value for Regal Asset Managers as the ZSE rebounded. Yet the curator valued this investment negatively. Around March 2004 there had been a contagion effect at FML due to the challenges at Trust Bank. This resulted in the forced departure of the FML CEO and chairman. FML was suspended from the local bourse as investigations into the financing structure of Capital Alliance's acquisition were carried out. Because of the pressure brought to bear on FML, it wanted to withdraw the deposits held by Royal Bank, contrary to the agreement. FML could not locate and return the treasury bills that had been provided as collateral by Royal. Royal Bank suspected that these had been placed with ENG, another asset management company which collapsed in December 2003. A public row broke out. Royal Bank executives sought counsel from Renaissance Merchant Bank, which had brokered the deal, and the Chairman of the ZSE, who both agreed with Royal that the deal was legitimate and FML had to honour the agreement. At this stage FML sought court intervention in an attempt to force Royal Bank into liquidation. Even the curator contested the FML position resulting in his taking it for arbitration. Royal's position remained that if FML fails to return the securities then it will not get the funds.
Royal bank directors claimed political interference on the issue. The Royal Bank executives believe that the governor, against his better judgment, decided to act against Royal Bank under the pretext of the political pressure. In retrospect, the political support for cracking the whip at Royal gave credence to the rumour that the governor had an underlying agenda in taking Royal and merging it into ZABG because of its strong branch network.
Royal Bank had been warned by friendly RBZ insiders that if it ever accessed the Troubled Bank Fund it would be in trouble, so it sought to avoid this at all costs.
However on 4th August 2004, Royal was served with papers that effectively placed it under the curator. Interestingly, the curator's contract was signed two days earlier. Until this time no depositor had ever failed to withdraw his deposits from Royal Bank.
The lack of credibility of the Reserve Bank in handling this case is exposed when one considers that some banks were given more than eight months to stabilise under curators, e.g. Intermarket and CFX Banks, and were able to recover. But Royal and Trust Bank were under the curator for less than two months before being amalgamated. The press raised concerns about the curators assuming the role of undertaker rather than nurse, and hence burying these banks.This seemed to confirm the possibility of a hidden agenda on the part of the Central Bank.
Victor Chando
Chando was an excellent financial engineer who set up Victory Financial Services after a stint with MBCA. He had been the brains behind the setting up of the predecessor of Century Discount House which he later sold to Century Holdings. Royal Bank initially had an interest in discount houses and so at inception had included Victor as a significant shareholder. He later acquired Barnfords Securities which Royal intended to bring in-house.
Victory Financial Services was involved in foreign currency dealings, using offshore companies that bought free funds from Zimbabweans abroad and purchased raw materials for Zimbabwean corporations. One such deal with National Foods went sour and the MD reported it to the Central Bank. On investigations the deal was found to be clean but the RBZ went ahead to publish that he was involved in illegal foreign currency transactions and linked this to Royal Bank. However this was a transaction done by a shareholder as an account holder, in which the bank had no interest. What confused matters, was that Victory Financial Services was housed in the same building as Royal Bank.
After failing to nail Chando to any criminal charges, the Central Bank issued an order for Royal Bank to force him out as a shareholder and board member. It is ridiculous that the Central Bank would vet who is a shareholder or not in banks - particularly when the people had no criminal records.
Negotiations with OPEC were underway for it to take over Chando's shareholding. The Reserve Bank was aware of these developments. OPEC would then help in the recapitalisation as well as open up lines of credit for the bank.
The Arrest
In September 2004 the executive directors of Royal Bank, Mzwimbi and Durajadi, were arrested on five allegations of fraudulently prejudicing the bank. One of the charges was that they fraudulently used depositors' funds to recapitalise the bank.
Three of the charges after police investigations were dropped, as they were not true. The two remaining charges were:
a) a conflict of interest on loans that were made available to the directors. The RBZ alleges that they did not disclose their interests when companies controlled by them accessed loans at concessionary rates from the bank. However the enterprising bankers dispute these charges, as they claim the Board minutes prove that this interest was disclosed. Even the annual financial statements of the bank acknowledge that they accessed loans as part of their employment contract with the bank.
b) money was owed to Finsreal Asset Management. However Mzwimbi argues that Finsreal actually owes them money and not the other way round. Royal Bank shareholders needed to inject money for recapitalisation of the bank and were requested to deposit their funds with Finsreal Asset Management. Since some had not paid their portion of the recapitalisation by the due date, Royal Financial Holdings, which had an account with Finsreal, paid the money on behalf of the shareholders - who were then indebted to Royal Financial Holdings. Somehow the RBZ confused this transaction as the bank's funds and therefore accused the
shareholders of using depositors' funds to recapitalise.
By retrospectively analysing the court case wherein the Royal Bank executive directors are accused of defrauding the bank it appears that the RBZ created a falsehood in order to frustrate the bankers. The curator who initially refused to take a stand before the RBZ appointed Independent Appeal, has in court clearly testified that no monies were stolen from the bank by the directors and that the curator did not (contrary to RBZ assertions) recommend charges against the bankers. In January 2007 the former executive directors of Royal Bank were acquitted by the High Court on the remaining criminal charges after the prosecution failed to present a convincing argument.
Royal Bank assets were sold by the curator to ZABG barely two months after being placed under the curator, without any audited financial statements. The speed at which an agreement of sale was reached is astonishing. The owners of Royal Bank went to court and, after a protracted legal struggle, the court ruled that the assets were sold illegally and hence the sale was "illegal and of no force or effect and therefore null and void". The court then directed that the owners should appeal to the Central Bank for a determination of the actions of the curators. The Central Bank begrudgingly set up an "independent panel" to adjudicate the case. Strangely ZABG continued to trade on the illegal assets.
The panel advised that the appeal by Royal bank be rejected as it would be difficult to disentangle it from ZABG. They also cited the fact that ZABG had some contractual obligations with third parties who may not want to do business with Royal bank. This strange ruling fails to explain why these considerations were not made when the amalgamation was done. The ruling also redefined the agreements between the curator of Royal bank and ZABG as not being an "agreement of sale" even though the parties which entered into the agreement clearly intended it to be viewed as such. This was a way of circumventing the Supreme Court ruling that the agreement of sale was null and void.
But the panel did not explain how this disposal of the assets should be considered if it was not a sale.
Consequently the major shareholders of Royal appealed to the Minister of Finance who upheld the RBZ decision. Mzwimbi and his colleagues have therefore appealed to the courts. In the meanwhile there was a failed attempt to sell the disputed assets by ZABG despite the outstanding legal challenge. Just ice delayed is justice denied.
Mzwimbi and his team have been denied access to all bank records and yet are expected to defend themselves. As he characteristically puts it, "We are going into this fight blind folded and our hands bound, while fighting someone who has armour and a sword."
Around 2002-3 there were press reports indicating that the ruling party/state wanted to have a stake in the profitable banking sector. A minister of government at the time of the arrest confirmed this to Mzwimbi and his team. Another bank, NMB, had allegedly been assaulted and the major shareholders were told to dispose of their shareholdings to certain politically connected persons. They refused and had to leave the country after some trumped up charges were preferred against them. Unfortunately, the governor faced resistance and the politicians distanced themselves. One indigenous banker reported how he was summoned to the Central Bank governor's office and informed that he should leave the country, as his bank would be closed. This banker credits Royal Bank's resistance to being manipulated as the reason why his own bank survived. The bank was placed under curatorship on 4th August 2004. Mzwimbi had secured potential investors for the recapitalisation of the bank just before the deadline of 30th September 2004. Three days before that deadline, Mzwimbi met the curator and explained in detail the position for the recapitalisation exercise. Investors who had shown interest and were in advanced negotiations were OPEC, Fidelity Insurance and some South African investors. He further asked the curator to request the Central Bank for an extension of about a week. The very next day he was arrested on the pretext that he was about to leave the country. Mzwimbi and his team believe that his arrest at that critical stage was meant to intimidate the would-be investors and result in the failure to recapitalise. This lends credence to the view that the decision to acquire the bank and amalgamate it in ZABG had already been made. The recapitalisation would have scuppered these plans. Notably, other banks were given an extension to regularise their recapitalisation plans.
Shakeman Mugari reported that the central bank has in principle agreed to enter into a scheme of arrangement with Royal, Trust and Barbican banks which could see the final resolution of this issue. He argues that the central bank disregarded the value of securities that the banks had pledged to the central bank for the loans. If these are factored in, then the bank shareholders have some significant value within ZABG. If this scheme had been consummated it would have protected RBZ officials from being sued in their personal capacity for the loss of value to shareholders. From the article it appears like a memorandum of agreement had been signed to effect a reduction of Allied Financial Services' share in ZABG while the former banks' shareholders will take up their share in proportion to the value of their assets. This seems to indicate that the central bank has noted a weakness in its arguments.
If this proves true Royal Bank could regain a fairly big stake of ZABG due to its assets which included the real estate and its paper assets which had been undervalued.
The legal hassles show that entrepreneurs in volatile environments face unnecessary political and legal challenges. The rule of law in these countries is sometimes nonexistent. The legislative and political environments, instead of supporting investors, pose serious challenges to entrepreneurs. Entrepreneurs in these environments have to assess the associated risk in setting up their enterprises. However a new breed of entrepreneurs who do not fear the vicissitudes of political interference is making a difference. Entrepreneurs recognise that the environment is a constraint but can be manipulated until worthwhile opportunities are exploited for commercial value. These entrepreneurs choose not to be victims of the environment.
Assault on Entrepreneurs' Character
The information asymmetry whereby the Central Bank played its case in the public press while the accused bankers had no right of response created a false impression, in the minds of the populace, of entrepreneurs being greedy and unscrupulous.
The Central Bank accused Jeff Mzwimbi and Durajadi Simba of siphoning funds from the bank. An example appeared in a press article in which it was alleged that the sale of Barclays Bank branches to Royal Bank was annulled and the refunded funds were remitted to Mzwimbi and Durajadi at Finsreal Asset Managers and not Royal Bank's account. This was a clear case of deliberate misinformation as the Central Bank was aware of the truth. Royal Bank had included the purchase of the Bulawayo Barclays Bank branch building which Barclays Bank would lease a portion of from Royal Bank. When Royal Bank fell short at the Interbank Clearing House, it renegotiated with Barclays. This was after Royal was threatened that if it did not clear this amount it would be placed into the Troubled Bank Fund - which carried severe penalties.
The result was that Barclays refunded the amount paying it directly to Royal's Central Bank account. The RBZ acknowledged receiving these funds. How can they now accuse the founding shareholders of siphoning the same funds which went directly to the RBZ account? Mzwimbi insists that Barclays can easily testify to this.
The RBZ also alleged that Mzwimbi and Durajadi withheld information from their CVs on application for the bank licence and hence questioned their integrity. They claimed that Mzwimbi withheld information on his involvement with a failed bank, UMB. But the business plan for Royal Bank which was filed with RBZ clearly states this involvement. The Central Bank would have these records anyway. They also queried Durajadi's source of funds and cast aspersions on the net worth statement. Yet Durajadi had been involved in Zimbabwe Trust and a transport business with his brother, which gave him sufficient net worth value.
The RBZ contends that the Board of Royal Bank failed to comply with a directive to recapitalise by 29th July 2004. Royal Bank executives and Board state categorically that they never received this directive. Mzwimbi and his team argue that this is misinformation, as all banks were required to have recapitalised by 30th September 2004.
The regulators also allege that the balance sheet of Royal Bank had a deficit of $140 billion, which the bankers dispute. If one were to consider the disputed $23 billion for statutory reserves and the $20 billion as accommodation from the clearing house, this would amount to $77 billion with interests. However with the undervaluing of the assets and the $160 billion which was written off as uncollectible, there would be no negative balance sheet. The contention of the Royal Executives is that the curator, at the behest of the Reserve Bank, deliberately tampered with the accounts to provide a reason for the take-over. This may be validated by the fact that the curator's balance sheet kept changing whenever he was challenged and he increased the write-offs, even of funds that had since been collected. Since Royal and Trust Banks were amalgamated into ZABG, the bank is still profitable, without any recapitalisation having been carried out. The very fact that this new amalgamated bank can operate for this long from insolvent banks' capital without recapitalising lends credence to the argument of the Royal Bank's owners.
The entrepreneurs contend that they were dealing with a Central Bank which was determined to see them sink and not to protect the integrity of the banking system. This environment was not conducive to survival and it amplified normal weaknesses which could have been resolved in the course of normal business.
Entrepreneurial Determination
Mzwimbi and his colleagues refused to give up under challenging situations. Despite intimidation they took the Central Bank to court and refused to budge until justice was done. They were presented with numerous opportunities to quit the country but would not.
It is reported that they have not given up on their dream. They have set up Royal Financial Services in Kenya, despite the challenges in Zimbabwe. Indeed a sign of perseverance. Press reports indicated that they are in negotiations with Trust Bank so that once they win their case they can merge and continue their operations in Zimbabwe. Trust did not confirm or deny this. The more likely scenario however is that both Trust and Royal could reach a compromise with the central bank resulting in them taking up equity in ZABG subject to an independent revaluation exercise of the assets which were taken over.
Entrepreneurial Principles
The entrepreneurial journey is fraught with risk but can be very rewarding. Some lessons that can be learned from the case study are as follows:
* Entrepreneurs take calculated risk. Mzwimbi did not use all his resources in the bank but left his shareholding in Econet intact. He also sought to diversify his wealth by keeping some investments with FML and Screen Litho. This has been the mainstay of his wealth creation strategy. The disaster that befell the bank did not completely wipe him out because of this prudent investment strategy.
* Entrepreneurs learn from their experiences. Mzwimbi's vast experiences taught him critical lessons. His international banking experience enabled him to see the emerging trends as Barclays and Standard Chartered withdrew from country towns, creating a route for his entry strategy. His work with Econet taught him perseverance as he and his colleagues fought legal battles with government for the award of the licence. Little did he know that this was just training ground for the battle of his life - the battle for Royal Bank.
* Entrepreneurs need to continuously scan the environment for threats and opportunities. Whereas Mzwimbi and his team were good at noticing the emerging positive trends in the environment at inception, they failed to pick the changes in the regulatory environment when the new governor came on board.
* Entrepreneurial strategy emerges and therefore entrepreneurs should be flexible. Although Royal Bank had a plan to grow at a steady pace, when the opportunity arose to acquire other branches cheaply the entrepreneurs seized the opportunity.
* Entrepreneurs are faced with credibility challenges as customers, regulators and suppliers test the credibility of newcomers. Royal Bank minimised this by recruiting experienced and well known personnel in the market. However the lack of institutional shareholders led to credibility gaps with some corporate clients.
* Entrepreneurs need to craft into their organisations both managerial and leadership competences to ensure both the ability to exploit opportunities (entrepreneurial activity) and sustainable company performance (strategic management). The more contemporary view of entrepreneurship transcends just the venture creation and now encompasses strategic growth. Although Mzwimbi was an excellent leader he needed a strong and powerful manager to consolidate the gains and create solid systems to sustain the rapid growth. Leaders thrive on change while managers thrive on handling complexity and creating order.
* Business is built on relationships as these help in the scanning of the operating environment e.g. critical information about opportunities and threats was obtained from close relationships
Lets close this article with a few questions that an entrepreneur should consider. For instance, if Mzwimbi had expanded less aggressively, would Royal Bank have been safer from the regulators? How could Mzwimbi have protected Royal Bank from political and regulatory interference if he anticipated those risks? If Mzwimbi had selected to pursue his enterprise ideas in a country with a more dependable political and regulatory environment, how would he have performed? Would it have been wiser to keep the equipment, real estate and other assets in Royal Financial Holdings or other corporate entity and only lease them to the bank? In that scenario would the predators have been able to pounce on the bank?
Sources: I Dr Tawafadza A. Makoni confirm being the author of this work. The material for this case study was drawn from my interviews with Mr J Mzwimbi CEO of Royal Bank in February 2006 and two Royal Bank Board Members. Some material was drawn from an unpublished Royal Bank Strategic Business Plan, (2000)
Article Source: http://EzineArticles.com/?expert=Dr_Tawafadza_A._Makoni
Makamba said to seek asylum in Britain - http://www.newzimbabwe.com/pages/makamba17.13160.html
* Makamba skips country for SA
* Makamba locked up once more on fresh graft charges
* Makamba evicted from Mazowe
* Makamba fined for breaching forex laws
* Judge throws out case against Makamba
* Makamba prosecutors ambushed with new evidence
* Makamba granted bail but remains in jail
* Makamba repatriates externalised forex
* High Court thwarts Makamba's freedom bid
* Makamba released, rearrested
* Makamba faces 22 forex offences
* Makamba arrested
By Staff Reporter
Last updated: Thu, 12 Nov 2009 14:59:23 GMT
MEGA RICH Zimbabwean business mogul James Makamba is seeking asylum in Britain, barely three weeks after a Zimbabwean magistrate issued a warrant for his arrest, it was claimed Thursday.
The Telecel boss owns a multi-million pound-property in the lush Knightsbridge area of London and would be settling there, sources said last night.
Makamba -- rumoured to have bedded President Robert Mugabe's wife, Grace -- was due before a Harare magistrate at the end of August but gave the hearing a miss after staying put in South Africa where he had gone on a business trip.
He was later spotted by reporters in the upmarket Sandton surburb of Johannesburg in the company of another wanted fugitive businessman, Mutumwa Mawere.
A bid to extradite Mawere failed as he is now a South African citizen.
The weekly Financial Gazette newspaper, quoting sources, said Makamba -- a former MP and Zanu PF central committee member -- had engaged London-based immigration law firm Chipatiso and Company Solicitors, to pursue his asylum claim.
The paper said political activist and lawyer, Yvonne Mahlunge, who is at Chipatiso and Company held meetings with Makamba this week. However, Mahlunge flatly denied meeting Makamba and declined further comment to the Financial Gazette.
Mahlunge had not responded to an interview request by New Zimbabwe.com last night.
Makamba joins a host of rich fugitives, mainly bankers, who have skipped the country to escape graft charges. These include former NMBZ executives, Julius Makoni, James Mushore, Otto Chekeche and Francis Zimuto. Intermarket group founder Nicholas Vingirai, Mthuli Ncube of Barbican Bank, Gilbert Muponda of ENG Capital, Dipak Pandya, Jayant Josh and his brother Manharlal.
In a recent interview, Makamba told a journalist: "Why do they continue to pursue me? There are more serious issues to deal with, the economic crisis. It warrants more attention. Why are they interested in Makamba? The intention must be evil!"
Makamba already faces a battle to retain his shareholding at the cellular telephony company, Telecel Zimbabwe, where government big wigs have stepped up efforts to oust him.
Sources say there is an escalating campaign to seize Makamba's properties, with his major shareholding in Telecel the first target. He has already shut his supermarket in Mazowe, claiming Central Intelligence Organisation officials were trying to muscle him out of business.
Open letter to President Mugabe
His Excellency President Robert Gabriel Mugabe
President of the
Republic of Zimbabwe
Munhumutapa Building
Samora Machel Avenue
HARARE
ZIMBABWE
Your Excellency President R. G Mugabe
RE ; GOVERNOR GIDEON GONO , ENG CAPITAL AND RESERVE BANK OF ZIMBABWE REFORM
Firstly Your Excellency I would like to congratulate and thank you for agreeing to and implementing the Inclusive Government (I.G) . You have shown encouraging leadership by demonstrating that you can indeed work with members of the opposition even though challenges remain. The I.G offers our nation hope for revival and future prosperity if it can be fully implemented .
The purpose of my letter is to clarify a few issues which you may not have been accurately briefed on .
My name is Gilbert Muponda. I hope you remember me, since in several public statements you were quoted to have mentioned both my Company ENG CAPITAL and my name. As you may recall during the Financial crisis of 2003- 2004 I was made the poster boy for all things that had gone wrong with Zimbabwe's Economy.
At one funeral you even mentioned me by name and you said " hameno kuti vabereki vaMuponda vanoti kudii mwana wavo zva auraya nyika kudai". The then crusade was that once Zimbabwe closed firms and businesses such as ENG CAPITAL the economy would recover and people would have a better standard of living .
The exchange rate between the Zimbabwe dollar and the US$ then was 1500 is to 1. The rate of inflation was 450% . But by early this year 5 years after the closure of ENG inflation had risen to around 500 million percent .One US$ was trading for several trillion Zimbabwe dollars. The situation worsened until the Zimbabwe dollar was suspended and replaced by foreign currency to a point that Zimbabwe has lost monetary policy sovereignty .
Zimbabwe's monetary Policy is now being determined from South Africa ,Washington and other Western Capitals because Dr Gono was reckless in managing the country's economy as he indulged himself in excessive money printing without devising other strategies such as those employed by Ian Smith's regime which allowed the Rhodesia Front to carry on for 15 years despite sanctions .
Your Excellency when the Defense Forces Chiefs are forced to make various announcements and statements to insist that Governor Gono will remain it undermines Your Office, the Defense forces and the credibility of the Reserve Bank . The hiring and firing of the Reserve Bank Governor is not a matter for the Army to publicly stand behind a certain individual. This scares investors and other international partners.
Dr Gono has done his level best and as such he should now be allowed to rest and be gracefully retired to make way for another Governor to guide the Economy forward .An inaccurate impression is being created that there are malicious people who are trying to have Dr Gono dismissed for personal or vindictive reasons .
The correct position is that Dr Gono is being asked to gracefully retire for several clear reasons related to how he has mismanaged the country's monetary policy, its currency and the economy in general . The reasons are not personal but National in terms of importance as his departure will unlock resources that remain elusive due to the way the Governor Has conducted himself over the last 5 years .
This is not about MDC against ZANU-PF .I am sure MDC could agree with ZANU PF providing an acceptable replacement for Governor Gono. The problem is Governor Gono is seriously compromised and his stay at the Central Bank is endangering the chances of Economic recovery .
According to a report carried by the respectable AFP news agency of 25 May 2009 Cde President it appeared you were responding to my letter to the Prime Minister and were quoted as having said the following about Governor Gono ;
"He is not a thief, he has done no wrong. Prove the wrong he has done, That's the crime he is alleged to have committed -- that he stood by this man Robert Mugabe, who must collapse so that there is regime change."
Governor Gono's alleged crime is not that he supported or stood by you. His real crime is economic sabotage , this is why he has been referred to as an Economic terrorist . He is ruining the country's economy through various ill-thought out policies and devising unjust self enrichment schemes which drained investor confidence whilst milking national coffers at the same time .
The major problem with his unjust self enrichment schemes is that he has been randomly mentioning that he does this with the approval of his "Principal". This Your Excellence is undesirable for a man of your stature and standing to let your name and reputation be tainted as the one who is facilitating and allowing such unjust self enrichment and self aggrandizement schemes.
I will briefly describe for you one specific example about what I mean by unjust self enrichment schemes .I am sure you were told that ENG CAPITAL had many cars, and these cars were the only assets that ENG had.
The correct and accurate facts are that ENG was a Group of Companies which Companies had Directors, Managers and employees and the cars were for the use of these members of staff who ran the various companies which made up ENG CAPITAL.
ENG Capital group had a market value of US$ 175 million, just before the RBZ descended on the Institution.
Below is a brief ENG Group Structure ;
ENG HOLDINGS GROUP STRUCTURE
- SUBSIDIARIES
- ENG CAPITAL INVESTMENTS PVT LTD
- ENG ASSET MANAGEMENT PVT LTD
- ENG REAL ESTATE
- ENG NOMINEES PVT LTD
- ENG PRIVATE EQUITY (PVT) LTD
- ENG CAPITAL ADVISORY SERVICES
- ENG STRUCTURED FINANCE
ADDITIONAL MAJOR ASSETS OWNED
- Century Bank Holdings (now CFX bank)
- Leasing Company of Zimbabwe, Century Asset Managers)
- Century Discount House
- Hybri Micro-Finance Institution
- Care Insurance PVT LTD
- RestCel Insurance PVT LTD
- Amalgamated Health Services ? (Harare West Hospital )
- 15% of OK Zimbabwe Limited
- 15% of Zimplow Holdings Limited
- 20% Medtech Holdings Limited
- Hornet Re-Insurance PVT LTD
- Pearl Pension Fund Management
- 25 % Clan Holdings Limited
- 25 % Zimbabwe News Papers Group - Zimpapers Limited
- Allied Conveyor Belts PVT LTD
- River Drilling PVT LTD
- Real Estate including (Anastasia Court, Belgravia House, Thaine Building)
- Various Listed ZSE Listed shares
- Treasury Bills
- GMB Bills
- Cargill Commercial Paper
- $ 4 billion - Alliance Capital Debenture (representing 123 million First Mutual Life shares)
- 23 Million First Mutual Life shares
ENG Group was liquidated and managed to repay its creditors.
Using the Anti-Graft mantra Governor Gono devised an unjust self enrichment scheme targeting business leaders arresting,harassing,intimidating,exiling and black mailing entrepreneurs .
ENG assets above included a parcel of more than 600 million Century Financial Holdings ( Now CFX BANK) of these 600 million we were able to track 309 Million Shares sold to Network Investments and Kwangwari Enterprises which are investment vehicles in which Gono reportedly has interests.
The 309 Century Financial Holdings Limited Million shares in question were sold through Fidelity Stock brokers on or around May 13, 2004. Within the same week an announcement was then made that CFX Bank was taking over Century Holdings.
The shares were sold to Gono's reported consortium for Z$2,9 billion when ENG had spent $35 billion to accumulate the shares, thereby prejudicing ENG, Creditors, Investors and contributories of at least Z$32,1 billion.
As ENG contributory and shareholder, I wrote to the Zimbabwe Stock Exchange Chief Executive Mr Emmanuel Munyukwi asking for an investigation because we had agreed with the majority of creditors that the shares should not be sold but rather swapped with creditors and investors instead of selling them at an unreasonable price.
But the 309 Century /CFX Financial Holdings million shares were somehow clandestinely sold and that transaction enabled CFX Bank to take over Century Holdings Limited.
This allowed the reverse listing of CFX Bank on to the Zimbabwe Stock Exchange. Without those 309 Century Holdings Limited million shares owned by ENG the CFX/Century merger would have never happened. Gono and his proxies became the new controlling shareholder of the new merged bank.
Is this by design or accident?Gono then forced out the Mr Sean Maloney who had helped to put together the transaction. Mr Sean Maloney had to leave the country under unclear circumstances . Part of the same shares snatched From ENG were later transferred to Premier Bank Financial Holdings which is reportedly owned by Governor Gono .
ENG directors and contributories asked the high court to set aside the sale of the shares and the matter action is still before the courts in Harare. We asked Zimbabwe Stock Exchange Committee to investigate. They refused. We asked the brokers for the identity of the buyer of our shares. They refused. The brokers indicated they were under serious pressure from individuals they couldn't identify to maintain total secrecy on the identity of the buyer.
Within a few days of raising the challenge of the CFX/Century shares Justice Minister Patrick Chinamasa specified me without affording me a hearing or an enquiry as required by the Constitution of Zimbabwe . The was specification at the instigation of Governor Gono .The specification was meant to harass, cow, intimidate and silence me from raising further complaint and challenges regarding ENG assets specifically these 309 million shares in CFX Financial Holdings.
Since the ENG shares in Century /CFX Bank Financial Holdings were irregularly transferred the Bank ownership remains in dispute. The ENG shareholders and contributories filed and sought a high court order to stop the transfer of the shares until the dispute had been resolved .
The shares were still clandestinely transferred despite the pending high court application to resolve the dispute . After filing for this order My Lawyer the late Oscar Ziweni was also specified by the Minister of Justice and threatened ,harassed and intimidated until he went into hiding.
However the point remains ENG shareholders and contributories still lay claim to these shares and stake in Century/ CFX BANK which were looted by Governor Gono .
A few individuals directly involved in the illegal sale of the ENG shares in Century later confessed that the beneficiary of the transaction was Governor Gono.
Cde President the description of the actions above constitutes unacceptable behavior by the Governor of the Reserve Bank . The transactions clearly show corrupt behavior which when repeated at a massive scale as done by Governor Gono can bring down a country's Economy. This is a significant part of what killed Zimbabwe's Economy. I am sure other business people will have their stories to tell and many will have common features with what I have described above .
This will be difficult to prove without a forensic audit of Independent Commission of Enquiry .And this will only be possible if Governor Gono is gracefully asked to recuse himself or go on paid leave whilst this is done. As a scholar of modern corporate Governance practices I believe the Governor will find this acceptable.
As you may probably recall Barbican Bank, Trust Bank and Royal Bank experienced a liquidity crisis similar to what Century /CFX Bank experienced during the same period .
Barbican Bank, Trust Bank and Royal bank were then taken over and amalgamated to form Zimbabwe Amalgamated Bank ( ZABG) . Even though Century /CFX Bank faced the same situation it was not merged into ZABG.
The reason was that Governor Gono was now the new controlling Shareholder and he was protecting his self interests. Century /CFX Bank was placed into temporary curatorship only to reopen a few months with RBZ pumping huge amounts of money to protect Governor Gono's " new investment". Your Excellency this is corruption. This is how the country goes down the drain.
ENG case was not in isolation . Many people lost jobs, businesses and careers whilst Governor Gono was hiding behind anti-graft campaign just like today he is hiding behind the sanctions busting myth as if he is the one who invented sanction busting techniques. Businesses destroyed or taken over Royal Bank, Intermarket, Barbican, Intermarket, Rapid, Sagit, Africa Resources, Century Bank, Trust Bank,Time Bank.
And this all happened within a space of less than 6 months. Jobs were lost. Business people were intimidated, scandalized, arrested or haunted out of the country. This Your Excellency is what ruined the Economy. Even a strong Economy can not with stand such massive brain drain where highly experienced and skilled business people and bankers are dismissed, exiled or jailed all at the same time.
The Economy and investor confidence suffers. Capital Flight will result and factories and businesses will relocate into neighboring countries whilst foreign investors avoid the country after witnessing how local investors and entrepreneurs have been treated. This is what ruins the country's economy .
Your Excellency as you may be aware CUBA and North Korea have been under sanctions for longer periods than Zimbabwe. Cuba has been under a serious sanctions for more than 50 years , yet inflation in CUBA has never reached 1000% .
The Cuban currency has never been to levels witnessed by Zimbabwe dollar. It is therefore clear that Zimbabwe's Economic decline has more to do with ruinous policies as devised and implemented primarily by Governor Gono .
The list of victimized businesspeople is rather long but it includes such luminaries as Dr Makoni, Mutumwa Mawere, James Mushore, Emmanuel Fundira, Otto Chekeche, Godfrey Jowa, Norman Sachikonye, Victor Chando, Durajadi Simba, Jeffrey Muzwimbi, William Nyemba, Nicholas Vingirai, Mthuli Ncube , Francis Zimuto , James Makamba, David Butau, Minister Chris Kuruneri, Nyevero Hlupo, Chris Goromonzi,John Moxon and many more. Mr President all these men above are true patriots who chose to set up businesses in their own country instead of neighboring countries where they had similar opportunities and incentives.
Is this normal to see a whole generation of entrepreneurs scandalized and lose all credibility and all at the same time all based on accusations raised and directed by one man?
A lot of these individuals have been forced to settle in other countries where they are working, creating jobs and help build neighboring economies whilst Zimbabwe is in desperate need for such skills and services .
This list includes some of the most gifted Bankers and Business people of our lifetime. It includes The Founders of the first Indigenous Merchant Bank, It Includes the founders of the first Discount House, It includes the first Black Entrepreneurs to form and list their own Financial Institution in Zimbabwe .
All these men Your Excellency have been haunted out of the country , embarrassed and disgraced due to the vindictiveness of Governor Gono as he pursued long discredited economic policies. When such experienced and skilled business people are haunted out of their businesses and out of the country the impact is long term . Factories close, production is reduced ,shortages become widespread and prices keep rising till hyper inflation becomes order of the day .
During the 1980s and 1990s the Government ran the much vaunted Education for All campaign. That campaign produced millions of graduates .Including me.
It is sad today that a majority of those products are today working and serving other nations whilst Zimbabwe is in desperate need of their skills and services. More than 80% of my former classmates at National University of Science and Technology are now based outside Zimbabwe.
Cde President other countries protect and support their business people and entrepreneurs. They give them incentives to remain ,stay and be based in their country of birth. In the USA there are individuals like Warren Buffet, Steve Jobs, Bill Gates and many others. They live in America and if they were to re-locate else where I am certain the American Government will do everything it can to re-attract them .
They do this because they know Entrepreneurs create jobs ,provide services and make the economy prosper . In 2006 The richest Chinese man was the then 37 year old Wong Kwong Yu of Gome Appliances. Wong Kwong Yu has an estimated $2.3 billion US dollars in assets according to the Forbes business magazine.
China has 108 other billionaires. And they all live in and operate from China. These are some of the people who have helped China become such an Economic powerhouse . The world over its rare for any country to be developed by foreigners in the absence of a vibrant local entrepreneurial community .Whilst Zimbabwe may look east its also important that it looks inside for its own business people and entrepreneurs .
Under the direction of Governor Gono Zimbabwe lost too many talented individuals who are needed to revive the Economy . It is therefore imperative that the RBZ be reformed and Governor Gono be re-deployed away from the Central Bank which must play .
The Media and those close to you tried to create impressions that ENG was brief case company premised on Financial Engineering and Financial gymnastics and creating money from thin air without real economic activity. This is false . I will clarify this by bringing to your attention 2 companies which were part of the ENG Capital Group. ENG included River Drilling PVT LTD specialized in locating under ground rivers and water bodies.
Its main activity was to locate such water bodies and bore hole drilling through out the country .This included drilling boreholes for schools and rural district councils. Allied Conveyor Belts was involved in manufacturing ,servicing and installation of conveyor belts and elevators .
At the time of ENG 's closure the Company was in the process of negotiating the refurbishment of all the Conveyor belts and systems at Hwange Colliery Company Limited . In addition it was finalizing an conveyor belt system export order worth US $ 2.8 million from an Angolan firm .
It is clear a misleading impression was created that ENG specialized in cars or non-economic activities and these businesses I am highlighting were ignored and downplayed to try and create justification for the closure of ENG CAPITAL whilst ENG assets were stripped and looted as earlier described above.
I hope the above will give an indication of why the RBZ must be reformed and during that reform individuals like Governor Gono must gracefully be retired or redeployed .
The above case about the ENG shares in Century / CFX Financial Holdings show how corrupt the Governor is .Your Excellency your reputation and legacy is on the line. Cde President you can not be seen to be defending and protecting a corrupt man like Governor Gono.
I am sure other cases of his corrupt behavior will be brought to your attention since you have asked people to show you the Governor's criminal and corrupt deeds .
Gilbert Muponda is an Entrepreneur based in Canada.
He is Founder of GMRI Capital He can be reached at;
Facebook ;
Email: gilbert@gilbertmuponda.com . Skype ID: gilbert.Muponda
Twitter ; http://twitter.com/gmricapital
Phone: 1-416-841-5542
By Paul Ndlovu
The Gideon Gono and Tendai Biti fight is now on overdrive after
revelations from the Governor that Biti eternalized US$1 million
dollars in 2005.
In a letter written to the Prime Minister Morgan Tsvangirai by Gono
there is a startling revelation that Biti externalized foreign
currency at a time when the country was desperately in need of it at
the height of the black-market and Zanu (Pf) looting (a party that
Gono belongs to as its chief financier).
"Between 2005-06, the RBZ uncovered US$1 million kept in his law
firm's Barclays account held in the Isle of Man in breach of Exchange
Control Regulation," reads part of the 15 pages latter in which Gono
pleads for the Prime Minister's protection.
Gono goes on to claim that the Biti "crime" is in the court even
though no prosecution has been made. Perhaps waiting for the right
time.
"The matter is yet to come to actual trial although it is at the courts."
Gono has been pushed to the limit by the Tendai Biti campaign to get
him out of the reserve bank-the central monetary clearinghouse.
Biti has on a number of times branded Gono the number 1 state enemy
for his quasi-fiscal policies for a lack of a better word Biti has
been referring to Gono as "an economic terrorist."
Sources at the Reserve Bank of Zimbabwe revealed that Gono has been a
shadow of himself ever since the all-inclusive setup choosing to be a
silent Governor. For the first time during his tenure RBZ worker
defied his command and went on strike over unpaid salaries. They are
yet to receive they money backdated to February.
Gono financed the violent Zanu Pf political violence mission before
the June 27 election run off where Mugabe ended up running a one man
race after Zanu Pf scared off the MDC by deploying violent tactics of
the Ku Klux Klan. People were killed on suspicion of being MDC.
Gono's letter to Jomic
15th May 2009
The chairman of Jomic, Prof W Ncube
1st Floor Mukwati Building
4 St/Central Avenue
Harare
RE LETTER OF COMPLAINT TO JOMIC
1. My understanding, as a layman, is that Jomic plays an important oversight role over the Global Political Agreement currently in place today. I also understand that it provides for individuals who believe that in the context of the political processes under way, there are certain Violations, Harassment, False Justifications, victimisation, Malice and Misrepresentations which have been made or are being made by certain key persons and individuals against others and which Violations, Misrepreseantations, Malice, Falsehoods, have been or are being perpetrated to achieve certain pre determined political outcomes that have nothing to do with national interests.
2. A case in point is where I have continued to suffer abuse from one of the GPA negotiators and now Minister of Finance Hon TL Biti who succeeded to hide his true motives and intentios from all our Political Negotiators, the Facilitator as well as our (3) Principals, our Cabinet and its Committees, SADC Heads of State and Government, the International Community, IMF/WB/ADB among others and made Governor Gideon Gono an issue for removal by the Principals.
3. As the attached documentation will show, Hon Biti has sown seeds of hatred, and made me a victim of political malice, apart from endangering my life and that of my family in the process.
4. I believe that he may not have declared to all above parties and stakeholders concerned that he has a personal vendetta against the Governor and the Reserve Bank of Zimbabwe in general over his Legal Firm's alleged Externalisation and Money Laundering Allegations that my team were investigating from 2005 2006, a matter that remains unsettled at the Courts and for which he and his partners at the Law Firm Honey and Blanckenberg may be called upon to testify with embarassing revelations.
5. My team had also earlier this year (23.01.09) received from another Whistle Blower allegations of further financial improprieties involving alleged acquisitions of certain properties in South Africa. See attached.
6. My team have not to date looked into that matter for fear of victimisation, neither have they brought those matters to any other investigating Office in the country, yet. We did not want to be seen as undermining the new spirit of inclusivity and national healing, preferringto let sleeping dogs lie and open a new chapter but this does not seem to be the Minister's spirit.
7. An example of such damaging falsehoods was that the false story from him to Cabinet alleging that Governor borrowed US$1,1bn on behalf of the state without approval from Government yet he had on file, letters of authorisations from his predecessor Ministers of Finance. The move was meant to bring disrepute to the operations of the RBZ and the Governor.
8. I have enclosed copies of our subsequent correspondence with the Hon Minister.
9. I have also enclosed copies of many political fliers being dropped in Bulawayo, Harare and other urban areas demonizing me along the same lines that the Minister is accustomed to doing, though I am not suggesting that he is the one behind the pamphlets because I don't have that evidence.
10. Over the period he has been my minisiter, he has only met with the governor and his team on three, very brief occasions and yet speaks about our operations as if he is actually in the picture, yet he is not.
11. I have raised the harassment issue via Government processes of the office of the Hon Prime Minister and I await his response but that is only to do with governmental processes.
12. From the GPA angle and political processes I believe that it is right and proper that such serious issues be brought before JOMIC and I appeal to you to have the matter put under Agenda for your next meeting or if you deem it necessary that it be elevated to the platform of the three Principals and/or either processes you deem most appropriate.
13. All I want is to work in peace and to be left to do my job as prescribed by law without victimisation or danger of the nature I am experiencing.
Yours Sincerely,
G. GONO
GOVERNOR
My letter to Prime Minister Tsvangirai
The Rt. Hon. Prime Minister of the
Republic of Zimbabwe
Mr. M. R. Tsvangirai
Munhumutapa Building
Samora Machel Avenue
HARARE
ZIMBABWE
Rt. Hon. Prime Minister, Sir,
RE: GOVERNOR GONO, MINISTER BITI and CENTRAL BANK REFORM
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I refer to the above.
My name is Gilbert Muponda, I am a Zimbabwean born Entrepreneur currently living in exile. You may have never heard of me so I will give you some brief back ground.
I was the first person arrested in the 2003-2004 so-called anti graft campaign by Gideon Gono immediately after he took over at the RBZ on allegations of fraud, money laundering and externalization similar charges to what today the Governor is alleging against Honorable Minister Biti.
What followed my arrest was later to become the single most transformation period as the RBZ replaced the ZRP and the RBZ Governor replaced the ZRP Commissioner in directing who should be arrested and which charges must be preferred against those arrested.
This is relevant since the Governor is clearly threatening Minister Biti with arrest, court action at a time the Minister has asked for the RBZ to be reformed.
The struggle between Gono and Minster Biti is not personal as Governor Gono is alleging.
The matter is between Governor Gono against the Zimbabwe Economy.
Under Gono's leadership the RBZ reputation, standards and standing has been ruined.
The local currency was eroded to the point that it had to be replaced by currencies from countries which Governor alleges are hostile to Zimbabwe.
Governor Gono led the closure of Banks, arrest of individuals. As it is the international community is refusing to deal directly with the RBZ for as long as Governor Gono remains there.
It is for these reasons which demand that Governor Gono be encouraged into retirement and gracefully allow a replacement to be named. Again his issue is not about MDC against ZANU its beyond that. Even ZANU people have experienced the vindictiveness and shallowness of his policies as this letter will later show.
As back ground information I describe my former business for you, hopefully this will help you understand how Governor Gono single handedly destroyed the Financial sector leading to reduced Economic activity which in turn fast tracked the economic decline.
ENG Capital group had a market value of US$ 175 million, just before the RBZ descended on the Institution.
Below is a brief ENG Group Structure ;
ENG HOLDINGS GROUP STRUCTURE
- SUBSIDIARIES
- ENG CAPITAL INVESTMENTS PVT LTD
- ENG ASSET MANAGEMENT PVT LTD
- ENG REAL ESTATE
- ENG NOMINEES PVT LTD
- ENG PRIVATE EQUITY (PVT) LTD
- ENG CAPITAL ADVISORY SERVICES
- ENG STRUCTURED FINANCE
ADDITIONAL MAJOR ASSETS OWNED
- Century Bank Holdings (now CFX bank)
- Leasing Company of Zimbabwe, Century Asset Managers)
- Century Discount House
- Hybri Micro-Finance Institution
- Care Insurance PVT LTD
- RestCel Insurance PVT LTD
- Amalgamated Health Services ? (Harare West Hospital )
- 15% of OK Zimbabwe Limited
- 15% of Zimplow Holdings Limited
- 20% Medtech Holdings Limited
- Hornet Re-Insurance PVT LTD
- Pearl Pension Fund Management
- 25 % Clan Holdings Limited
- 25 % Zimbabwe News Papers Group - Zimpapers Limited
- Allied Conveyor Belts PVT LTD
- Real Estate including (Anastasia Court, Belgravia House, Thaine Building)
- Various Listed ZSE Listed shares
- Treasury Bills
- GMB Bills
- Cargill Commercial Paper
- $ 4 billion - Alliance Capital Debenture (representing 123 million First Mutual Life shares)
- 23 Million First Mutual Life shares
ENG Group was liquidated and managed to repay its creditors.
Using the Anti-Graft mantra Governor Gono devised an unjust self enrichment scheme targeting business leaders arresting, harassing, intimidating,exiling and black mailing entrepreneurs . I would like to clarify the point about unjust enrichment using a real life example.
ENG assets included a parcel of 309 million Century Holdings ( Now CFX BANK) Shares sold to Network Investments and Kwangwari Enterprises which are investment vehicles in which Gono reportedly has interests.
The 309 Century Holdings Limited Million shares in question were sold on or around May 13, 2004. Within the same week an announcement was then made that CFX Bank was taking over Century Holdings.
The shares were sold to Gono?s reported consortium for Z$2,9 billion when ENG had spent $35 billion to accumulate the shares, thereby prejudicing ENG, Creditors, Investors and contributories of at least Z$32,1 billion.
As ENG contributory and shareholder, I wrote to the Zimbabwe Stock Exchange asking for an investigation because we had agreed with the majority of creditors that the shares should not be sold but rather swapped with creditors and investors instead of selling them at an unreasonable price. But the 309 million shares were somehow clandestinely sold and that transaction enabled CFX Bank to take over Century Holdings Limited.
This allowed the reverse listing of CFX Bank on to the Zimbabwe Stock Exchange. Without those 309 Century Holdings Limited million shares owned by ENG the CFX/Century merger would have never happened.
Gono and his proxies became the new controlling shareholder of the new merged bank. Is this by design or accident? Gono then forced out the Mr Sean Maloney who had helped to put together the transaction. Part of the same shares snatched From ENG were later transferred to Premier Bank which is reportedly owned by Governor Gono.
ENG directors and contributories asked the high court to set aside the sale of the shares and the matter action is still before the courts in Harare. We asked the ZSE to investigate. They refused. We asked the brokers for the identity of the buyer of our shares.
They refused. The brokers indicated they were under serious pressure from individuals they couldn't identify to maintain total secrecy on the identity of the buyer. A few individuals directly involved in the illegal sale of the ENG shares in Century later confessed that the beneficiary of the transaction was Governor Gono.
This will be difficult to prove without a forensic audit of Independent Commission of Enquiry. And this will only be possible is Governor Gono is gracefully asked to recuse himself or go on paid leave whilst this is done. As a scholar of modern corporate Governance practices I believe the Governor will find this acceptable.
The purpose of my letter is not to seek vengeance or to be vindictive. It is to give you and others other facts which people may now be forgetting since the last 6 years have been very eventful for Zimbabwe.
ENG case was not in isolation. Many people lost jobs, businesses and careers whilst Governor Gono was hiding behind anti-graft campaign. Businesses destroyed or taken over Royal Bank, Intermarket, Barbican, Intermarket, Rapid, Sagit, Africa Resources, Century Bank, Trust Bank. And this all happened within a space of less than 6 months. Jobs were lost. Business people were scandalized, arrested or haunted out of the country.
The list is rather long but it includes such luminaries as Dr Makoni, Mutumwa Mawere, James Mushore, Emmanuel Fundira, Otto Chekeche, Godfrey Jowa, Norman Sachikonye, Victor Chando, Durajadi Simba, Jeffrey Muzwimbi, William Nyemba, Nicholas Vingirai, Francis Zimuto , James Makamba, David Butau, Minister Chris Kuruneri, Nyevero Hlupo, Chris Goromonzi, John Moxon.
Mr Prime Minister all these men above a true patriots who chose to set up businesses in their own country instead of neighboring countries where they had similar opportunities and incentives. Is this normal to see a whole generation of entrepreneurs scandalized and lose all credibility and all at the same time all based on accusations raised and directed by one man?
The names of these individuals have been ruined way beyond what the Governor is suggesting about his name or standing in society.
When will the Governor step up and offer apologies to those he has wrongly accused in the process destroying businesses and jobs. Whilst for the sake of progress we must let by gones be bygones this remains impossible if the Governor seeks to raise false and malicious charges against a Minister who is simply trying to do his job.
A few years ago Governor Gono rushed to President Mugabe to protect him from the then Minister of Finance Herbert Murerwa. As you may recall Minister Murerwa's crime was that he simply suggested that Zimbabwe required more than removing zeros from the Zimbabwe Dollar if the Economy was to recover.
Governor Gono won the power struggle then and Minister Murerwa was sacked. And Governor Gono continued to print money and removing zeroes every six months. The result of such policy is clear for all to see, Zimbabwe does not have a national currency, which is limiting the country?s ability to implement a credible economic recovery plan.
Mr Prime Minister you may recall at the instigation of Governor Gono Barbican Bank, Royal Bank and Trust Bank were expropriated under a cloud of confidence with no compensation paid to its owners.
This may now be in a process of being reversed but the damage to the nation?s reputation and impact on entrepreneurial development is long term.
Zimbabwe needs to send a strong signal to the International community that Property rights will be protected.
A starting point would be to reform the RBZ as a confidence building measure and the retirement of Governor Gono will go a long way in building confidence.
A few weeks ago Governor Gono admitted and confessing to raiding private foreign currency accounts belonging to various individuals and organizations. In particular he admitted to taking without permission US$ 7 million belonging to the Global Aids Fund.
Now when the Governor of such a respectable institution admits to dipping his fingers in the till the International Community will be predictably reluctant to donate, finance or assist such a Central Bank. The way to start rebuilding confidence of such an institution is to retire or re-deploy those responsible for the reputation destruction .
What are the implications on foreign investor sentiment when they see such hostility to local investors? These are respectable and pioneer first generation entrepreneurs who find themselves scandalized and somehow classified criminal even though there is no clear evidence against them.
The reform of RBZ and departure of Governor Gono is not a personal matter but rather national matter that?s long overdue if Zimbabwe's Economic recovery is going to be realized.
Governor Gono used the exact same tactic and its modified versions to justify looting NGO fore accounts, arrest business people and grab companies and assets whilst blaming the business people of corruption and externalization. Externalization is Gono's favorite but exhausted suppression tool which he has used for self enrichment whilst victimizing rivals or those holding independent and divergent views.
Not too long ago Governor Gono accused former Guruve North Member of Parliament had to flee Zimbabwe after Governor Gono had mis-directed the Police to arrest the Honorable Member. Recently Butau was cleared by the courts.
It is important to note Butau's troubles began when he tried to investigate Governor Gono?s conduct of the Quasi Fiscal Activities which had replaced normal parliamentary approved Government spending.
It must be noted that David Butau was facing similar charges to what the Governor now alleges against Minister Biti.
This pattern of behavior is disturbing to say the least. Why is it that when Governor Gono is facing an investigation or probe those trying to carry out the reform, probe immediately become suspects and the Police is invited by Governor Gono?
Is Governor Gono hiding something? If he is not as I suggested earlier he should go on a paid leave whilst the RBZ is probed, investigated or audited.
A different but related point Mr Prime Minister please may you mention the contents of this letter when you meet His Excellence President Mugabe .
It is important that His Excellence be made aware directly of some of these happenings as a lot of the unjust self enrichment schemes are being done in his name. It is therefore imperative that His Excellence be briefed and advised on the risk of trying to protect Governor Gono to hold on to the post of Governor.
Any action to protect Governor Gono at this juncture will only be interpreted to give credibility to the claims that Governor Gonos? unjust self enrichment schemes were designed for the benefit of His Excellence a point which I believe The President may not be aware of.
Mr Prime Minister this matter is not personal nor is it a vendetta against Governor Gono. It is a matter of national survival and revival. Currently Zimbabwe can not even re-introduce the Zimbabwe dollar for the fear that the Governor will again indulge himself and ruin the currency by excessive printing.
The Governor being the Patriot that he claims to be must surely see that its not wise or fair to hold the whole nation to ransom just because he wishes to cling on to the Governors? office.
As a confidence building measure you could even allow your GNU partners in ZANU PF to name an acceptable individual to replace the Governor.
Gilbert Muponda
Cc ; HE President Mugabe
Hon TL Biti
Governor Gono
This an open letter to the Prime Minister of Zimbabwe Morgan Tsvangirai.
Dear Prime Minister,
Firstly, I would like to congratulate you on your highly successful tour during which you met important World Leaders. It was a proud moment for every Zimbabwean to see the Zimbabwean Prime Minister with US President Barrack Obama.
During the trip, it was encouraging that you made an effort to engage Zimbabweans abroad to come back home. You initiated an important conversation which must be continued.
This was important in that the government admits there is a role to be played by Zimbabweans abroad. The minor problem was the timing and packaging of the call for Zimbabweans to return home.
Zimbabweans who left their country did so out of necessity and a lot of their grievances have not yet been addressed. These include, but are not limited to, basic freedoms, media freedom, respect of human and private property rights.
In this letter, I will try to be less formal and will address you by your totem as Honorable Save (Hon Save). I will also address the President as Cde Gushungo.
Since I now understand you regularly meet Cde Gushungo over tea or dinner, I will not be writing a separate letter to him as it's expected you may discuss some of the points I will raise.
It is unfortunate you were not able to finish delivering your speech in London. However, it was also important that Zimbabweans were bold enough to let you know how they felt about your message. Fortunately, there were no shoes thrown at you, a la George Bush in Iraq. Such are things you can expect in a democracy!
Zimbabweans expected you to be on their side in terms of saying Zimbabwe remains unstable and on a challenged path. It requires international assistance, and some of that assistance includes asking the international community to continue accommodating Zimbabweans until the country is stable.
Under the United States' Zimbabwe Democracy and Economic Recovery Act (ZDERA), I am sure you could have even asked for the Americans to grant more scholarships to Zimbabweans based in America. These Zimbabweans would in future be expected to contribute in Zimbabwe's development.
As an example, the Mexican President stands up regularly and encourages the USA to document and regularise visas and other immigration formalities for Mexicans in the USA. This is Mexico's national policy as they fully appreciate and understand the role played by their Diaspora population based in the USA. As Prime Minister, it would be good if you could stand up and encourage host governments to be accommodative to Zimbabweans abroad.
The choice of returning to Zimbabwe, let it be an individual choice. What matters is that someone still identifies with their motherland and still contributes in whatever way they can. There is no need or urgency for Zimbabweans abroad to all flock to Zimbabwe.
There are many Jewish people all over the world, in the United States in particular and all over Europe. Whilst they are encouraged to return home once in a while, there is never a push for them to abandon their current residency. The Israeli government policy is just to encourage its citizens abroad to remain committed to their motherland; to contribute; to invest and to visit as tourists.
Non-resident Zimbabweans must be allowed to vote. No taxation without representation! This is where your party should show leadership and difference with the opposition. Zimbabweans were expecting that you would make a major announcement that Zimbabweans can vote from wherever they are, as long as they go and register at the embassy or consulate.
Non-resident Zimbabweans must be allowed dual citizenship or nationality. This is a critical step that needs to be included in the proposed new constitution. This is a world wide trend to be accommodative to former residents and allow them to hold dual nationalities.
It is just unacceptable for someone born in Zimbabwe to be forced to try and get a visa to be allowed to visit Zimbabwe. These laws need to be amended to suite modern times and trends.
Non-resident Zimbabweans must be allowed to select non-resident Members of Parliament to represent Zimbabweans in all major nations. As an example, the non-resident Zimbabweans in the UK must be allowed to vote for a Zimbabwean based in the UK to represent them.
If Zimbabweans in Mabvuku or Kuwadzana are allowed to select a Member of Parliament, there is no reason or excuse for all Zimbabweans based in South Africa or UK not to be allowed to vote for one of their own to represent them in the Zimbabwe Parliament.
After many years of petitioning and fierce debate, the Italian government, in late 2001, finally passed a law allowing Italian citizens living abroad to vote in elections in Italy by postal ballot. Italians wishing to excise this right must first register their residence abroad with their relevant consulate.
The Italian Parliament is one of the few legislatures in the world to reserve seats for citizens residing abroad. There are twelve such seats in the Chamber of Deputies and six in the Senate. This is a model that Zimbabwe should closely look at and adopt or a modified version thereof.
The Italian Overseas Constituency consists of four electoral zones, each of which elect at least one Deputy and one Senator: Europe (including Russia and Turkey), South North and Central America/Africa, Asia, Oceania and Antarctica.
The Central message should have been to thank the western governments for accepting and looking after Zimbabweans during their time of need. In addition, a call should have been specifically made to encourage western governments to grant suitable immigration status that would allow Zimbabweans to travel between Zimbabwe and wherever they are based.
Whilst there is a shortage of skilled personnel, it is also correct that there is unemployment of close to 80%. Therefore, to call for the return of more workers before those at home are fully employed cannot be a clever policy.
A relevant and related fact is the return of exiled business people and entrepreneurs. As you will recall, in my May 2009 Letter to you, I mentioned some of these individuals by name. These are some of the people that should be encouraged and given incentives to return to Zimbabwe. Most of these people have skills and the ability required to create jobs which Zimbabweans desperate need. When they return and create jobs, a call such as the one you made in London will be like preaching to the converted Hon Save.
Currently, all civil servants are still earning US$100 per month regardless of their rank or experience. Whilst it's important to acknowledge that there may have been progress in restoring some basic social services, these remain way below acceptable standards.
When most Zimbabweans were growing up in Magwegwe, Emakhandeni, Kambuzuma, Warren Park and other neighbourhoods, these places had functioning social services such as fully staffed schools and clinics. Many won't mind returning to these places.
However, to ask someone with a young child who is attending a fully-functioning school in one of these western nations and expect them to pull out their child and send them to some school at present day Magwegwe or Sakubva may be asking for too much.
This is not about blaming anyone but once a human being experiences a better way of doing things, it's hard to ask them to sacrifice that and regress to the past without adequate assurances and incentives.
Lifestyles and experiences have changed for most non-resident Zimbabweans. A lot of them have built networks of friends and associates and other support systems which can not be easily be replicated back in Zimbabwe. A lot will be reluctant to come and start afresh to rebuild networks and support systems.
However, many could still return as tourists and investors. This is what Zimbabwe desperately requires.
Whilst we have seen various efforts to attract foreign investors to Zimbabwe, we have yet to see a direct and sustained effort to try and re-attract Zimbabweans as investors and tourists. Charity begins at home Hon Save.
There is need for a clear government programme on how these Zimbabweans will be treated when they come back home. There are a few specific areas such as waiver on import duties, tax breaks for those who set up businesses and proper guarantees on the rule of law and respect for private property. These may seem trivial issues but these are some of the basic things that most non-resident Zimbabweans take for granted and readily expect because they have been fully exposed to the workings of a normal representative government which listens to its citizens.
The communication process is correctly a two way process. From the events in London, it was apparent that there may have been some in your team who were taking non-resident Zimbabweans for granted. Hon Save, when people say they want change, they want such attitudes to change as well.
The people want to be consulted well in advance, especially when it concerns their future. Had the people been consulted, I doubt you would have called for Zimbabweans to return home. Rather, Zimbabweans expected you to encourage the host governments to make life a little easier for Zimbabweans by granting them work permits and other relevant immigration status that would allow them to work, study and continue to contribute as they have always done in the development of the country.
This is where your team should have done its homework, and asked Zimbabweans what they expect to hear from the Prime Minister. The western nations are still reluctant to release aid because they know things are not okay.
You as the Prime Minister could have simply requested that these host governments deliberately pursue policies that will allow Zimbabweans to continue self development whilst things stabilise.
An advanced model would have been the government of Zimbabwe directly requesting the USA government and other nations to give internships to a select number of Zimbabweans. These Zimbabweans would be employed within these respective governments for periods of up to 24 months, getting training on how governments are run. This would give your party capacity after the next election to find a pool of highly qualified and experienced Zimbabweans to choose from and help steer the country forward.
Many Zimbabweans still feel aggrieved and haunted by past and current events. The government should consider a Truth and Reconciliation Commission to handle some of these grievances. It is only when people see such developments that they will begin to really believe the change is irreversible, and justice has come.
The nature and mandate of the Truth and Reconciliation Commission is not to be vindictive but rather to close a sad chapter in out Great Nation's history.
In addition, just calling for the return of Zimbabweans without proper signed government-to-government agreements can complicate matters. Zimbabwe can easily get direct assistance linked to the return of non-resident Zimbabweans. This assistance has to be properly negotiated and documented before any call is made to ask people to go back and stare hunger and being jobless.
I hope you wont find these letters annoying. They are meant as free advice.
Gilbert Muponda is a Co-Founder of 3MG Media. He can be reached on Facebook, ZimFace and email:gilbert@3mgmedia.ca
Letter to Zimbabwe Minister of Finance
Minister of Finance
Ministry of Finance
New Government Complex
P.O. Box 7705
Harare
Zimbabwe,
15 August 2009
Dear Hon Minister Tendai Biti
RE ; GILBERT MUPONDA and ENG CAPITAL (PVT) LTD RETURN OF SEIZED ASSETS
Hon Minister Biti this is an appeal to your esteemed office for your intervention in the return of wrongfully seized personal assets and those of ENG Capital - a legally incorporated company under Zimbabwe's Constitution and the Company Act.
1 - My name is Gilbert Muponda , I am a Zimbabwean born Entrepreneur currently living in exile in Toronto, Canada. I am a founder and shareholder of ENG Capital (PVT) LTD . You may have never heard of me so I will give you some brief back ground .I was the first person arrested in the 2003-2004 so-called anti graft campaign by Reserve Bank Governor Gideon Gono immediately after he took over at the RBZ on fabricated charges and allegations. These allegations were a smokescreen created to allow the grabbing of my assets and those owned by my Company ENG Capital (PVT) LTD. In the process of being dispossessed on my assets and ENG assets I was arrested, abused, beaten, harassed, tortured, denied food, medicine, water and sleep all in an effort to get me to confess tofalse charges whilst my assets were being stripped from me. In addition I was forced tosleep with dead bodies and share blankets with people suffering from infectious diseases as a way to weaken my resolve and coerce me to surrender my fight to protect my Company and my assets. It is only natural justice that assets seized under such conditions be returned or compensation be paid and those responsible held accountable.
I was specified without being accorded an opportunity to defend myself or present my side of the facts. The constitution of Zimbabwe is clear that before anyone is specified that individual must be accorded a hearing wherein they can present relevant facts. This did not happen which was deliberately done to strip me of my Company and personal assets.
ENG was sufficiently liquid and solvent to meet its liabilities but despite all this its cheques were being bounced and dishonored. This act alone of bouncing and dishonoring cheques of a Financial Institution creates panic and impression of a Bankrupt Institution. It must be noted First Mutual Life and National Discount House being ENG counter parties in fact sued Zimbank for irregularly dishonoring ENG cheques at a time the ENG account was fully funded and had sufficient funds to meet its liabilities. This clearly confirms a well calculated campaign to close down ENG and grab its assets.
2 - The purpose of my letter is to seek your assistance in recovery of ENG assets which were unjustly Taken over by certain individuals. Specifically I am seeking your attention on the possible return of Century Bank /CFX Bank to ENG Capital and its Shareholders and Contributories. This is an ownership dispute which may have far repercussions as Zimbabwe tries to repair its image as an Investor friendly destination. Since the formation of the GNU it has given hope that a sense of Justice can be done or seen to be done on individuals who were illegally and irregularly disposed of their assets.
I would like Century Bank/CFX Bank returned to me or to be fairly compensated for the controlling stake that was snatched from ENG. By way of copy of this letter I also seek toengage CFX BANK shareholders and Management on how my claim can be amicably be resolved.
3 - I am writing to you as Minister responsible for both the Reserve Bank ,Zimbabwe Stock Exchange and the Financial sector regulation. The Financial sector is on recovery path and the particular Institution is also on recovery path and as such its important that the dispute be resolved amicably.
4 - The Government of Zimbabwe (GoZ) through its central bank, The Reserve Bank of Zimbabwe (RBZ), by way of instruction from its governor, Dr Gideon Gono, seized and forfeited my personal assets and those of my company ENG, without due process.
5 - I am seeking the return of my Primary residence and home at number 17 Chishawasha road, Chishawasha Hills, Umwinsdale. Harare. This was my personal Property, only home and Primary residence which was seized and sold without due process and was against all natural justice as it left me homeless.
6 - The seizure occurred when government took away my personal property and sold it, while the forfeiture occurred when legal title to my property was permanently transferred tothe state.
7 - Dr Gideon Gono, the RBZ, the GoZ (through the AG's office), police, and prosecutors, possess the power to seize any assets on the slightest pretext, whilst abusing the existing seizure law.
8 - Honorable Minister, justice requires that the Ministry of Finance lift the corporate veil of CFX Holding and Century Bank and peer under the skirts of those companies to determine the extent of the ENG asset theft that occurred. And follow the track of various changes of ownership of that Bank over the last 5 years.
9 - ENG, a company incorporated under Zimbabwean law, is a juristic person, a bearer of rights and duties that is not a natural person, but which is given legal personality by the law. An incorporated company is recognized by law as a separate legal entity, distinct from the separate personalities of the members of the body. The law should treat ENG like any other independent person having rights and liabilities. A company, as a legal person, may enter into contracts, own property, ENG owned a material amount of valuable assets despite the media campaign which tried to portray ENG as a pyramid scheme which only owned vehicles.ENG owned Century BANK which was subsequently renamed CFX Bank.
ENG was sufficiently liquid and solvent to meet its liabilities but despite all this its cheques were being bounced and dishonored. This act alone of bouncing and dishonoring cheques of a Financial Institution creates panic and impression of a Bankrupt Institution. It must be noted First Mutual Life and National Discount House being ENG counter parties in fact sued Zimbank for irregularly dishonoring ENG cheques at a time the ENG account was fully funded and had sufficient funds to meet its liabilities. This clearly confirms a well calculated campaign to close down ENG and grab its assets.
10 - ENG Capital group had a market value of US$ 175 million, just before the RBZ descended on the Institution.
Below is a brief ENG Group Structure ;
ENG HOLDINGS GROUP STRUCTURE
- SUBSIDIARIES
- ENG CAPITAL INVESTMENTS PVT LTD
- ENG ASSET MANAGEMENT PVT LTD
- ENG REAL ESTATE
- ENG NOMINEES PVT LTD
- ENG PRIVATE EQUITY (PVT) LTD
- ENG CAPITAL ADVISORY SERVICES
- ENG STRUCTURED FINANCE
ADDITIONAL MAJOR ASSETS OWNED
- Century Bank Holdings (now CFX bank)
- Leasing Company of Zimbabwe, Century Asset Managers)
- Century Discount House
- Hybri Micro-Finance Institution
- Care Insurance PVT LTD
- RestCel Insurance PVT LTD
- Amalgamated Health Services ? (Harare West Hospital )
- 15% of OK Zimbabwe Limited
- 15% of Zimplow Holdings Limited
- 20% Medtech Holdings Limited
- Hornet Re-Insurance PVT LTD
- Pearl Pension Fund Management
- 25 % Clan Holdings Limited
- 25 % Zimbabwe News Papers Group - Zimpapers Limited
- Allied Conveyor Belts PVT LTD
- River Drilling PVT LTD
- Real Estate including (Anastasia Court, Belgravia House, Thaine Building)
- Various Listed ZSE Listed shares
- Treasury Bills
- GMB Bills
- Cargill Commercial Paper
- $ 4 billion - Alliance Capital Debenture (representing 123 million First Mutual Life shares)
- 23 Million First Mutual Life shares
11- This mêlée was nothing more than a ploy to infringe upon my citizenship rights and strip me of my assets; a well orchestrated political game to deny perceived enemies of the governor financial freedom.
12 - My battle against civil asset forfeiture is one for the preservation of freedom and property. This is an important area as Zimbabwe seeks to portray an image of a stable state with the rule of law and private property rights are protected and preserved.
13 - All facts indicate to a grand miscarriage of Justice.
14 - A miscarriage of justice occurred as ENG and its directors now bear the burden of proving their innocence. The preponderance of evidence, which means that the RBZ only must make a better case - however slight, than the property owner - ENG. This HonorableMinister is not how we expect justice to carried out in country a country seeking to re-establish itself as an attractive investment destination.
15 - As a detailed background in April 2003 ENG Capital Investments acquired Century Discount Holdings from Century Financial Holdings ( A ZSE listed Financial Holdings Firm).The purchase price was Z$1.5 billion then equivalent to US$ 3 million. The purchase price was paid in full. ENG then applied to the Registrar of Banks and Financial Institutions for the change of controlling shareholder approval which approvals were denied.
16 - After several attempts to get the underlying reasons for the denial I was informed that " the Authorities" were not comfortable with ENG political inclination which they said remained "unclear" in addition issue of the ENG Directors age was raised. We then tried tofind out if Century Financial Holdings was in a position to refund ENG for the purchase price and to reverse the Century Discount House purchase. Century Holdings was not in a position to refund ENG.
17 - The only recourse was that ENG had to acquire Century Financial Holdings to mitigate any potential loss of outlay on the Century Discount house acquisition. As such ENG and its associated Companies acquired a total of 52% of Century Financial Holdings making Century and ENG subsidiary.
18 - After my arrest on fabricated charges ENG was placed into Provisional Liquidation as a way to secure the creditors. The creditors agreed to take shares held by ENG IN lieu of payment. As such the contributories, directors and lawyers and creditors agreed the shares should not be sold whilst a fair valuation was being negotiated. However we were shocked to read in the papers that a parcel of 309,000,000 Century shares belonging toENG had been sold through a pre-fixed special bargain transaction on or about 12 May 2004. The beneficiary to this transaction have remained a mystery even though we have reliable information as to the probable ultimate beneficiaries.
19 - Within a week of this sell of shares it was announced that Century Bank will now be merged with CFX Bank and the new Bank will be called CFX Bank. It is clear the merger was a laundering transaction meant to hide and sanitize the illegal and irregular transfer of the shares owned by ENG.The name Century was immediately removed and the new entity rebranded CFX Bank despite the fact that Century Bank provided a majority of the assets and infrastructure of the new Bank.
20 - The so-called merger was only arranged to hide the true nature of the illegality of the transfer of ENG shares in Century. It is clear that without the illegal and irregular share transfer the merger would not have happened and would not have made any sense ,it was therefore just done to cover the tracks of the asset grab that had taken place
21 - Through our Lawyers Ziweni and Company we sought the identity of the buyer and also to clarify that the share sell was null and void as it had all whole marks of corruption, insider dealing and was being challenged by the beneficial owners of the shares. In addition the shares had been sold through a special bargain and not an open market transparent transaction. The shares were sold for an unrealistic amount of Z$ 3 billion when ENG had acquired the same shares for at least Z$35 billion. This resulted in the prejudice of Z$ 32 billion to ENG Creditors and Contributories/Shareholders. As such ENG contributories were not fairly and justly paid for the value of the shares held by ENG. Its this discrepancy that I want resolved and close the matter so that the Institution and My self can each focus on our future without any litigation or dispute lingering on.
22 - We also asked the Zimbabwe Stock Exchange to investigate and stop the share transfer. However due to the general prevailing atmosphere and fear to challenge "authorities " no one was willing to assist us to stop or challenge this illegal and irregular transfer of the shares to an " unidentified" buyer believed to be a group of senior political figures. In this instance the Zimbabwe Stock Exchange did not act properly and prudently in defending and safeguarding shareholder interests. Given that we had raised a legitimate concern the share transfer should not have been permitted.
23 - As a way forward I propose that Century Bank /CFX Bank and other ENG Assets be returned to ENG Shareholders/ Contributories or a fair compensation be worked out and paid out to the ENG Shareholders and Contributories to settle the dispute. I further request your assistance on the return the return of my Primary residence 17 Chishawasha Road,Chishawasha Hills,Umwinsdale. Harare. This illegal seizure left me destitute and homeless.
For the sake of transparency I am copying this letter to the following ;
Reserve Bank of Zimbabwe Governor - Dr Gono
Minister of Justice - Hon Patrick Chinamasa
Zimbabwe Stock Exchange CEO - Mr Emmanuel Munyukwi
CFX BANK Board of Directors
As indicated above I hope we can quickly come to conclusion on the matter as a pro-longed dispute may not be in anyone's interest.
Yours Faithfully,
Gilbert Muponda
1-416-841-5542
1-647-994-5542
Email - gilbert@gilbertmuponda.com
Skype ID - gilbert.muponda
Lawyer letter to Biti
OUR REF: OCG/pmd/2
Tuesday October 27, 2009
The Minister of Finance
New Government Complex
HARARE
Attention: Hon. T. Biti
Dear Sir
Re: OUR CLIENT ENG CAPITAL (PVT) LTD: INTEREST IN CFX FINANCIAL SERVICES LIMITED
We refer to the writer's telephone conversation with yourself on Tuesday, October 27, 2009 and confirm that we represent Mr. Gilbert Muponda, the managing director of ENG Capital (Pvt) Ltd. We also make reference to our letter dated October 19, 2009 addressed to the Company Secretary at CFX Financial Services Limited a copy of which was forwarded toyour office; marked for your attention.
For your convenience and perhaps to refresh your memory, we forward herewith a copy of our client's letter to you dated August 10, 2009 which letter gives a detailed explanation of our client's business history with particular reference to its proprietary interest in the shareholding of CFX Financial Services Limited.
Mr. Gilbert Muponda remains in exile in Canada and the specification order against him is yet to be uplifted. Since he is a specified person, he will find it very difficult to successfully institute legal action to stop the proposed extraordinary general meeting of CFX Financial Services Limited scheduled to take place in Harare on November 12, 2009. The provisions of Section 10 of the Prevention of Corruption Act (Chapter 9:16) militate against any successful litigation by Mr. Gilbert Muponda. Put simply, our client's main request to your esteemed office is to assist in the possible return of Century Bank/CFX Bank to ENG Capital (Pvt) Ltd and its shareholders and contributories. In deed, a gross injustice would occur if our client's proprietary interest in CFX Financial Services is not acknowledged and duly acted upon by all stakeholders.
We take this opportunity to thank you in anticipation of your co-operation and assistance in conclusively resolving this matter.
Yours faithfully
SENATOR O.C. GUTU
GUTU & CHIKOWERO
cc client
ENG STORY MUST BE TOLD
1 Year, 9 Months ago
I read with concern some attacks that have been levelled on Gilbert Muponda and ENG by some sections of the Zimbabwean community. It is disappointing to note that people with very little or no knowledge of ENG have taken it upon themselves to pretend they know it all about Gilbert and ENG.
I know Gilbert from humble beginnings to the time he rose to fame and can attest that he is shrewd and entrepreneurial, intelligent and talented and above all humble person. It is unfortunate that his business empire had to be expropriated by Gideon Gono under the guise of financial reform when in actual fact nothing was reformed and everything has collapsed around him.
ENG was liquidated no creditors losing money except the shareholders who could not realise the true value of their investments as the assets of ENG were grossly undervalued so as to allow Gono and cronies to take over the lucrative investments made by ENG.
For starters, people must realise that ENG was a solid company. It had valuable assets, failure to meet liquidity may have been due to poor risk management on the part of the management team which Gilbert had oversight, but that could have been rectified by authorities insisting on the appointment of people with risk management knowledge rather than winding the company at the expense of its shareholders.
Creditors who had a claim were all paid off and the question to ask why did Gono insist on liquidating a company that was solvent. The answer is simple because it provided Gono with an opportunity to expropriate ENG in the same way Mutumwa Mawere was quickly specified and had his assets taken away from him.
ENG had a lot of underlying assets which when exercised were more valuable than the liabilities ENG faced. At the time of its liquidation, ENG had Z$185 billion in assets and Z$85 billion in liabilities. From an analytical point of view the company did not deserve to wind up, it may have been technically insolvent but that does not mean it was not viable.
Sadly on liquidation, ENG was grossly undervalued to facilitate the taking over of ENG by Gono and his associates. ENG owned shares in listed companies and as such there was no reason for undervaluing such assets as they had a ready market. It does not make sense that ENG's shares were later to be used by Renaissance to acquire the control of First Mutual Life. Renaissance's control of First Mutual Life using shares expropriated from ENG goes on to show that ENG was a viable company and did not warrant going under.
It is sad that Zimbabweans never got to be told the truth and when Gilbert presents his side of events it appears every one once to persecute him for telling his side of the story.
What I advise people is to seek ideas from Gilbert, how did he manage to make it at a tender age without reliance on government and quasi-government institutions for funding like what most indigenous institutions did. A lot of indigenous banks had to rely on government controlled institutions for shareholding and support, which Gilbert and ENG did not do.
My advise to those who look down upon Gilbert and his achievements, I say this is not the end of the world, Gilbert will bounce back again in future and you will all see that it is not a fluke that he managed to run one of the most successful financial institution in Zimbabwe not matched anywhere. But because of jealous, his ideas were not allowed to flourish.
In some of my famous phrases, I say 1) You cannot bring a good person down and 2) There is no book that ends with one chapter. Gilbert has age on his side and will once again show Zimbabweans and the world that it was no fluke, and this time around he will be a big force for good. Time will tell.
Looking at ENG's investments given below, it is clear that the Company had assets that were liquidity and not what people were made to believe that the company was insolvent.
ENG HOLDINGS GROUP STRUCTURE
- SUBSIDIARIES
- ENG CAPITAL INVESTMENTS PVT LTD, ENG ASSET MANAGEMENT PVT LTD, ENG REAL ESTATE, ENG NOMINEES PVT LTD, ENG PRIVATE EQUITY (PVT) LTD, ENG CAPITAL ADVISORY SERVICES, ENG STRUCTURED FINANCE
ADDITIONAL MAJOR ASSETS OWNED
- Century Bank Holdings (now CFX bank)
- Leasing Company of Zimbabwe, Century Asset Managers)
- Century Discount House
- Hybri Micro-Finance Institution
- Care Insurance PVT LTD
- RestCel Insurance PVT LTD
- Amalgamated Health Services ? (Harare West Hospital)
- 15% of OK Zimbabwe Limited
- 15% of Zimplow Holdings Limited
- 20% Medtech Holdings Limited
- Hornet Re-Insurance PVT LTD
- Pearl Pension Fund Management
- 25 % Clan Holdings Limited
- 15 % Zimpapers
- Allied Conveyor Belts PVT LTD
- Real Estate including (Anastasia Court, Belgravia House, Thaine Building)
- Various Listed ZSE Listed shares
- Treasury Bills
- GMB Bills
- Cargill Commercial Paper
- Z$ 4 billion - Alliance Capital Debenture (representing 123 million First Mutual Life shares)
- 23 Million First Mutual Life shares
It can be seen from the list below that Gilbert and ENG had influence in the running of some of the quoted companies which in itself brings an aspect of power which in most cases infuriates authorities and especially politicians whose only belief is that you can only prosper when you go through them, which was not the case with ENG. ENG's power was in tapping intelligent guys from National University of Science and Technology (NUST) who had had been grilled during their years of study at the University including industrial exposure gained in their thirds years in the financial sector. Most of the guys employed had undergone a B.Com programme in Finance Honours which had most of the tools that Gilbert had to use to gain some leverage in the financial sector. Gilbert assembled a team that had the financial sector as the main focus. The guys were raw and intelligent and not contaminated by old ways of doing business, something that was used to target the youngest financial institution ever.
For the benefit of those with little knowledge about the NUST, this institution equips students with theoretical and practical experiences which make the students attractive in the job market. The Faculty of Commerce that led to the rise of ENG. Most of the guys had done B.Com Finance where they were grilled in arrears of financial analysis for analysing financial information, money market for short term investments and capital markets for raising long term finance and advisory work, Furthermore the students are equipped with risk management knowledge and other innovative financial products like derivatives which are tools used in the financial market.
With the above theoretical knowledge most of the guys are then exposed to a year of industrial attachment where they see some of the concepts learnt at university in practice. The industrial attachment exposures ensures that NUST graduates will have a year's experience on completion which places them in a better position than those graduates who finish all their university life at campus without industrial exposure.
ENG benefitted a lot from NUST graduates who were ready to try innovative ways of doing business and use concept not tried by all before them. It is one aspect of the ENG story that is never understood by the general public that ENG was not just an ordinary institution; it was built on firm foundation which was undermined by Gono using his new powers derived from his new masters in ZANU PF. Instead of learning from ENG, GONO decided to grand stand with terrible consequences of which no expert is needed for all of you to decipher.
Furthermore, Gilbert was not an ordinary person at NUST. He was the Senate Representative for Finance Students and throughout his university student life he was the class representative. This goes on to show that Gilbert is a natural leader as he assumed important leadership roles at a young age. It is not by chance (outlier) that he went on to lead at NMB and TNFS (Finance boutique).
What people must bear in mind is that there is no rule of law in Zimbabwe especially for ordinary people like Gilbert who did not have political links except for his expertise and genius. A closer look at the companies that Gilbert highlighted as his investments you can see that he did not rely on government or quasi government institutions for funding.
Most of the investments of ENG were in quoted companies, which confirms the fact that ENG's strategy was to invest in liquid assets in the sense that some of the assets had a market and could be easily liquidated, hence the ease with which Gono had to force for the liquidation of ENG through special purpose vehicle he had was a beneficiary.
For your own information, Gilbert is talented individual having at a tender age worked on high profile corporate finance transactions including the listing of Econet Wireless Holdings, the largest mobile phone operator in Zimbabwe in 1998. Whatever low opinions people have about Gilbert, it is from an uninformed position, for people who know Gilbert they have great respect for this genius and young entrepreneur.
What is wrong about Zimbabweans today is selfishness and aloofness and ignorance. Gilbert worked believed in building an empire that spread across a wide spectrum which may have led to his downfall. Gilbert's business concept was envy to many including the old school who believes in tapping resources from government or quasi government institutions. ENG had to rely on raw talent to push forward its business concept which found no support from people in government.
If ENG was in the developed world/economies, the company would have received massive support for it was a first that a successful organisation can be built by guys straight from school.
I encourage the young to learn from the ENG story and ensure that in future we will have more of the likes of Gilbert and not youngsters who parrot ZANU PF slogans and policies that have brought Zimbabwe to its knees.
Zimbabwe 2009 - Gono and the Zanufication of the state
Posted on April 24th 2009
On 20 April 2009, Dr. Gono in defence of the controversial quasi-fiscal operations published a 20-page supplement in the Herald whose contents raises more questions than answers.
Zimbabweans now know that the RBZ was an owner of vehicles that it did not need for its own operations.
Although it is common cause that during Gono's first term, the constitution of Zimbabwe was not suspended to allow the distinction between the state and the RBZ to evaporate, it is significant that only a few wise men were privy to the allocation of state resources and to the apparent hiding of state assets on the books of the RBZ.
When accusations were made that Gono had effectively transformed the RBZ into a super state, no one had an idea including the last parliament of the extent of the operations that are not only offensive but had the effect of undermining the democratic constitutional order.
It is instructive that in framing the GPA, ZANU-PF was careful to ensure that a universal acceptance of the fact that Zimbabwe was under a sanctions regime should be the starting point. Once this fact was accepted by all the parties, it became necessary to locate the quasi-fiscal operations in context. The only context Gono wanted and got is that the RBZ was forced by the sanctions regime to undertake activities that ordinarily would not be permissible under a democratic constitutional order.
Gono's defence as expected is that he was a victim and had to do what he did in the defence of the motherland including breaking the very laws that he selectively sought to apply and enforce.
It has now been disclosed after the event that funds totalling US$1.2 billion were disbursed but not yet refunded during the period of madness. It was not clear from Gono's statements what the terms and conditions under which such funds were disbursed.
At the very least the nation must be informed as to how the peoples' funds were allocated and who precisely was involved in making the decisions to allow the funds belonging to the people to be allocated with no transparency.
The mere fact that Gono chose to inform the nation through a paid newspaper supplement must worry anyone who believes in democracy.
One would have expected a regularisation of the illegal and unconstitutional extra-budgetary allocation to be the first order of business of the inclusive government. This would have then allowed the Minister of Finance to inform the public appropriately.
The foreign currency allocated to state-owned and controlled institutions under opaque conditions totalled US$2.1 billion. It is not clear how the funds were allocated and more importantly what the terms and conditions were
.
Parastatals are juristic persons and their control is vested in their boards. Any borrowings by parastatals have to be processed and channelled through official channels. What is evident is that decisions during the dark period were made by one individual i.e. Gono on who got what and when.
In his defence, he will and has argued that he was issued with instructions to make the funds available. However, public funds do not belong to Gono or the RBZ and, therefore, should have been allocated as prescribed in law.
Although Gono has persecuted many for alleged externalisation, it is now evident that he was the chief culprit.
It appears that his actions were indemnified by some power that is still to be exposed in the interests of the nation getting to grips with the absurdity of the manner in which the state became a football for the powerful and well-connected.
We also now know that a few private sector companies benefited from direct foreign currency allocations in the amount of US$13.7 million.
The controversial vehicles mischievously allocated to legislators are part of the assets that were allegedly procured by the RBZ on behalf of the government notwithstanding the fact that there is no paper trail to confirm the contractual relationship between the government and the RBZ in respect of such assets.
It is significant to note that the RBZ is not the government and, therefore, one would need to have an agency agreement between the two parties setting out the terms and conditions under which the RBZ would represent the government.
Agricultural equipment, a minimum of 1,400 vehicles including cars allocated to the President and cabinet members, computers and office equipment were procured by the RBZ under opaque conditions. Gono did not even bother to inform the nation on the value of the assets so purchased.
It would not be surprising to establish that the value may have been inflated and more importantly the identity of the contracting parties of the RBZ. Who was on the value chain? The nation needs to know the identity of the few who got so much without going through a public tender process.
Unless one has something to hide, there is no reason that Gono would find it fit to withhold such vital information especially when it is common cause that public resources must be allocated in a transparent and open manner.
At this juncture it is only fair that I share my own personal experience during the dark years. On 6 September 2004, SMM Holdings Private Limited (SMM), a company that is ultimately beneficially owned by me was placed under state control on allegations that it was state indebted.
What is significant is that in the decree that was promulgated by President Mugabe using state of emergency powers there was no definition of what the state means other than an attempt to make the state retrospectively defined as the RBZ, ZIMRA, ZESA and all state owned institutions.
Using this broad definition, it was then possible for the state to unilaterally assume the rights of separate and distinct institutions hence the law was subsequently enacted under the name: "The Reconstruction of State Indebted Insolvent Companies Act 2004" notwithstanding the fact that the state is not a contracting party. If the state is not a contracting party, how can one be indebted to it?
It would not be surprising if the funds that RBZ allegedly disbursed to nameless and faceless institutions includes funds advanced to SMM after the takeover of the company.
In the interests of advancing the interests of the inclusive government, it is now evident that the nation may never know how its funds were allocated and disbursed unless citizens demand to know.
The right to know in any democratic constitutional order is vested in the people in whose interests the state is organised to serve. It cannot be acceptable that Gono can be allowed to pontificate with impunity.
At the very minimum, one would expect the RBZ to fully account for its operations especially if such actions were undertaken in the name of the state. What is ironic is that the focus is now on who should allocated vehicles to legislatures and not on making the RBZ accountable for its actions.
Gono plays Pope and Cop
Posted on May 07th 2007
WHAT a difference a week makes!
My week started on Sunday, April 29 when I read an article published by the Sunday Mail with the title: "Gono pushes for amnesty" and during the week, another article was published by the Herald on 4 May 2007 entitled: "Forex remittance defaulters warned."
How can the RBZ be pushing for amnesty while at the same time threatening others of punishment for the same offences? It is important that we unpack the amnesty call and attempt to focus on the role of the RBZ in creating confusion and undermining the rule of law in Zimbabwe.
It is evident that the RBZ has now become a critical player in furthering the exploits of the political actors who see no evil in their policies and, therefore, wish to remain in power indefinitely. Why call for amnesty when the criminalisation of the intended beneficiaries of such amnesty was meant to ameliorate the problems of the country? Does it mean that Gono's policies were misguided? Who should be culpable for the senseless policies?
The Sunday Mail reported that Gono was pushing for an amnesty for some economic fugitives who fled the country in the past few years arguing that this would see the country dedicating its resources to worthwhile economic endeavors. He was reported to have said that the amnesty would earn the Government a lot of goodwill and encourage the "economic fugitives" to deal with their own conscience.
With respect to the justification for the change of policy, he had this to say: "In South Africa, they had amnesty that related to externalisation of foreign exchange which brought in significant sums back into the country. This related to exchange control violations but did not relate to criminal activities. It's along the same lines that have motivated me to call on us to formally examine that approach because of the knowledge that many Zimbabweans are living in fear because they have skeletons in their cupboards and are just waiting for the law to catch up with them. The call must not be read as a sign of weakness on the part of the central bank but is one in the same spirit of healing, in the spirit of the Social Contract and it's in the spirit of trying to rebuild our country.
He made the allegations that there are companies and individuals that are under-invoicing exports and over-invoicing imports and violating Exchange Control Regulations. On this issue, he made special mention of the tourism industry as follows:
"In the area of tourism as well as hunting, we are aware of organisations which for one reason or another have kept this country's proceeds outside and the proposed amnesty is meant to encourage them to deal with their conscience, clean their decks and exorcise the demons that are in their bottom drawers in a manner that will benefit the country.
"The proposal of an amnesty of that kind would obviously need to be predicated on a time frame and conditionalities including the fact that those who had actually been tried and found guilty, but are running away from justice would obviously not be covered by such amnesty."
He then proposed a reconciliation framework involving a number of stakeholders as social partners as a way forward in resolving the Zimbabwean crisis. He said as follows:
"This is also in the spirit of healing and forging a genuine smart partnership which has win-win features and an advancement of the principle of reconciliation as was founded by none other than His Excellency, President Mugabe.
"Such an approach would allow the country to dedicate current scarce resources to present and future transgressions than to be wasting those resources on past and often elusive misdemeanors and playing the cat and mouse game.
"Kune vanhu vakawanda vane hama dzavo whether in business or in their private capacity vasiri kurara mudzimba for fear that one day the law will catch up with them? So such a move will earn the Government tremendous goodwill from a wide spectrum of economic players. In the spirit of the ongoing negotiations for a Social Contract, the idea of an amnesty should be seriously considered."
Gono's sentiments were given legitimacy by Zimbabwe's CEO, President Mugabe, when he said: "We are all witness to the futility of trying to turn around our economy in an environment of pointless conflict."
It is evident that President Mugabe genuinely believes that the Zimbabwean crisis is externally driven and there is nothing he would have done differently over the past 27 years to make Zimbabwe a winning country. He is of the view that were it not for the machinations of imperialists and their agents with the support of unpatriotic businessmen, Zimbabwe would be a functional democracy.
There is very little that can be done to change President Mugabe's world view. This view is not only held by President Mugabe but is evidently held by Gono as well. When he was appointed as Governor of the RBZ, he was quick to target what he termed as "unscrupulous businessmen" as the root cause of the crisis. He then proceeded to cause the amendment of the exchange control regulations and transforming any alleged violations into serious economic crimes. The victims are many and identifiable.
It must be acknowledged, however, that the approach of criminalising rational economic behavior did not start with Gono. The early victims were Enos Nkala, Shadreck Shava, Dzingai Mutumbuka, Maurice Nyagumbo and company who were accused of buying cars at controlled prices and then selling the same cars at market prices.
Their alleged crimes are no different from the construction of the externalisation charges for which Gono is now proposing a policy reversal without taking any responsibility for championing such misguided policies. President Mugabe believes in controls, be it of political or economic behavior. Under his world view, the prices of commodities must be determined by the government in as much as the exchange rate.
The Willowgate scandal of the late eighties where Ministers lost their jobs for recognising that a market system offers a rational basis of allocating scarce resources demonstrated the attitude of President Mugabe to a market system and its consequences. In 2007, we find that the government of Zimbabwe has not changed its outlook on the market system. Mugabe now has a Governor who shares the same outlook and zeal to blame third parties for policies that have universally failed to deliver efficiency to any known economic system. It is amazing that President Mugabe and his colleagues continue to live in the fantasy world that believes that resources can be efficiently allocated by an administrative system.
Gono now wants Zimbabweans to accept a situation where selected individuals can benefit from buying foreign exchange at Z$15,000 to US$1 and then sell the same US$1 at Zim$25,000 or more. Gono has made his point that devaluation is out of the question but has introduced an Economic Stabilization Fund under which all foreign currency holders can sell to the RBZ their foreign currency at Z$15,000 to US$1. If there was any amnesty to be granted then Gono would be an ideal candidate for living in a fantasy world. Why would Gono attempt to deny an obvious devaluation? Whose interests is he protecting? Who benefits from the current distortions? Would President Mugabe, to the extent he knows that the RBZ is trading foreign currency at black market rate, want to continue to remain as President of Zimbabwe beyond 2008?
Anyone who does not subscribe to the misguided policies of Gono and his principals has been labeled a saboteur worthy of punishment by the law enforcement officers. While Gono was preaching the reconciliation, message he was also putting in place a whistle blower scheme targeting diamond traders.
Even illegal diamond traders are more intelligent than what Gono would expect the average Zimbabwean citizen to be. In Gono's world, a person with, for example, US$1 would be expected to exchange his money for Z$15,000 while pretending that the official rate is Z$250 when the market can accommodate Z$25,000. Assuming Gono is a rational person and has not lived in a make believe world like the 'State House' for the past 27 years, why would he expect exporters to exchange their export proceeds at Z$15,000 while acknowledging that the country is a victim of hyperinflation?
For many who have wondered why diplomats including those representing Mugabe's worst enemies have not been critical of Gono, it may not be far fetched to speculate that these diplomats may be themselves beneficiaries of the market exchange rate from none other than Your Governor. Can you imagine a foreign diplomat who, for example, receives a salary of US$20,000 per month? He faced the prospect of converting his salary at Z$250 until last week, translating into Z$5 million, compared to Z$500 million that he stood to realise from the parallel market. I am not sure that many diplomats would not find the RBZ to be an economically useful ally in the circumstances.
In an opaque system administered by Gono, there is no doubt that many beneficiaries of the illegal trades would prefer to keep quiet while selected targets are daily castigated for conduct that the RBZ should also be guilty of. What would be interesting is for Gono to make public the affairs of Fiscorp, the special purpose vehicle, set up to warehouse the quasi-fiscal operations before preaching about amnesty.
As Zimbabwe approaches the D-Day to choose a new government, it is important that key issues are openly debated and people are informed about the conduct of their agents who are in the public sector. The impression created so far is that anyone who works in government is an angel and citizens are guilty as charged. What if the policies of the government are misguided and criminal, who should give amnesty to whom? What are the choices for citizens when the world view of its first citizen is inconsistent with the values that promote progress and development? Are the poor protected by policies that are immoral and based on deception?
In criminal law, amnesty is a sovereign act of oblivion or forgetfulness (from Greek amnestia, "forgetfulness") granted by a government, especially to a group of persons who are guilty of (usually political) crimes in the past. It is often conditional upon the group's return to obedience and duty within a prescribed period. It is the action of a government by which all persons or certain groups of persons who have committed a criminal offence-usually of a political nature that threatens the sovereignty of the government (such as sedition or treason) are granted immunity from prosecution.
Amnesty allows the government of a nation or state to "forget" criminal acts, usually before prosecution has occurred. Amnesty has traditionally been used as a political tool of compromise and reunion following a war. An act of amnesty is generally granted to a group of people who have committed crimes against the state. Gono would like Zimbabweans to believe that selling foreign currency at a market rate should be treated no differently from any treasonable offence. If the truth were to be told, how many Zimbabweans would not be guilty of the same offence to make a mockery of Gono's games?
Before the end of the week, another article was published on May 4, 2007, in the Herald entitled: "Forex remittance defaulters warned". It was reported that the RBZ will come down hard on exporters that continue to deprive the economy of precious foreign currency through under-invoicing and non-remittance of foreign currency receipts. Without giving figures, the central bank said this week Zimbabwe was losing millions of dollars in hard cash to "fraudsters" within the export sector.
RBZ said while export figures for the first quarter were on the rise - up 23 percent to US$420 million - the number of outstanding receipts was too big to ignore. The RBZ went on to state as follows:
"Currently, the country is owed millions of dollars by these delinquent exporters, some of whom have literally gone into hiding. The central bank is fully aware of these delinquents, and has forwarded a comprehensive list to law enforcement agencies to track down those commodity brokers who have gone into hiding to avoid the completion of export formalities.
"Reserve Bank also notes with concern that some exporters continue to under-invoice their exports resulting in the country not realising the true and fair value of its exports.
"Exporters are further warned against such retrogressive behaviour and measures have been put in place to detect such malpractices."
While in many countries, the market is allowed to determine the exchange rate, in Gono's world exports belong to the nation and the export is merely an agent of the state. Under this construction, the exports are effectively a nationalised commodity and while the government is not exposed to production costs it nevertheless has a say in terms of the output regardless of whether viability of such producers is an issue.
What is unfortunate is that there appears to be no informed discussions on policy matters particularly in respect to what direction Zimbabwe should take to lift itself from the current quagmire. I sincerely believe that good policies induce good behaviour and progress only comes from progressive policies.
What is tragic is the chameleon type behaviour of people like Gono who exhibit many colours and the confusion they inflict on unsuspecting citizens who deserve a better deal. On the one hand he preaches amnesty while on the other fails to acknowledge the bankruptcy of his policies and programs. He plays the Pope while at the same time plays the Cop without any respect of the objective conditions on the ground and his construct actions in undermining the rule of law in Zimbabwe as well as the violation of human and property rights.
The RBZ and asset managers: implications on democracy II
Posted on October 08th 2006
WHEN I first wrote the article RBZ and the Rule of Law: Implications on Democracy, I had no idea that it would generate so much interest and controversy. Given the emergence of the RBZ and its current Governor, Gideon Gono, as the only source of salvation for Zimbabwe, it is important that we continue to test and interrogate the hypothesis that there is a causal link between the actions of the RBZ/Gono and the undermining of the rule of law, property and human rights.
In addition, there is need to test the hypothesis that democratic institutions are being undermined by the RBZ/Gono resulting in the creation of a single power centre that may be described as a "weapon of mass destruction" in the context of Zimbabwe given the consequences of a series of policies and programs implemented by the RBZ/Gono since December 2003.
In as much as people may believe that my critique of the RBZ/Gono economic policies are motivated by my substantial loss of assets pursuant to the extra-judicial expropriation of all the companies deemed to be under my control in Zimbabwe, I believe that it is important to broaden the discourse beyond me and seek to objectively contextualize the political and economic challenges facing the country and the role, if any, of the RBZ/Gono in resolving or worsening the crisis.
At independence in 1980, Zimbabwe made a choice to be a democratic state with a constitution that enshrined on its citizens a common set of rights. In choosing to create a common citizenship under one Republic, there was hope that no Zimbabwean would be a subject of another like under a monarchy or an object of another like under apartheid/colonialism. Equally, it is important to state that rights without remedies are sterile.
After 26 years of independence and given the colonial legacy, it was the expectation of many that the values that underpinned the liberation struggle would be an integral part of the nation building project and never again would the rights of a few be used to undermine the rights of many.
I have chosen to focus only on the actions of the RBZ under Gono not only because it comes at a time when the future of Zimbabwe is so bleak but because his actions do have a direct bearing on the rule of law and if not exposed may condemn the country to a state where citizens have rights with no recourse.
I believe that it is only fair that we use empirical evidence to test the hypotheses referred to above. In my article of last week, I used Makamba's ordeal in support of the thesis that the use of emergency powers to undermine citizens' rights has nothing to do with fighting corruption but demonstrates the contempt with which the importance of the rule of law is regarded by many state actors including Gono.
In this article, I have chosen to look at the ENG saga that provides a comprehensive case study of the role of the RBZ in undermining democracy and the rule of law. ENG and its executive directors, Messrs. Nyasha Watyoka and Gilbert Muponda, as well as the former legislator, Phillip Chiyangwa, were the first victims of Gono's reign when they were arrested in December 2003 during the first month of Gono's appointment. The fate was already decided when Gono made his maiden state of the nation address on 18 December 2003 by unilaterally announcing that asset management firms would fall under the direct supervision of the RBZ with effect from January 2004. He said that asset management firms were not adequately policed and posed a threat to the country's financial system.
The RBZ without any change of the legal framework assumed the responsibility to directly monitor the registration process, supervision and regulation of all asset management companies in the country. All asset management companies were required to re-register with the RBZ notwithstanding the fact that some of them were legally registered by the Ministry of Finance. By effectively assuming control of the asset management industry, it meant that he could decide single handedly decide who was a criminal and direct the police to arrest such individuals.
Before dealing with the merits of the ENG case, it is important that we put into context the regulatory framework that governs the asset management industry universally and the point of departure in the case of Zimbabwe. Asset management is often used to refer to the investment management of collective investments and is a non banking activity that is normally regulated by independent institutions established by statute to oversee the Non-Banking Financial Services Industry in the public interest.
In the case of the UK, the asset management industry is regulated by the Financial Services Authority (FSA), an independent non-governmental body, given statutory powers by the Financial Services and Markets Act 2000. It is a company limited by guarantee and financed by the financial services industry. The Treasury appoints the FSA Board, which currently consists of a Chairman, a Chief Executive Officer, three Managing Directors, and 10 non-executive directors (including a lead non-executive member, the Deputy Chairman). This Board sets our overall policy, but day-to-day decisions and management of the staff are the responsibility of the Executive. The FSA is accountable to Treasury Ministers and through them to Parliament.
It is operationally independent of Government and is funded entirely by the firms it regulates. The FSA is an open and transparent organisation and provides full information for firms, consumers and others about its objectives, plans, policies and rules. In South Africa's case, the asset management industry is regulated by The Financial Services Board (FSB), a unique independent institution established by statute to oversee the South African Non-Banking Financial Services Industry in the public interest. Its mission is to promote sound and efficient financial institutions and services together with mechanisms for investor protection in the markets we supervise.
However, in the case of Zimbabwe, the control of asset management industry has been placed under the RBZ, a state actor, whose primary goal is no longer consistent with what ordinarily would be the achievement and maintenance of price stability in the Zimbabwean economy. Only in Zimbabwe is the asset management industry defined as asset quasi-banking institutions whose financial intermediary role is mainly to manage financial assets on behalf of specific customers. By defining these institutions as quasi-banking, Gono craftily found a way of removing such institutions that fall under the Collective Investment Schemes (CIS) laws that were administered with the Registrar of Banks and Financial Institutions.
Accordingly, Parliament was circumvented by Gono through a re-definition of what is universally accepted as a non banking financial services provider into a banking platform so as to allow him to control the entire financial services industry without parliamentary oversight. While other countries see a role for an independent regulator, in Zimbabwe this is not the case. Accordingly, if you are deemed to be an enemy of the system and you wish to operate an asset management company, you now know the consequences.
As background, it is important to locate the nationalization by Gono of the asset management industry in some context. Having assumed control of this significant financial services provider, Gono instructed the asset management firms to invest 40% of their assets in productive investments. In his Monetary Statement he presented the conclusion a self-serving "research" that the RBZ had carried out on the operations of asset management firms and that said if the companies continued without adequate regulation, they would seriously compromise the broader financial services sector. The compliant media then was put into full gear with stories portraying Gono as the "messiah" and "corruption buster" who was on a mission to crack down on institutions engaged in shady dealings and indigenous banks that were described as battling for survival as well as asset management companies were his main target.
In a typical fashion, anonymous high-level sources were quoted by the media saying that banks and asset management firms - some of which were allegedly used as conduits for money-laundering activities and speculative investments - were struggling to cope with new regulations ushered in by Gono's recent monetary policy statement. Some of the statements from these nameless and faceless sources were saying that most of the locally-owned banks were facing a serious liquidity crisis and bank managers were reported to be holding emergency meetings, including on Christmas day, to find ways of surviving in the new environment. Gono, the master spin doctor gave the financial services industry their Christmas 2003 gift with this statement widely reported in the media: "Gono's threat that the curtain will soon come down on the era of the proliferation of weak, poorly-managed financial institutions dependent on cheap and unlimited central bank credit was real."
This marked the beginning of the palace coup staged by Gono whose sole mission was to identify enemies of the state and use extra-judicial measures to punish them. The pioneer victim was ENG whose directors were arrested with the media having a field day regarding the underpinning criminality of these individuals. The police arrested the two directors of ENG Capital Asset Management while its subsidiary, Century Discount House, had its operating licence withdrawn by the Reserve Bank of Zimbabwe. The arrest of the directors came after it was reported that ENG had failed to pay more than $50 billion owed to investors. The financial services industry was in panic with banks reported to be selling their properties and foreign currency reserves to improve their liquidity and raise their capital levels. After the actions of Gono, the US dollar dramatically crashed from US$1:$6 000 to US$1:$4 500.
Reports in the media were saying that the ENG directors were on the run as a result of problems engulfing their financial services concern. The firm was understood to be facing a liquidity crunch of between $70 billion and $80 billion. Creditors were reported to have pounced on ENG, seizing the firm's property with one leading bank grabbing vehicles and shares which the company holds at a local commercial bank. Asset management companies were generally reported to be the source of the problems in the financial services industry and indirectly to the economic meltdown. Against this background, there was need to identify and punish the culprits and ENG provided a convenient scapegoat and Chiyangwa provided the high profile victim needed to capture the imagination of the general public that Zimbabwe had a new no-nonsense boss.
Chiyangwa was only cleared by a magistrate of attempting to defeat the course justice, contempt of court and perjury by the magistrate's court after the State failed to build a case against him. The State in what has now been standard practice failed to prove a prima facie case against Chiyangwa and all charges were withdrawn after plea and accordingly he was found not guilty on all the three counts. Muponda and Watyoka's arrest by police on December 31, 2003 for allegedly defrauding investors which included Century Holdings, First Mutual Asset Management among others, presented Gono with the first casualties he desperately needed in proving his credentials to his masters that he understood Zimbabwe's problems and he alone had the answers.
In a dramatic development, on July 31, Nyasha Watyoka was set free at the Harare Magistrates' Courts. Harare magistrate, Mrs. Faith Mushure, finally granted Watyoka's application for refusal of further remand after an ordeal spanning over two years saying he would be called to court by way of summons if more evidence against him crops up. If any of the liberation war heroes were to come back to live and hear Watyoka, Muponda and Chiyangwa's stories they would justifiably not believe that it is the same Zimbabwe that they risked and sacrificed their lives for. It is difficult to imagine what Watyoka was thinking of when he walked out of court as free man but I am not sure whether he would have any complementary things to say about the rule of law and democracy in Zimbabwe.
The ENG and Makamba's cases share one thing in common i.e. they have not captured the imagination of the opposition parties and non-state actors who appear not to have woken up to the corporate violence taking place in Zimbabwe that has left the affected individuals with no remedies for damages suffered. I believe that the ENG proprietors have lost everything only to be told after two years that the state is still trying to manufacture a case and may proceed by way of summons. How do you compensate such a loss and is the RBZ considering a compensation package for individuals like Watyoka or it is the price they need to pay to facilitate Gono's short journey to the state house.
Notwithstanding, the state was still arguing that Mr. Watyoka must not be removed from remand. In her ruling, Mrs. Mushure considered the defence submission that Watyoka's placement on remand for over two years without a trial date was unreasonable.
She said: "As much as this court appreciates that the charges against the accused are very serious, a remand of two years in my view, is unreasonable. This court has given the State three chances to furnish the accused person (Watyoka) with his trial date, but obviously, the State has failed. The State has now failed to bring the accused person to trial within a reasonable time. I am of the view that the interest of justice will not suffer any prejudice if the accused is removed from remand. The State has failed to serve him in the two years. It was Watyoka who actually suffered the prejudice due to the State's failure to set his matter down for trial. His (Watyoka's) preparation of the defence may have improved and the delay may have led to disproportionate delay and mental torture. Further remand is therefore refused. State to proceed by way of summons for prosecution if more evidence arises."
Watyoka was asked to collect his $150 million bail and $700 000 surety from the clerk of court.
To confirm the direct nexus between the actions of the RBZ/Gono and Watyoka's ordeal, the charges are revealing. He was facing 31 counts of fraud, 12 counts of theft, seven counts of violating the Serious Offences Act and several Exchange Control charges. Watyoka's co-accused, Gilbert Muponda, having discovered that his case had nothing to do with the bona fides pursuit of justice, decided to skip bail and is now believed to be in exile.
I believe that it is important to learn from the rich experiences that have characterized post-independence Zimbabwe if the goal of creating a new dispensation is to be realized in our life time. I have often reflected on my own personal experiences and it occurred to me that even Mugabe may not be fully aware of the destructive nature of the actions that have been taken by the RBZ/Gono in the name of national interest. I do not have any idea what Mugabe would say to a person like Watyoka who may have believed in the nation building project and registered with his colleagues an asset management company that operated in accordance with prevailing laws of the country only to wake up on 31 December 2003 and found out that he was an accused person.
The legal framework that would permit Gono to nullify the licences of asset management companies that were registered under a law passed by the Parliament of Zimbabwe should be interrogated otherwise the difference between Gono's actions and those typically associated with dictators of which Africa has many examples would be the same. Surely, if Watyoka and company were guilty of fraud against investors and its clients, one would have expected a complaint by such interested parties rather than a Governor of the RBZ. One would have expected the injured parties to have their own remedies since an asset manager is nothing but an agent representing the interests of its principals. The return to an asset manager should ordinarily be management fees and we are not told to date how ENG ended up being a principal without the knowledge and consent of its principals. Instead we see the government being the complainant and the RBZ/Gono changing laws to create a room for intervention so that the rights of the legitimate interested parties are then subordinated to the state.
As Zimbabwe gropes for solutions to the current economic meltdown and political crisis, it is obvious that a critical evaluation of the role of the RBZ/Gono in undermining democratic institutions is undertaken and appropriate lessons be drawn from case studies like the one described above. Failure to appreciate the danger posed by individuals who have no regard of the rights of others and who do not have the patience to use Parliament as the law making body not only undermines nation building but exposes future generations to poverty. Rather than focusing the debate on regime change, it is time that we focus on the kind of governance that enables creative and enterprising people to apply their minds without fear of the state abusing their rights and using the law to persecute them.
In focusing on the actions of the RBZ/Gono one hopes that this exercise will enable anyone interested in the future of Zimbabwe to reflect on what Zimbabwe and its people urgently require if hope and confidence is to be restored. In as much as the ENG saga shows blacks in government do not need the former colonial master's help to victimize their own fellow citizens, there may not be any value in Benjamin Mkapa's much talked about intervention that appears to be premised on the belief that Zimbabwean problems are externally and colonially generated. It is my hope that in our lifetime we will reach a stage where we can openly talk about Africa's challenges and promise using real life examples without favour and prejudice.
The RBZ and asset managers: implications on democracy II
Posted on October 08th 2006
WHEN I first wrote the article RBZ and the Rule of Law: Implications on Democracy, I had no idea that it would generate so much interest and controversy. Given the emergence of the RBZ and its current Governor, Gideon Gono, as the only source of salvation for Zimbabwe, it is important that we continue to test and interrogate the hypothesis that there is a causal link between the actions of the RBZ/Gono and the undermining of the rule of law, property and human rights.
In addition, there is need to test the hypothesis that democratic institutions are being undermined by the RBZ/Gono resulting in the creation of a single power centre that may be described as a "weapon of mass destruction" in the context of Zimbabwe given the consequences of a series of policies and programs implemented by the RBZ/Gono since December 2003.
In as much as people may believe that my critique of the RBZ/Gono economic policies are motivated by my substantial loss of assets pursuant to the extra-judicial expropriation of all the companies deemed to be under my control in Zimbabwe, I believe that it is important to broaden the discourse beyond me and seek to objectively contextualize the political and economic challenges facing the country and the role, if any, of the RBZ/Gono in resolving or worsening the crisis.
At independence in 1980, Zimbabwe made a choice to be a democratic state with a constitution that enshrined on its citizens a common set of rights. In choosing to create a common citizenship under one Republic, there was hope that no Zimbabwean would be a subject of another like under a monarchy or an object of another like under apartheid/colonialism. Equally, it is important to state that rights without remedies are sterile.
After 26 years of independence and given the colonial legacy, it was the expectation of many that the values that underpinned the liberation struggle would be an integral part of the nation building project and never again would the rights of a few be used to undermine the rights of many.
I have chosen to focus only on the actions of the RBZ under Gono not only because it comes at a time when the future of Zimbabwe is so bleak but because his actions do have a direct bearing on the rule of law and if not exposed may condemn the country to a state where citizens have rights with no recourse.
I believe that it is only fair that we use empirical evidence to test the hypotheses referred to above. In my article of last week, I used Makamba's ordeal in support of the thesis that the use of emergency powers to undermine citizens' rights has nothing to do with fighting corruption but demonstrates the contempt with which the importance of the rule of law is regarded by many state actors including Gono.
In this article, I have chosen to look at the ENG saga that provides a comprehensive case study of the role of the RBZ in undermining democracy and the rule of law. ENG and its executive directors, Messrs. Nyasha Watyoka and Gilbert Muponda, as well as the former legislator, Phillip Chiyangwa, were the first victims of Gono's reign when they were arrested in December 2003 during the first month of Gono's appointment. The fate was already decided when Gono made his maiden state of the nation address on 18 December 2003 by unilaterally announcing that asset management firms would fall under the direct supervision of the RBZ with effect from January 2004. He said that asset management firms were not adequately policed and posed a threat to the country's financial system.
The RBZ without any change of the legal framework assumed the responsibility to directly monitor the registration process, supervision and regulation of all asset management companies in the country. All asset management companies were required to re-register with the RBZ notwithstanding the fact that some of them were legally registered by the Ministry of Finance. By effectively assuming control of the asset management industry, it meant that he could decide single handedly decide who was a criminal and direct the police to arrest such individuals.
Before dealing with the merits of the ENG case, it is important that we put into context the regulatory framework that governs the asset management industry universally and the point of departure in the case of Zimbabwe. Asset management is often used to refer to the investment management of collective investments and is a non banking activity that is normally regulated by independent institutions established by statute to oversee the Non-Banking Financial Services Industry in the public interest.
In the case of the UK, the asset management industry is regulated by the Financial Services Authority (FSA), an independent non-governmental body, given statutory powers by the Financial Services and Markets Act 2000. It is a company limited by guarantee and financed by the financial services industry. The Treasury appoints the FSA Board, which currently consists of a Chairman, a Chief Executive Officer, three Managing Directors, and 10 non-executive directors (including a lead non-executive member, the Deputy Chairman). This Board sets our overall policy, but day-to-day decisions and management of the staff are the responsibility of the Executive. The FSA is accountable to Treasury Ministers and through them to Parliament.
It is operationally independent of Government and is funded entirely by the firms it regulates. The FSA is an open and transparent organisation and provides full information for firms, consumers and others about its objectives, plans, policies and rules. In South Africa's case, the asset management industry is regulated by The Financial Services Board (FSB), a unique independent institution established by statute to oversee the South African Non-Banking Financial Services Industry in the public interest. Its mission is to promote sound and efficient financial institutions and services together with mechanisms for investor protection in the markets we supervise.
However, in the case of Zimbabwe, the control of asset management industry has been placed under the RBZ, a state actor, whose primary goal is no longer consistent with what ordinarily would be the achievement and maintenance of price stability in the Zimbabwean economy. Only in Zimbabwe is the asset management industry defined as asset quasi-banking institutions whose financial intermediary role is mainly to manage financial assets on behalf of specific customers. By defining these institutions as quasi-banking, Gono craftily found a way of removing such institutions that fall under the Collective Investment Schemes (CIS) laws that were administered with the Registrar of Banks and Financial Institutions.
Accordingly, Parliament was circumvented by Gono through a re-definition of what is universally accepted as a non banking financial services provider into a banking platform so as to allow him to control the entire financial services industry without parliamentary oversight. While other countries see a role for an independent regulator, in Zimbabwe this is not the case. Accordingly, if you are deemed to be an enemy of the system and you wish to operate an asset management company, you now know the consequences.
As background, it is important to locate the nationalization by Gono of the asset management industry in some context. Having assumed control of this significant financial services provider, Gono instructed the asset management firms to invest 40% of their assets in productive investments. In his Monetary Statement he presented the conclusion a self-serving "research" that the RBZ had carried out on the operations of asset management firms and that said if the companies continued without adequate regulation, they would seriously compromise the broader financial services sector. The compliant media then was put into full gear with stories portraying Gono as the "messiah" and "corruption buster" who was on a mission to crack down on institutions engaged in shady dealings and indigenous banks that were described as battling for survival as well as asset management companies were his main target.
In a typical fashion, anonymous high-level sources were quoted by the media saying that banks and asset management firms - some of which were allegedly used as conduits for money-laundering activities and speculative investments - were struggling to cope with new regulations ushered in by Gono's recent monetary policy statement. Some of the statements from these nameless and faceless sources were saying that most of the locally-owned banks were facing a serious liquidity crisis and bank managers were reported to be holding emergency meetings, including on Christmas day, to find ways of surviving in the new environment. Gono, the master spin doctor gave the financial services industry their Christmas 2003 gift with this statement widely reported in the media: "Gono's threat that the curtain will soon come down on the era of the proliferation of weak, poorly-managed financial institutions dependent on cheap and unlimited central bank credit was real."
This marked the beginning of the palace coup staged by Gono whose sole mission was to identify enemies of the state and use extra-judicial measures to punish them. The pioneer victim was ENG whose directors were arrested with the media having a field day regarding the underpinning criminality of these individuals. The police arrested the two directors of ENG Capital Asset Management while its subsidiary, Century Discount House, had its operating licence withdrawn by the Reserve Bank of Zimbabwe. The arrest of the directors came after it was reported that ENG had failed to pay more than $50 billion owed to investors. The financial services industry was in panic with banks reported to be selling their properties and foreign currency reserves to improve their liquidity and raise their capital levels. After the actions of Gono, the US dollar dramatically crashed from US$1:$6 000 to US$1:$4 500.
Reports in the media were saying that the ENG directors were on the run as a result of problems engulfing their financial services concern. The firm was understood to be facing a liquidity crunch of between $70 billion and $80 billion. Creditors were reported to have pounced on ENG, seizing the firm's property with one leading bank grabbing vehicles and shares which the company holds at a local commercial bank. Asset management companies were generally reported to be the source of the problems in the financial services industry and indirectly to the economic meltdown. Against this background, there was need to identify and punish the culprits and ENG provided a convenient scapegoat and Chiyangwa provided the high profile victim needed to capture the imagination of the general public that Zimbabwe had a new no-nonsense boss.
Chiyangwa was only cleared by a magistrate of attempting to defeat the course justice, contempt of court and perjury by the magistrate's court after the State failed to build a case against him. The State in what has now been standard practice failed to prove a prima facie case against Chiyangwa and all charges were withdrawn after plea and accordingly he was found not guilty on all the three counts. Muponda and Watyoka's arrest by police on December 31, 2003 for allegedly defrauding investors which included Century Holdings, First Mutual Asset Management among others, presented Gono with the first casualties he desperately needed in proving his credentials to his masters that he understood Zimbabwe's problems and he alone had the answers.
In a dramatic development, on July 31, Nyasha Watyoka was set free at the Harare Magistrates' Courts. Harare magistrate, Mrs. Faith Mushure, finally granted Watyoka's application for refusal of further remand after an ordeal spanning over two years saying he would be called to court by way of summons if more evidence against him crops up. If any of the liberation war heroes were to come back to live and hear Watyoka, Muponda and Chiyangwa's stories they would justifiably not believe that it is the same Zimbabwe that they risked and sacrificed their lives for. It is difficult to imagine what Watyoka was thinking of when he walked out of court as free man but I am not sure whether he would have any complementary things to say about the rule of law and democracy in Zimbabwe.
The ENG and Makamba's cases share one thing in common i.e. they have not captured the imagination of the opposition parties and non-state actors who appear not to have woken up to the corporate violence taking place in Zimbabwe that has left the affected individuals with no remedies for damages suffered. I believe that the ENG proprietors have lost everything only to be told after two years that the state is still trying to manufacture a case and may proceed by way of summons. How do you compensate such a loss and is the RBZ considering a compensation package for individuals like Watyoka or it is the price they need to pay to facilitate Gono's short journey to the state house.
Notwithstanding, the state was still arguing that Mr. Watyoka must not be removed from remand. In her ruling, Mrs. Mushure considered the defence submission that Watyoka's placement on remand for over two years without a trial date was unreasonable.
She said: "As much as this court appreciates that the charges against the accused are very serious, a remand of two years in my view, is unreasonable. This court has given the State three chances to furnish the accused person (Watyoka) with his trial date, but obviously, the State has failed. The State has now failed to bring the accused person to trial within a reasonable time. I am of the view that the interest of justice will not suffer any prejudice if the accused is removed from remand. The State has failed to serve him in the two years. It was Watyoka who actually suffered the prejudice due to the State's failure to set his matter down for trial. His (Watyoka's) preparation of the defence may have improved and the delay may have led to disproportionate delay and mental torture. Further remand is therefore refused. State to proceed by way of summons for prosecution if more evidence arises."
Watyoka was asked to collect his $150 million bail and $700 000 surety from the clerk of court.
To confirm the direct nexus between the actions of the RBZ/Gono and Watyoka's ordeal, the charges are revealing. He was facing 31 counts of fraud, 12 counts of theft, seven counts of violating the Serious Offences Act and several Exchange Control charges. Watyoka's co-accused, Gilbert Muponda, having discovered that his case had nothing to do with the bona fides pursuit of justice, decided to skip bail and is now believed to be in exile.
I believe that it is important to learn from the rich experiences that have characterized post-independence Zimbabwe if the goal of creating a new dispensation is to be realized in our life time. I have often reflected on my own personal experiences and it occurred to me that even Mugabe may not be fully aware of the destructive nature of the actions that have been taken by the RBZ/Gono in the name of national interest. I do not have any idea what Mugabe would say to a person like Watyoka who may have believed in the nation building project and registered with his colleagues an asset management company that operated in accordance with prevailing laws of the country only to wake up on 31 December 2003 and found out that he was an accused person.
The legal framework that would permit Gono to nullify the licences of asset management companies that were registered under a law passed by the Parliament of Zimbabwe should be interrogated otherwise the difference between Gono's actions and those typically associated with dictators of which Africa has many examples would be the same. Surely, if Watyoka and company were guilty of fraud against investors and its clients, one would have expected a complaint by such interested parties rather than a Governor of the RBZ. One would have expected the injured parties to have their own remedies since an asset manager is nothing but an agent representing the interests of its principals. The return to an asset manager should ordinarily be management fees and we are not told to date how ENG ended up being a principal without the knowledge and consent of its principals. Instead we see the government being the complainant and the RBZ/Gono changing laws to create a room for intervention so that the rights of the legitimate interested parties are then subordinated to the state.
As Zimbabwe gropes for solutions to the current economic meltdown and political crisis, it is obvious that a critical evaluation of the role of the RBZ/Gono in undermining democratic institutions is undertaken and appropriate lessons be drawn from case studies like the one described above. Failure to appreciate the danger posed by individuals who have no regard of the rights of others and who do not have the patience to use Parliament as the law making body not only undermines nation building but exposes future generations to poverty. Rather than focusing the debate on regime change, it is time that we focus on the kind of governance that enables creative and enterprising people to apply their minds without fear of the state abusing their rights and using the law to persecute them.
In focusing on the actions of the RBZ/Gono one hopes that this exercise will enable anyone interested in the future of Zimbabwe to reflect on what Zimbabwe and its people urgently require if hope and confidence is to be restored. In as much as the ENG saga shows blacks in government do not need the former colonial master's help to victimize their own fellow citizens, there may not be any value in Benjamin Mkapa's much talked about intervention that appears to be premised on the belief that Zimbabwean problems are externally and colonially generated. It is my hope that in our lifetime we will reach a stage where we can openly talk about Africa's challenges and promise using real life examples without favour and prejudice.
F
By mutumwa Mawere
Board of Directors
CFX Bank
P.O.Box HG 472,
Highlands,
Harare , Zimbabwe.
15 September 2009
Gentlemen,
RE ; 309 MILLION CENTURY HOLDINGS SHARES FRAUDULENTLY CONVERTED INTOCFX BANK SHARES
Gentlemen this letter is a reminder of your Fiduciary responsibilities as Directorsof a public Company. As you are aware CFX Bank is a product of fraudulent merger of Century Bank (owned by my company ENG Capital) and a much smallerCFX Bank which somehow got naming rights on the resultant Bank.
My claim is valid and legitimate and as a result will be pursued through all available options till a logical conclusion. At this stage it is important that as Board you make a choice on whether you are prepared for a pro-longed dispute. At this stage you have a duty to inform the investing public about the nature of this claim as it has a material impact on the Banks asset base and trading capacity. Failure to do so amounts to gross negligence on your part.
As the majority shareholder I intend to exercise my fiduciary duty on behalf of myself as shareholder, founder and contributory of ENG capital to fully document and seek redress for the fraudulent transfer of shares which were used tomerge Century Bank and CFX Bank. CFX Bank was created as a result of a merger between CFX Bank and Century Bank. Century Bank was fraudulently merged with CFX Bank through the illegal and irregular transfer of 309,000,000 Century Holdings shares owned by ENG Capital and Companies owned or controlled by ENG Capital. Since this was a fraudulent and illegal transfer of ENG shares the plotters of the scheme renamed the resultant bank CFX Bank dropping the name "Century" in an effort to hide their tracks and attempt toremove any link with Century. ENG Capital owned a total of 900 Million shares in Century and the balance was transferred clandestinely to avoid detection of the fraud that was being perpetrated.
I may seek relief through the courts as a last resort. At this time it is important tonote we have observed several instances whereby the court's orders are ignored and dis-regarded and as such we will be seeking redress in jurisdictions beyond Zimbabwe. In addition we will be seeking redress jointly and severally from certain individuals and entities that are directly benefiting and seeking toaid and abet asset grab and asset looting that is now common in corporate Zimbabwe.
The shares in question have changed the ownership at the start of my claim 'with a view to evading the consequences of the litigation'.
Various transactions and Company re-organization schemes with the ultimate aim of sanitizing asset looting and illegal expropriation of our Assets. The current proposed recapitalization exercise must be viewed in the same light as it now seeks to sell our illegally transferred shares into hands of another foreign Bank which will further hide the tracks of the illegal transaction. This must be documented and stopped.
The Senior Management and Directors of CFX are co-conspirators in an elaborate scheme to defraud ENG Capital and its shareholders and contributories. They have falsely and fraudulently with others known and unknown, unlawfully, willfully, and knowingly did combine, conspire, confederate, and agree together and with each other to commit offenses against ENG Capital to commit fraud in connection with the purchase, sale and transfer of the 309,000,000 Century Holdings Ordinary shares.
Furthermore the directors of Century/ CFX provided false and misleading information to CFX's regulators, Zimbabwe investing public ,auditors and concealed from them their falsification of Century/ CFXs books and records, and manipulation of data recorded in CFXs general ledger and subsidiary ledgers. Making and causing CFX to make untrue statements of material facts and omitting to state material facts necessary in order to make the statements made. This was all done in an effort to hide the tracks of ENG Capital's controlling stake shares in Century/CFX Bank.
As a detailed background in April 2003 ENG Capital Investments acquired Century Discount Holdings from Century Financial Holdings ( A ZSE listed Financial Holdings Firm).The purchase price was Z$1.5 billion then equivalent to US$ 3 million. The purchase price was paid in full. ENG then applied to the Registrar of Banks and Financial Institutions for the change of controlling shareholder approval which approvals were denied.
After several attempts to get the underlying reasons for the denial I was informed that ' the Authorities' were not comfortable with ENG political inclination which they said remained 'unclear' in addition issue of the ENG Directors age was raised. We then tried to find out if Century Financial Holdings was in a position torefund ENG for the purchase price and to reverse the Century Discount House purchase. Century Holdings was not in a position to refund ENG.
The only recourse was that ENG had to acquire Century Financial Holdings tomitigate any potential loss of outlay on the Century Discount house acquisition. As such ENG and its associated Companies acquired a total of 52% of Century Financial Holdings making Century and ENG subsidiary.
After my arrest on fabricated charges ENG was placed into Provisional Liquidation as a way to secure the creditors. The creditors agreed to take shares held by ENG IN lieu of payment. As such the contributories, directors and lawyers and creditors agreed the shares should not be sold whilst a fair valuation was being negotiated. However we were shocked to read in the papers that a parcel of 309,000,000 Century shares belonging to ENG had been sold through a pre-fixed special bargain transaction on or about 12 May 2004. The beneficiary tothis transaction has remained a mystery even though we have reliable information as to the ultimate beneficiaries.
Within a week of this sell of shares it was announced that Century Bank will now be merged with CFX Bank and the new Bank will be called CFX Bank. It is clear the merger was a laundering transaction meant to hide and sanitize the illegal and irregular transfer of the shares owned by ENG.The name Century was immediately removed and the new entity rebranded CFX Bank despite the fact that Century Bank provided a majority of the assets and infrastructure of the new Bank.
The so-called merger was only arranged to hide the true nature of the illegality of the transfer of ENG shares in Century. It is clear that without the illegal and irregular share transfer the merger would not have happened and would not have made any sense ,it was therefore just done to cover the tracks of the asset grab that had taken place
Through our Lawyers Ziweni and Company we sought the identity of the buyer and also to clarify that the share sell was null and void as it had all whole marks of corruption, insider dealing and was being challenged by the beneficial owners of the shares. In addition the shares had been sold through a special bargain and not an open market transparent transaction. The shares were sold for an unrealistic amount of Z$ 3 billion when ENG Capital had acquired the same shares for at least Z$35 billion. This resulted in the prejudice of Z$ 32 billion toENG Capital Creditors and Contributories/Shareholders. As such ENG Capital contributories were not fairly and justly paid for the value of the shares held by ENG Capital. Its this discrepancy that I want resolved and close the matter so that the Institution and My self can each focus on our future without any litigation or dispute lingering on.
We also asked the Zimbabwe Stock Exchange to investigate and stop the share transfer. However due to the general prevailing atmosphere and fear tochallenge 'authorities ' no one was willing to assist us to stop or challenge this illegal and irregular transfer of the shares to an ' unidentified' buyer believed tobe a group of senior political figures. In this instance the Zimbabwe Stock Exchange did not act properly and prudently in defending and safeguarding shareholder interests. Given that we had raised a legitimate concern the share transfer should not have been permitted.
The redress I seek will not in anyway affect the Bank employees and staff. The claim arises out of acts carried out about 5 years ago and subsequent other schemes and transactions meant to sanitize an illegal act. Clearly I have waited for 5 years hoping the plotters, CFX Management, Shareholders will seek to do the right thing and at least acknowledge this act and make amends as a way forward and ensure that the Bank can settle any such claims. I hope your judgement will not be clouded by the illusion that this claim will some how disappear or you can avoid being held accountable by the current unstable and unpredictable environment in Zimbabwe.
For the sake of transparency I am copying this letter to the following ;
Minister of Finance Zimbabwe - Hon Tendai Biti
Reserve Bank of Zimbabwe Governor ' Dr Gono
Minister of Justice - Hon Patrick Chinamasa
Zimbabwe Stock Exchange CEO ' Mr Emmanuel Munyukwi
Yours Faithfully,
Gilbert Muponda
Toronto ,Canada
1-416-841-5542
Email : gilbert@gilbertmuponda.com
Skype ID: gilbert.muponda
The Managing Director
Credit Suisse - Holder of 40% in Finance Bank Zambia
One Cabot Square
London E14, 4QJ
UK
Dear Sir,
RE ; CREDIT SUISSE/ FINANCE BANK ZAMBIA INVESTMENT IN CFX BANK ZIMBABWE OWNERSHIP WRANGLE AND DISPUTE
I am notifying you as a major shareholder in Finance Bank of Zambia which is seeking to make an investment in CFX BANK ZIMBABWE. According to recent press reports Credit Suisse will finance this transaction. CFX BANK/Century Bank was unlawfully and illegally seized from my Company by the Government of Zimbabwe using various means and schemes. The proposed investment by Credit Suisse through Finance Bank of Zambia represents a blatantly transaction and money laundering act meant to hide the tracks of the preceding illegal seizure ofmy asset (CFX BANK) by the Zimbabwe Government using various illegal and cruel means. For this reason it is not a wise investment by Credit Suisse and Finance Bank Zambia as legal action is pending and in process to reclaim the stolen assets which are now being sanitized through various disposals and "investments".
Credit Suisse and Finance Bank Zambia are trying to buy an Asset (CFX Bank) which was looted and expropriated from me and my Company. This is not right and must not be allowed to happen. Credit Suisse is exposing itself to serious reputation risk as this ownership wrangle is definitely going to drag its name and brand into asset looting and expropriation that is currently going on in Zimbabwe.
Through notice of this letter should Credit Suisse through its associate and subsidiary Finance Bank Zambia choose to continue to Finance an illegal and money laundering transaction it will become party to the pending litigation and be exposed to the attendant reputation risk.
You are receiving this letter as notification of the course of action spearheaded on behalf of my company ENG CAPITAL (PVT) LTD (ENG) and its directors in our effort to recover at least 309 000 000 (million) and up to 900,000,000 (Nine hundred Million), Century Bank shares fraudulently converted into CFX Bank shares. The fraud was masked as a merger between Century Bank and CFX Bank but after the merger Century name was dropped to cover the tracks of the fraud. The dispute was triggered by the special bargain sale of 309,000,000 shares but the total shares owned by ENG were 900,000,000 the balance was transferred in peace meal fashion to avoid detection of the fraud and transaction laundering that was being perpetrated.
This is an on going effort to hold responsible those who looted assets and are now trying launder their loot. All efforts are being made to pursue available legal channels in multi-jurisdictions to ensure that the individuals and entities responsible are held accountable for their actions. Please be guided accordingly.
At all times relevant to this document ENG was a corporation organized under the laws of the Republic of Zimbabwe with its head office in Harare and be advised that I was unlawfully separated from my business by the RBZ with the connivance of theCFX directors.
The shares in question have changed the ownership at the start of my claim "with a view to evading the consequences of the litigation".
Various transactions and Company re-organization schemes with the ultimate aim of sanitizing asset looting and illegal expropriation of our Assets.
It is important that your Organization avoids being a conduit to a money and asset laundering scheme.
The current and preceding Directors of CFX with a view to concealing the true owners of shares in Century Bank later converted to CFX Bank and entered into a secret arrangement with the Governor of the RBZ, whereby the latter acquired the shares, obtained a specification order for all ENG directors thereon, brought the Century Bank shares to sale under execution and purchased the shares for a new company CFX Bank, organized later in which the RBZ Governor has a large interest through nominees.
The allotment of shares to the GOZ in the new CFX Bank is proportionate to those held by ENG in Century Bank and the CFX directors agreed with the RBZ Governor not reveal this understanding to the other shareholders.
As the majority shareholder I intend to exercise my fiduciary duty on behalf of ENG by calling upon all shareholders of CFX for an Extra-Ordinary General Meeting (EGM) within 90 days to discuss this matter.
ENG and its directors have established a prima facie case against CFX Limited and intend to appoint a forensic auditor, whose mandate shall be to determine the true nature of CFX's shares.
With this letter I serve you notice of ENG's intentions to seek relief through the courts should this matter not be resolved amicably.
Century bank was a public company listed on the ZSE.
The directors of CFX are co-conspirators in an elaborate scheme to defraud ENG. They have falsely and fraudulently with others known and unknown, unlawfully, willfully, and knowingly did combine, conspire, confederate, and agree together and with each other to commit offenses against ENG to commit fraud in connection with the purchase and sale of securities issued.
Furthermore the directors of CFX provided false and misleading information toCFX's auditors and concealed from them their falsification of CFX's books and records, and manipulation of data recorded in CFX's general ledger and subsidiary ledgers. making and causing CFX to make untrue statements of material facts and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading
For the foregoing reasons, your Proposed investment in CFX /Century Bank Zimbabwe, the bank ownership transfer is subject to an on going dispute .This transaction may expose your Bank to high reputational risk as the dispute may entangle your Organization as the Rightful owners of CFX /Century Bank seek toreclaim their stolen shares and Bank.
As a detailed background in April 2003 ENG Capital Investments acquired Century Discount Holdings from Century Financial Holdings ( A ZSE listed Financial Holdings Firm).The purchase price was Z$1.5 billion then equivalent to US$ 3 million. The purchase price was paid in full. ENG then applied to the Registrar of Banks and Financial Institutions for the change of controlling shareholder approval which approvals were denied.
After several attempts to get the underlying reasons for the denial I was informed that " the Authorities" were not comfortable with ENG political inclination which they said remained "unclear" in addition issue of the ENG Directors age was raised. We then tried to find out if Century Financial Holdings was in a position to refund ENG for the purchase price and to reverse the Century Discount House purchase. Century Holdings was not in a position to refund ENG.
The only recourse was that ENG had to acquire Century Financial Holdings tomitigate any potential loss of outlay on the Century Discount house acquisition. As such ENG and its associated Companies acquired a total of 52% of Century Financial Holdings making Century and ENG subsidiary.
After my arrest on fabricated charges ENG was placed into Provisional Liquidation as a way to secure the creditors. The creditors agreed to take shares held by ENG IN lieu of payment. As such the contributories, directors and lawyers and creditors agreed the shares should not be sold whilst a fair valuation was being negotiated. However we were shocked to read in the papers that a parcel of 309,000,000 Century shares belonging to ENG had been sold through a pre-fixed special bargain transaction on or about 12 May 2004. The beneficiary to this transaction has remained a mystery even though we have reliable information as to the probable ultimate beneficiaries.
Within a week of this sell of shares it was announced that Century Bank will now be merged with CFX Bank and the new Bank will be called CFX Bank. It is clear the merger was a laundering transaction meant to hide and sanitize the illegal and irregular transfer of the shares owned by ENG.The name Century was immediately removed and the new entity rebranded CFX Bank despite the fact that Century Bank provided a majority of the assets and infrastructure of the new Bank.
The so-called merger was only arranged to hide the true nature of the illegality of the transfer of ENG shares in Century. It is clear that without the illegal and irregular share transfer the merger would not have happened and would not have made any sense ,it was therefore just done to cover the tracks of the asset grab that had taken place
Through our Lawyers Ziweni and Company we sought the identity of the buyer and also to clarify that the share sell was null and void as it had all whole marks of corruption, insider dealing and was being challenged by the beneficial owners of the shares. In addition the shares had been sold through a special bargain and not an open market transparent transaction. The shares were sold for an unrealistic amount of Z$ 3 billion when ENG had acquired the same shares for at least Z$35 billion. This resulted in the prejudice of Z$ 32 billion to ENG Creditors and Contributories/Shareholders. As such ENG contributories were not fairly and justly paid for the value of the shares held by ENG. Its this discrepancy that I want resolved and close the matter so that the Institution and My self can each focus on our future without any litigation or dispute lingering on.
We also asked the Zimbabwe Stock Exchange to investigate and stop the share transfer. However due to the general prevailing atmosphere and fear to challenge "authorities " no one was willing to assist us to stop or challenge this illegal and irregular transfer of the shares to an " unidentified" buyer believed to be a group of senior political figures. In this instance the Zimbabwe Stock Exchange did not act properly and prudently in defending and safeguarding shareholder interests. Given that we had raised a legitimate concern the share transfer should not have been permitted.
Attached is a copy of a recent letter to the Zimbabwean Minister of Finance seeking his assistance to resolve the matter. Should this matter not be resolved amicably I am seeking to pursue all legal options till justice is served .
For the sake of transparency I am copying this letter to the following ;
Finance Bank Zambia - Managing Director
Minister of Finance Zimbabwe
Reserve Bank of Zimbabwe Governor - Dr Gono
Minister of Justice Zimabwe - Hon Patrick Chinamasa
Zimbabwe Stock Exchange CEO - Mr Emmanuel Munyukwi
CFX BANK Board of Directors
POSB
MSASA NOMINEES
Zimbabwe Parliament -Budget, Finance and Investment Promotion Members Below
Hon Zhanda , Hon. Beremauro, Hon. Bhebhe A, Hon. Chinyadza, Hon. Cross, Hon. Khumalo ,M Hon. Madzimure, Hon. Mashakada, Hon. Matshalaga, Hon. Mudiwa, Hon. Muguti, Hon. Mukanduri, Hon. Ndava, Hon. Nyaude. Committee Clerk- Mr Ratsakatika
As indicated above I hope we can quickly come to conclusion on the matter as a pro-longed dispute may not be in anyone's interest.
Yours Faithfully,
Gilbert Muponda
Toronto ,Canada
1-416-841-5542
1-647-994-5542
Email - gilbert@gilbertmuponda.com
Skype ID - gilbert.muponda
The Managing Director
Credit Suisse - Holder of 40% in Finance Bank Zambia
One Cabot Square
London E14, 4QJ
UK
4 September 2009
Dear Sir,
RE ; CREDIT SUISSE/ FINANCE BANK ZAMBIA INVESTMENT IN CFX BANK ZIMBABWE OWNERSHIP WRANGLE AND DISPUTE
I am notifying you as a major shareholder in Finance Bank of Zambia which is seeking tomake an investment in CFX BANK ZIMBABWE. According to recent press reports Credit Suisse will finance this transaction. CFX BANK/Century Bank was unlawfully and illegally seized from my Company by the Government of Zimbabwe using various means and schemes. The proposed investment by Credit Suisse through Finance Bank of Zambia represents a blatantly transaction and money laundering act meant to hide the tracks of the preceding illegal seizure of my asset (CFX BANK) by the Zimbabwe Government using various illegal and cruel means. For this reason it is not a wise investment by Credit Suisse and Finance Bank Zambia as legal action is pending and in process to reclaim the stolen assets which are now being sanitized through various disposals and "investments".
Credit Suisse and Finance Bank Zambia are trying to buy an Asset (CFX Bank) which was looted and expropriated from me and my Company. This is not right and must not be allowed to happen. Credit Suisse is exposing itself to serious reputation risk as this ownership wrangle is definitely going to drag its name and brand into asset looting and expropriation that is currently going on in Zimbabwe.
Through notice of this letter should Credit Suisse through its associate and subsidiary Finance Bank Zambia choose to continue to Finance an illegal and money laundering transaction it will become party to the pending litigation and be exposed to the attendant reputation risk.
You are receiving this letter as notification of the course of action spearheaded on behalf of my company ENG CAPITAL (PVT) LTD (ENG) and its directors in our effort to recover at least 309 000 000 (million) and up to 900,000,000 (Nine hundred Million), Century Bank shares fraudulently converted into CFX Bank shares. The fraud was masked as a merger between Century Bank and CFX Bank but after the merger Century name was dropped to cover the tracks of the fraud. The dispute was triggered by the special bargain sale of 309,000,000 shares but the total shares owned by ENG were 900,000,000 the balance was transferred in peace meal fashion to avoid detection of the fraud and transaction laundering that was being perpetrated.
This is an on going effort to hold responsible those who looted assets and are now trying launder their loot. All efforts are being made to pursue available legal channels in multi-jurisdictions to ensure that the individuals and entities responsible are held accountable for their actions. Please be guided accordingly.
At all times relevant to this document ENG was a corporation organized under the laws of the Republic of Zimbabwe with its head office in Harare and be advised that I was unlawfully separated from my business by the RBZ with the connivance of the CFXdirectors.
The shares in question have changed the ownership at the start of my claim "with a viewto evading the consequences of the litigation".
Various transactions and Company re-organization schemes with the ultimate aim of sanitizing asset looting and illegal expropriation of our Assets.
It is important that your Organization avoids being a conduit to a money and asset laundering scheme.
The current and preceding Directors of CFX with a view to concealing the true owners of shares in Century Bank later converted to CFX Bank and entered into a secret arrangement with the Governor of the RBZ, whereby the latter acquired the shares, obtained a specification order for all ENG directors thereon, brought the Century Bank shares to sale under execution and purchased the shares for a new company CFX Bank, organized later in which the RBZ Governor has a large interest through nominees.
The allotment of shares to the GOZ in the new CFX Bank is proportionate to those held by ENG in Century Bank and the CFX directors agreed with the RBZ Governor not reveal this understanding to the other shareholders.
As the majority shareholder I intend to exercise my fiduciary duty on behalf of ENG by calling upon all shareholders of CFX for an Extra-Ordinary General Meeting (EGM) within 90 days to discuss this matter.
ENG and its directors have established a prima facie case against CFX Limited and intend to appoint a forensic auditor, whose mandate shall be to determine the true nature of CFX's shares.
With this letter I serve you notice of ENG's intentions to seek relief through the courts should this matter not be resolved amicably.
Century bank was a public company listed on the ZSE.
The directors of CFX are co-conspirators in an elaborate scheme to defraud ENG. They have falsely and fraudulently with others known and unknown, unlawfully, willfully, and knowingly did combine, conspire, confederate, and agree together and with each other tocommit offenses against ENG to commit fraud in connection with the purchase and sale of securities issued.
Furthermore the directors of CFX provided false and misleading information to CFX's auditors and concealed from them their falsification of CFX's books and records, and manipulation of data recorded in CFX's general ledger and subsidiary ledgers. making and causing CFX to make untrue statements of material facts and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading
For the foregoing reasons, your Proposed investment in CFX /Century Bank Zimbabwe, the bank ownership transfer is subject to an on going dispute .This transaction may expose your Bank to high reputational risk as the dispute may entangle your Organization as the Rightful owners of CFX /Century Bank seek to reclaim their stolen shares and Bank.
As a detailed background in April 2003 ENG Capital Investments acquired Century Discount Holdings from Century Financial Holdings ( A ZSE listed Financial Holdings Firm).The purchase price was Z$1.5 billion then equivalent to US$ 3 million. The purchase price was paid in full. ENG then applied to the Registrar of Banks and Financial Institutions for the change of controlling shareholder approval which approvals were denied.
After several attempts to get the underlying reasons for the denial I was informed that " the Authorities" were not comfortable with ENG political inclination which they said remained "unclear" in addition issue of the ENG Directors age was raised. We then triedto find out if Century Financial Holdings was in a position to refund ENG for the purchase price and to reverse the Century Discount House purchase. Century Holdings was not in a position to refund ENG.
The only recourse was that ENG had to acquire Century Financial Holdings to mitigate any potential loss of outlay on the Century Discount house acquisition. As such ENG and its associated Companies acquired a total of 52% of Century Financial Holdings making Century and ENG subsidiary.
After my arrest on fabricated charges ENG was placed into Provisional Liquidation as a way to secure the creditors. The creditors agreed to take shares held by ENG IN lieu of payment. As such the contributories, directors and lawyers and creditors agreed the shares should not be sold whilst a fair valuation was being negotiated. However we were shocked to read in the papers that a parcel of 309,000,000 Century shares belonging toENG had been sold through a pre-fixed special bargain transaction on or about 12 May 2004. The beneficiary to this transaction has remained a mystery even though we have reliable information as to the probable ultimate beneficiaries.
Within a week of this sell of shares it was announced that Century Bank will now be merged with CFX Bank and the new Bank will be called CFX Bank. It is clear the merger was a laundering transaction meant to hide and sanitize the illegal and irregular transfer of the shares owned by ENG.The name Century was immediately removed and the new entity rebranded CFX Bank despite the fact that Century Bank provided a majority of the assets and infrastructure of the new Bank.
The so-called merger was only arranged to hide the true nature of the illegality of the transfer of ENG shares in Century. It is clear that without the illegal and irregular share transfer the merger would not have happened and would not have made any sense ,it was therefore just done to cover the tracks of the asset grab that had taken place
Through our Lawyers Ziweni and Company we sought the identity of the buyer and alsoto clarify that the share sell was null and void as it had all whole marks of corruption, insider dealing and was being challenged by the beneficial owners of the shares. In addition the shares had been sold through a special bargain and not an open market transparent transaction. The shares were sold for an unrealistic amount of Z$ 3 billion when ENG had acquired the same shares for at least Z$35 billion. This resulted in the prejudice of Z$ 32 billion to ENG Creditors and Contributories/Shareholders. As such ENG contributories were not fairly and justly paid for the value of the shares held by ENG. Its this discrepancy that I want resolved and close the matter so that the Institution and My self can each focus on our future without any litigation or dispute lingering on.
We also asked the Zimbabwe Stock Exchange to investigate and stop the share transfer. However due to the general prevailing atmosphere and fear to challenge "authorities " no one was willing to assist us to stop or challenge this illegal and irregular transfer of the shares to an " unidentified" buyer believed to be a group of senior political figures. In this instance the Zimbabwe Stock Exchange did not act properly and prudently in defending and safeguarding shareholder interests. Given that we had raised a legitimate concern the share transfer should not have been permitted.
Attached is a copy of a recent letter to the Zimbabwean Minister of Finance seeking his assistance to resolve the matter. Should this matter not be resolved amicably I am seeking to pursue all legal options till justice is served .
For the sake of transparency I am copying this letter to the following ;
Finance Bank Zambia - Managing Director
Minister of Finance Zimbabwe
Reserve Bank of Zimbabwe Governor - Dr Gono
Minister of Justice Zimabwe - Hon Patrick Chinamasa
Zimbabwe Stock Exchange CEO - Mr Emmanuel Munyukwi
CFX BANK Board of Directors
POSB
MSASA NOMINEES
Zimbabwe Parliament -Budget, Finance and Investment Promotion Members Below
Hon Zhanda , Hon. Beremauro, Hon. Bhebhe A, Hon. Chinyadza, Hon. Cross, Hon. Khumalo ,M Hon. Madzimure, Hon. Mashakada, Hon. Matshalaga, Hon. Mudiwa, Hon. Muguti, Hon. Mukanduri, Hon. Ndava, Hon. Nyaude. Committee Clerk- Mr Ratsakatika
As indicated above I hope we can quickly come to conclusion on the matter as a pro-longed dispute may not be in anyone's interest.
Yours Faithfully,
Gilbert Muponda
Toronto ,Canada
CFX /CENTURY BANK INVESTMENT BY FINANCE BANK ZAMBIA
The Managing Director
Finance Bank Zambia
Plot 226 Finsbury House, Buteko Avenue, Ndola Zambia
RE ; CFX/CENTURY BANK INVESTMENT BY FINANCE BANK ZAMBIA
I refer to your Proposed investment in CFX /Century Bank Zimbabwe. The bank ownership transfer is subject to an on going dispute .This transaction may expose your Bank to high reputational risk as the dispute may entangle your Organization as the Rightful owners of CFX /Century Bank seek to reclaim their stolen shares and Bank.
As a detailed background in April 2003 ENG Capital Investments acquired Century Discount Holdings from Century Financial Holdings ( A ZSE listed Financial Holdings Firm).The purchase price was Z$1.5 billion then equivalent to US$ 3 million. The purchase price was paid in full. ENG then applied to the Registrar of Banks and Financial Institutions for the change of controlling shareholder approval which approvals were denied.
After several attempts to get the underlying reasons for the denial I was informed that " the Authorities" were not comfortable with ENG political inclination which they said remained "unclear" in addition issue of the ENG Directors age was raised. We then triedto find out if Century Financial Holdings was in a position to refund ENG for the purchase price and to reverse the Century Discount House purchase. Century Holdings was not in a position to refund ENG.
The only recourse was that ENG had to acquire Century Financial Holdings to mitigate any potential loss of outlay on the Century Discount house acquisition. As such ENG and its associated Companies acquired a total of 52% of Century Financial Holdings making Century and ENG subsidiary.
After my arrest on fabricated charges ENG was placed into Provisional Liquidation as a way to secure the creditors. The creditors agreed to take shares held by ENG IN lieu of payment. As such the contributories, directors and lawyers and creditors agreed the shares should not be sold whilst a fair valuation was being negotiated. However we were shocked to read in the papers that a parcel of 309,000,000 Century shares belonging toENG had been sold through a pre-fixed special bargain transaction on or about 12 May 2004. The beneficiary to this transaction have remained a mystery even though we have reliable information as to the probable ultimate beneficiaries.
Within a week of this sell of shares it was announced that Century Bank will now be merged with CFX Bank and the new Bank will be called CFX Bank. It is clear the merger was a laundering transaction meant to hide and sanitize the illegal and irregular transfer of the shares owned by ENG. The name Century was immediately removed and the new entity rebranded CFX Bank despite the fact that Century Bank provided a majority of the assets and infrastructure of the new Bank.
The so-called merger was only arranged to hide the true nature of the illegality of the transfer of ENG shares in Century. It is clear that without the illegal and irregular share transfer the merger would not have happened and would not have made any sense ,it was therefore just done to cover the tracks of the asset grab that had taken place
Through our Lawyers Ziweni and Company we sought the identity of the buyer and alsoto clarify that the share sell was null and void as it had all whole marks of corruption, insider dealing and was being challenged by the beneficial owners of the shares. In addition the shares had been sold through a special bargain and not an open market transparent transaction. The shares were sold for an unrealistic amount of Z$ 3 billion when ENG had acquired the same shares for at least Z$35 billion.
This resulted in the prejudice of Z$ 32 billion to ENG Creditors and Contributories/Shareholders. As such ENG contributories were not fairly and justly paid for the value of the shares held by ENG. Its this discrepancy that I want resolved and close the matter so that the Institution and My self can each focus on our future without any litigation or dispute lingering on.
We also asked the Zimbabwe Stock Exchange to investigate and stop the share transfer. However due to the general prevailing atmosphere and fear to challenge "authorities " no one was willing to assist us to stop or challenge this illegal and irregular transfer of the shares to an " unidentified" buyer believed to be a group of senior political figures. In this instance the Zimbabwe Stock Exchange did not act properly and prudently in defending and safeguarding shareholder interests. Given that we had raised a legitimate concern the share transfer should not have been permitted.
As a way forward I propose that Century Bank /CFX Bank and other ENG Assets be returned to ENG Shareholders/ Contributories or a fair compensation be worked out and paid out to the ENG Shareholders and Contributories to settle the dispute. I further request your assistance on the return the return of my Primary residence 17 Chishawasha Road,Chishawasha Hills,Umwinsdale. Harare. This illegal seizure left me destitute and homeless.
Below is a copy of a recent letter to the Zimbabwean Minister of Finance seeking his assistance to resolve the matter. Should this matter not be resolved amicably I am seeking to pursue all legal options till justice is served .
For the sake of transparency I am copying this letter to the following ;
Minister of Finance Zimbabwe
Reserve Bank of Zimbabwe Governor - Dr Gono
Minister of Justice - Hon Patrick Chinamasa
Zimbabwe Stock Exchange CEO - Mr Emmanuel Munyukwi
CFX BANK Board of Directors
Budget, Finance and Investment Promotion
Hon. Beremauro, Hon. Bhebhe A, Hon. Chinyadza, Hon. Cross, Hon. Khumalo ,M Hon. Madzimure, Hon. Mashakada, Hon. Matshalaga, Hon. Mudiwa, Hon. Muguti, Hon. Mukanduri, Hon. Ndava, Hon. Nyaude. Committee Clerk- Mr Ratsakatika
As indicated above I hope we can quickly come to conclusion on the matter as a pro-longed dispute may not be in anyone's interest.
Yours Faithfully,
Gilbert Muponda
1-416-841-5542
1-647-994-5542
The Shareholders
Interfin Holdings Limited
15th Floor, NSSA Building
Cnr Sam Nujoma St/Julius Nyerere Way
HARARE
4 November 2009
Attention: Mr. R. Njanike
Dear Gentlemen and Lady,
RE ; PROPOSED INTERFIN ACQUISITION OF MY BANK - CENTURY/CFX BANK LIMITED
I refer to various media reports which suggest Interfin Holdings Limited plans to acquire a 51% stake in My Bank Century/CFX Bank. Further reference is made to the letter frommy lawyers Gutu and Chikowero Attorneys at Law dated 2 November 2009 and my letterof yesterday to your Board of Directors. The purpose of this letter is to warn Interfin Financial Holdings Limited not to interpose itself in the CFX ownership dispute as you may regret that transaction. Interfin should not meddle in this as the consequences will be dire.
(1) Current CFX Bank lawyers a flaunting around their "legal opinion" as fact. Firstly CFXBank lawyers are compromised as they can not provide an Independent legal opinion in a matter in which they have an interest since they are representing the respondent. They have a conflict of interest and should have recused themselves in providing the legal opinion. So I guess they just provided this "legal opinion" to earn fees knowing fully well that their opinion in this matter wasn't even worth the piece of paper it was written on.
(2) Their purported legal opinion is rather misplaced and misdirected in as much as it seeks to analyze current ENG legal status .The current status is immaterial since we are trying to correct fraud and theft which resulted in ENG being incapacitated.
(3) Further CFX Bank Lawyers are assuming that since I remain specified in Zimbabwe therefore I have no capacity to vigorously pursue this matter. This is fallacious and ill advised .I hope the same lawyers are aware that Financial markets do not operate in a vacuum and in the bigger scheme of things Financial markets are not controlled from Harare. As indicated previously no stone will be left unturned till justice prevails on this matter. This means all legal options are on the table and legal action is being persuading in several jurisdictions.
(4) CFX Bank lawyers are further peddling a tired lie that the shares were being sold topay off ENG creditors. This totally ignores where the matter started and how it developed into a crisis. The original and official allegation was that ENG Capital was a brief case Company which had no meaningful assets. ENG and Myself were further demonized and smeared that the only visible assets acquired were cars. Shouldn't CFX Lawyers be addressing this anomaly. How can a brief case Company own 309 million shares in a Bank. How come the public was not clearly told that ENG owned a Bank .Why was there over focus on cars which made up less than 1% of ENG Capital base? Assuming for one moment that ENG had real problems ,Why wasn't it well advertised that even though ENG was having problems it owned a Bank and bidders would be invited to take over that Bank and pay a fair price? Why was the disposal being done clandestinely and under cover of darkness?
(5) ENG was sufficiently liquid and solvent to meet its liabilities but despite all this its cheques were being bounced and dishonored. This act alone of bouncing and dishonoring cheques of a Financial Institution creates panic and impression of a Bankrupt Institution. It must be noted First Mutual Life and National Discount House being ENG counter parties in fact sued Zimbank for irregularly dishonoring ENG cheques at a time the ENG account was fully funded and had sufficient funds to meet its liabilities. This clearly confirms a well calculated campaign to close down ENG and grab its assets.
(6) I am sure you were told that ENG CAPITAL had many cars, and these cars were the only assets that ENG had. The correct and accurate facts are that ENG was a Group of Companies which Companies had Directors, Managers and employees and the cars were for the use of these members of staff who ran the various companies which made up ENG CAPITAL.
(7) ENG Capital group had a market value of US$ 175 million, just before the RBZ descended on the Institution.
Below is a brief ENG Group Structure ;
ENG HOLDINGS GROUP STRUCTURE
- SUBSIDIARIES
- ENG CAPITAL INVESTMENTS PVT LTD
- ENG ASSET MANAGEMENT PVT LTD
- ENG REAL ESTATE
- ENG NOMINEES PVT LTD
- ENG PRIVATE EQUITY (PVT) LTD
- ENG CAPITAL ADVISORY SERVICES
- ENG STRUCTURED FINANCE
ADDITIONAL MAJOR ASSETS OWNED
- Century Bank Holdings (now CFX bank)
- Leasing Company of Zimbabwe, Century Asset Managers)
- Century Discount House
- Hybri Micro-Finance Institution
- Care Insurance PVT LTD
- RestCel Insurance PVT LTD
- Amalgamated Health Services (Harare West Hospital )
- 15% of OK Zimbabwe Limited
- 15% of Zimplow Holdings Limited
- 20% Medtech Holdings Limited
- Hornet Re-Insurance PVT LTD
- Pearl Pension Fund Management
- 25 % Clan Holdings Limited
- 25 % Zimbabwe News Papers Group - Zimpapers Limited
- Allied Conveyor Belts PVT LTD
- River Drilling PVT LTD
- Real Estate including (Anastasia Court, Belgravia House, Thaine Building)
- Various Listed ZSE Listed shares
- Treasury Bills
- GMB Bills
- Cargill Commercial Paper
- $ 4 billion - Alliance Capital Debenture (representing 123 million First Mutual Life shares)
- 23 Million First Mutual Life shares
This is relevant as it proves beyond any doubt that ENG was a solid Group of Companies. It was targeted out greed by plotters including senior politicians who wantedto loot and grab assets.
(8) This mêlée was nothing more than a ploy to infringe upon my citizenship rights and strip me of my assets; a well orchestrated political game to deny perceived enemies of the governor financial freedom.
(9) My battle against civil asset forfeiture is one for the preservation of freedom and property. This is an important area as Zimbabwe seeks to portray an image of a stable state with the rule of law and private property rights are protected and preserved.
(10) All facts indicate to a grand miscarriage of Justice.
(11) A miscarriage of justice occurred as ENG and its directors now bear the burden of proving their innocence. The preponderance of evidence, which means that the RBZ only must make a better case - however slight, than the property owner - ENG.
(12) The 309 Century Financial Holdings Limited Million shares in question were sold through Fidelity Stock brokers on or around May 13, 2004. Within the same week an announcement was then made that CFX Bank was taking over Century Holdings. The shares were sold to Gono's reported consortium for Z$2,9 billion when ENG had spent $35 billion to accumulate the shares, thereby prejudicing ENG, Creditors, Investors and contributories of at least Z$32,1 billion.
(13) As ENG Co-founder, Contributory and Shareholder, I wrote to the Zimbabwe Stock Exchange Chief Executive Mr Emmanuel Munyukwi asking for an investigation because we had agreed with the majority of creditors that the shares should not be sold but rather swapped with creditors and investors instead of selling them at an unreasonable price. But the 309 million Century /CFX Financial Holdings million shares were somehow clandestinely sold and that transaction enabled CFX Bank to take over Century Holdings Limited.
(14) This allowed the reverse listing of CFX Bank on to the Zimbabwe Stock Exchange. Without those 309 million Century Holdings Limited million shares owned by ENG theCFX/Century merger would have never happened. Gono and his proxies became the new controlling shareholder of the new merged bank. Is this by design or accident? Gono then forced out the Mr Sean Maloney who had helped to put together the transaction. Mr Sean Maloney had to leave the country under unclear circumstances . Part of the same shares snatched From ENG were later transferred to Premier Bank Financial Holdings which is reportedly owned by Governor Gono .There has generally been shuffling of shares which is normally associated with covering tracks of an illegal and irregular transaction.
(15) ENG directors and contributories asked the high court to set aside the sale of the shares and the matter action is still before the courts in Harare. We asked Zimbabwe Stock Exchange Committee to investigate. They refused. We asked the brokers for the identity of the buyer of our shares. They refused. The brokers indicated they were under serious pressure from individuals they couldn't identify to maintain total secrecy on the identity of the buyer. Within a few days of raising the challenge of the CFX/Century shares Justice Minister specified me without affording me a hearing or an enquiry as required by the Constitution of Zimbabwe . The was specification at the instigation of senior politicians who were eyeing assets held by ENG including Century/CFX Bank. The specification was meant to harass, cow, intimidate and silence me from raising further complaints and challenges regarding ENG assets specifically these 309 million shares in Century/CFX Financial Holdings.
(16) Since the ENG shares in Century /CFX Bank Financial Holdings were irregularly transferred the Bank ownership remains in dispute. The ENG shareholders and contributories filed and sought a high court order to stop the transfer of the shares until the dispute had been resolved . The shares were still clandestinely transferred despite the pending high court application to resolve the dispute . After filing for this order MyLawyer the late Oscar Ziweni was also specified by the Minister of Justice and threatened ,harassed and intimidated until he went into hiding. However the point remains ENG Founders, Shareholders and Contributories still lay claim to these shares and stake in Century/ CFX BANK which were looted by Senior Government officials.
In conclusion Interfin Holdings Limited should consider itself warned. Interfin should stay clear of CFX Bank until this matter is resolved. There are entities and individuals in Zimbabwe who erroneously believe they are above the law. They have the mistaken belief they can grab, loot, steal assets and get away with it. In the process they try to launder their loot through various disposals and restructurings such as the ones that were done at Century/CFX Bank. This is being fully documented. CFX Bank has had more than 5 Managing Directors in a space of 2 years .This shows the instability brought about by being a disputed asset whilst the looters try to pull " strings" from behind the scenes.
For the sake of transparency I am copying this letter to the following ;
Minister of Finance Zimbabwe
Reserve Bank of Zimbabwe Governor - Dr Gono
Zimbabwe Stock Exchange CEO - Mr Emmanuel Munyukwi
CFX BANK Board of Directors
Zimbabwe Parliament -Budget, Finance and Investment Promotion Members Below
Hon Zhanda , Hon. Beremauro, Hon. Bhebhe A, Hon. Chinyadza, Hon. Cross, Hon. Khumalo ,M Hon. Madzimure, Hon. Mashakada, Hon. Matshalaga, Hon. Mudiwa, Hon. Muguti, Hon. Mukanduri, Hon. Ndava, Hon. Nyaude. Committee Clerk- Mr Ratsakatika
My full contact details are below should you need any clarification.
Yours Faithfully,
Gilbert Muponda
Toronto ,Canada
Letter to Interfin Shareholders
The Shareholders
Interfin Holdings Limited
15th Floor, NSSA Building
Cnr Sam Nujoma St/Julius Nyerere Way
HARARE
4 November 2009
Attention: Mr. R. Njanike
Dear Gentlemen and Lady,
RE ; PROPOSED INTERFIN ACQUISITION OF MY BANK - CENTURY/CFX BANK LIMITED
I refer to various media reports which suggest Interfin Holdings Limited plans to acquire a 51% stake in My Bank Century/CFX Bank. Further reference is made to the letter frommy lawyers Gutu and Chikowero Attorneys at Law dated 2 November 2009 and my letterof yesterday to your Board of Directors. The purpose of this letter is to warn Interfin Financial Holdings Limited not to interpose itself in the CFX ownership dispute as you may regret that transaction. Interfin should not meddle in this as the consequences will be dire.
(1) Current CFX Bank lawyers a flaunting around their "legal opinion" as fact. Firstly CFXBank lawyers are compromised as they can not provide an Independent legal opinion in a matter in which they have an interest since they are representing the respondent. They have a conflict of interest and should have recused themselves in providing the legal opinion. So I guess they just provided this "legal opinion" to earn fees knowing fully well that their opinion in this matter wasn't even worth the piece of paper it was written on.
(2) Their purported legal opinion is rather misplaced and misdirected in as much as it seeks to analyze current ENG legal status .The current status is immaterial since we are trying to correct fraud and theft which resulted in ENG being incapacitated.
(3) Further CFX Bank Lawyers are assuming that since I remain specified in Zimbabwe therefore I have no capacity to vigorously pursue this matter. This is fallacious and ill advised .I hope the same lawyers are aware that Financial markets do not operate in a vacuum and in the bigger scheme of things Financial markets are not controlled from Harare. As indicated previously no stone will be left unturned till justice prevails on this matter. This means all legal options are on the table and legal action is being persuading in several jurisdictions.
(4) CFX Bank lawyers are further peddling a tired lie that the shares were being sold topay off ENG creditors. This totally ignores where the matter started and how it developed into a crisis. The original and official allegation was that ENG Capital was a brief case Company which had no meaningful assets. ENG and Myself were further demonized and smeared that the only visible assets acquired were cars. Shouldn't CFX Lawyers be addressing this anomaly. How can a brief case Company own 309 million shares in a Bank. How come the public was not clearly told that ENG owned a Bank .Why was there over focus on cars which made up less than 1% of ENG Capital base? Assuming for one moment that ENG had real problems ,Why wasn't it well advertised that even though ENG was having problems it owned a Bank and bidders would be invited to take over that Bank and pay a fair price? Why was the disposal being done clandestinely and under cover of darkness?
(5) ENG was sufficiently liquid and solvent to meet its liabilities but despite all this its cheques were being bounced and dishonored. This act alone of bouncing and dishonoring cheques of a Financial Institution creates panic and impression of a Bankrupt Institution. It must be noted First Mutual Life and National Discount House being ENG counter parties in fact sued Zimbank for irregularly dishonoring ENG cheques at a time the ENG account was fully funded and had sufficient funds to meet its liabilities. This clearly confirms a well calculated campaign to close down ENG and grab its assets.
(6) I am sure you were told that ENG CAPITAL had many cars, and these cars were the only assets that ENG had. The correct and accurate facts are that ENG was a Group of Companies which Companies had Directors, Managers and employees and the cars were for the use of these members of staff who ran the various companies which made up ENG CAPITAL.
(7) ENG Capital group had a market value of US$ 175 million, just before the RBZ descended on the Institution.
Below is a brief ENG Group Structure ;
ENG HOLDINGS GROUP STRUCTURE
- SUBSIDIARIES
- ENG CAPITAL INVESTMENTS PVT LTD
- ENG ASSET MANAGEMENT PVT LTD
- ENG REAL ESTATE
- ENG NOMINEES PVT LTD
- ENG PRIVATE EQUITY (PVT) LTD
- ENG CAPITAL ADVISORY SERVICES
- ENG STRUCTURED FINANCE
ADDITIONAL MAJOR ASSETS OWNED
- Century Bank Holdings (now CFX bank)
- Leasing Company of Zimbabwe, Century Asset Managers)
- Century Discount House
- Hybri Micro-Finance Institution
- Care Insurance PVT LTD
- RestCel Insurance PVT LTD
- Amalgamated Health Services (Harare West Hospital )
- 15% of OK Zimbabwe Limited
- 15% of Zimplow Holdings Limited
- 20% Medtech Holdings Limited
- Hornet Re-Insurance PVT LTD
- Pearl Pension Fund Management
- 25 % Clan Holdings Limited
- 25 % Zimbabwe News Papers Group - Zimpapers Limited
- Allied Conveyor Belts PVT LTD
- River Drilling PVT LTD
- Real Estate including (Anastasia Court, Belgravia House, Thaine Building)
- Various Listed ZSE Listed shares
- Treasury Bills
- GMB Bills
- Cargill Commercial Paper
- $ 4 billion - Alliance Capital Debenture (representing 123 million First Mutual Life shares)
- 23 Million First Mutual Life shares
This is relevant as it proves beyond any doubt that ENG was a solid Group of Companies. It was targeted out greed by plotters including senior politicians who wantedto loot and grab assets.
(8) This mêlée was nothing more than a ploy to infringe upon my citizenship rights and strip me of my assets; a well orchestrated political game to deny perceived enemies of the governor financial freedom.
(9) My battle against civil asset forfeiture is one for the preservation of freedom and property. This is an important area as Zimbabwe seeks to portray an image of a stable state with the rule of law and private property rights are protected and preserved.
(10) All facts indicate to a grand miscarriage of Justice.
(11) A miscarriage of justice occurred as ENG and its directors now bear the burden of proving their innocence. The preponderance of evidence, which means that the RBZ only must make a better case - however slight, than the property owner - ENG.
(12) The 309 Century Financial Holdings Limited Million shares in question were sold through Fidelity Stock brokers on or around May 13, 2004. Within the same week an announcement was then made that CFX Bank was taking over Century Holdings. The shares were sold to Gono's reported consortium for Z$2,9 billion when ENG had spent $35 billion to accumulate the shares, thereby prejudicing ENG, Creditors, Investors and contributories of at least Z$32,1 billion.
(13) As ENG Co-founder, Contributory and Shareholder, I wrote to the Zimbabwe Stock Exchange Chief Executive Mr Emmanuel Munyukwi asking for an investigation because we had agreed with the majority of creditors that the shares should not be sold but rather swapped with creditors and investors instead of selling them at an unreasonable price. But the 309 million Century /CFX Financial Holdings million shares were somehow clandestinely sold and that transaction enabled CFX Bank to take over Century Holdings Limited.
(14) This allowed the reverse listing of CFX Bank on to the Zimbabwe Stock Exchange. Without those 309 million Century Holdings Limited million shares owned by ENG theCFX/Century merger would have never happened. Gono and his proxies became the new controlling shareholder of the new merged bank. Is this by design or accident? Gono then forced out the Mr Sean Maloney who had helped to put together the transaction. Mr Sean Maloney had to leave the country under unclear circumstances . Part of the same shares snatched From ENG were later transferred to Premier Bank Financial Holdings which is reportedly owned by Governor Gono .There has generally been shuffling of shares which is normally associated with covering tracks of an illegal and irregular transaction.
(15) ENG directors and contributories asked the high court to set aside the sale of the shares and the matter action is still before the courts in Harare. We asked Zimbabwe Stock Exchange Committee to investigate. They refused. We asked the brokers for the identity of the buyer of our shares. They refused. The brokers indicated they were under serious pressure from individuals they couldn't identify to maintain total secrecy on the identity of the buyer. Within a few days of raising the challenge of the CFX/Century shares Justice Minister specified me without affording me a hearing or an enquiry as required by the Constitution of Zimbabwe . The was specification at the instigation of senior politicians who were eyeing assets held by ENG including Century/CFX Bank. The specification was meant to harass, cow, intimidate and silence me from raising further complaints and challenges regarding ENG assets specifically these 309 million shares in Century/CFX Financial Holdings.
(16) Since the ENG shares in Century /CFX Bank Financial Holdings were irregularly transferred the Bank ownership remains in dispute. The ENG shareholders and contributories filed and sought a high court order to stop the transfer of the shares until the dispute had been resolved . The shares were still clandestinely transferred despite the pending high court application to resolve the dispute . After filing for this order MyLawyer the late Oscar Ziweni was also specified by the Minister of Justice and threatened ,harassed and intimidated until he went into hiding. However the point remains ENG Founders, Shareholders and Contributories still lay claim to these shares and stake in Century/ CFX BANK which were looted by Senior Government officials.
In conclusion Interfin Holdings Limited should consider itself warned. Interfin should stay clear of CFX Bank until this matter is resolved. There are entities and individuals in Zimbabwe who erroneously believe they are above the law. They have the mistaken belief they can grab, loot, steal assets and get away with it. In the process they try to launder their loot through various disposals and restructurings such as the ones that were done at Century/CFX Bank. This is being fully documented. CFX Bank has had more than 5 Managing Directors in a space of 2 years .This shows the instability brought about by being a disputed asset whilst the looters try to pull " strings" from behind the scenes.
For the sake of transparency I am copying this letter to the following ;
Minister of Finance Zimbabwe
Reserve Bank of Zimbabwe Governor - Dr Gono
Zimbabwe Stock Exchange CEO - Mr Emmanuel Munyukwi
CFX BANK Board of Directors
Zimbabwe Parliament -Budget, Finance and Investment Promotion Members Below
Hon Zhanda , Hon. Beremauro, Hon. Bhebhe A, Hon. Chinyadza, Hon. Cross, Hon. Khumalo ,M Hon. Madzimure, Hon. Mashakada, Hon. Matshalaga, Hon. Mudiwa, Hon. Muguti, Hon. Mukanduri, Hon. Ndava, Hon. Nyaude. Committee Clerk- Mr Ratsakatika
My full contact details are below should you need any clarification.
Yours Faithfully,
Gilbert Muponda
Toronto ,Canada
Letter to CFX Bank Board of Directors
Board of Directors
CFX Bank
P.O.Box HG 472,
Highlands,
Harare , Zimbabwe.
15 September 2009
Gentlemen,
RE ; 309 MILLION CENTURY HOLDINGS SHARES FRAUDULENTLY CONVERTED INTO CFX BANK SHARES
Gentlemen this letter is a reminder of your Fiduciary responsibilities as Directors of public Company. As you are aware CFX Bank is a product of fraudulent merger of Century Bank (owned by my company ENG Capital) and a much smaller CFX Bank which somehow got naming rights on the resultant Bank.
My claim is valid and legitimate and as a result will be pursued through all available options till a logical conclusion. At this stage it is important that as Board you make a choice on whether you are prepared for a pro-longed dispute. At this stage you have a duty to inform the investing public about the nature of this claim as it has a material impact on the Banks asset base and trading capacity. Failure to do so amounts to gross negligence on your part.
As the majority shareholder I intend to exercise my fiduciary duty on behalf of my self as shareholder, founder and contributory of ENG capital to fully document and seek redress for the fraudulent transfer of shares which were used to merge Century Bank and CFXBank. CFX Bank was created as a result of a merger between CFX Bank and Century Bank. Century Bank was fraudulently merged with CFX Bank through the illegal and irregular transfer of 309,000,000 Century Holdings shares owned by ENG Capital and Companies owned or controlled by ENG Capital. Since this was a fraudulent and illegal transfer of ENG shares the plotters of the scheme renamed the resultant bank CFX Bank dropping the name "Century" in an effort to hide their tracks and attempt to remove any link with Century. ENG Capital owned a total of 900 Million shares in Century and the balance was transferred clandestinely to avoid detection of the fraud that was being perpetrated.
I may seek relief through the courts as a last resort. At this time it is important to note we have observed several instances whereby the court's orders are ignored and dis-regarded and as such we will be seeking redress in jurisdictions beyond Zimbabwe. In addition we will be seeking redress jointly and severally from certain individuals and entities that are directly benefiting and seeking to aid and abet asset grab and asset looting that is now common in corporate Zimbabwe.
The shares in question have changed the ownership at the start of my claim ?with a viewto evading the consequences of the litigation?.
Various transactions and Company re-organization schemes with the ultimate aim of sanitizing asset looting and illegal expropriation of our Assets. The current proposed recapitalization exercise must be viewed in the same light as it now seeks to sell our illegally transferred shares into hands of another foreign Bank which will further hide the tracks of the illegal transaction. This must be documented and stopped.
The Senior Management and Directors of CFX are co-conspirators in an elaborate scheme to defraud ENG Capital and its shareholders and contributories. They have falsely and fraudulently with others known and unknown, unlawfully, willfully, and knowingly did combine, conspire, confederate, and agree together and with each other tocommit offenses against ENG Capital to commit fraud in connection with the purchase, sale and transfer of the 309,000,000 Century Holdings Ordinary shares.
Furthermore the directors of Century/ CFX provided false and misleading information toCFX?s regulators, Zimbabwe investing public ,auditors and concealed from them their falsification of Century/ CFXs books and records, and manipulation of data recorded in CFXs general ledger and subsidiary ledgers. Making and causing CFX to make untrue statements of material facts and omitting to state material facts necessary in order tomake the statements made. This was all done in an effort to hide the tracks of ENG Capital's controlling stake shares in Century/CFX Bank.
As a detailed background in April 2003 ENG Capital Investments acquired Century Discount Holdings from Century Financial Holdings ( A ZSE listed Financial Holdings Firm).The purchase price was Z$1.5 billion then equivalent to US$ 3 million. The purchase price was paid in full. ENG then applied to the Registrar of Banks and Financial Institutions for the change of controlling shareholder approval which approvals were denied.
After several attempts to get the underlying reasons for the denial I was informed that ? the Authorities? were not comfortable with ENG political inclination which they said remained ?unclear? in addition issue of the ENG Directors age was raised. We then triedto find out if Century Financial Holdings was in a position to refund ENG for the purchase price and to reverse the Century Discount House purchase. Century Holdings was not in a position to refund ENG.
The only recourse was that ENG had to acquire Century Financial Holdings to mitigate any potential loss of outlay on the Century Discount house acquisition. As such ENG and its associated Companies acquired a total of 52% of Century Financial Holdings making Century and ENG subsidiary.
After my arrest on fabricated charges ENG was placed into Provisional Liquidation as a way to secure the creditors. The creditors agreed to take shares held by ENG IN lieu of payment. As such the contributories, directors and lawyers and creditors agreed the shares should not be sold whilst a fair valuation was being negotiated. However we were shocked to read in the papers that a parcel of 309,000,000 Century shares belonging toENG had been sold through a pre-fixed special bargain transaction on or about 12 May 2004. The beneficiary to this transaction has remained a mystery even though we have reliable information as to the ultimate beneficiaries.
Within a week of this sell of shares it was announced that Century Bank will now be merged with CFX Bank and the new Bank will be called CFX Bank. It is clear the merger was a laundering transaction meant to hide and sanitize the illegal and irregular transfer of the shares owned by ENG.The name Century was immediately removed and the new entity rebranded CFX Bank despite the fact that Century Bank provided a majority of the assets and infrastructure of the new Bank.
The so-called merger was only arranged to hide the true nature of the illegality of the transfer of ENG shares in Century. It is clear that without the illegal and irregular share transfer the merger would not have happened and would not have made any sense ,it was therefore just done to cover the tracks of the asset grab that had taken place
Through our Lawyers Ziweni and Company we sought the identity of the buyer and alsoto clarify that the share sell was null and void as it had all whole marks of corruption, insider dealing and was being challenged by the beneficial owners of the shares. In addition the shares had been sold through a special bargain and not an open market transparent transaction. The shares were sold for an unrealistic amount of Z$ 3 billion when ENG Capital had acquired the same shares for at least Z$35 billion. This resulted in the prejudice of Z$ 32 billion to ENG Capital Creditors and Contributories/Shareholders. As such ENG Capital contributories were not fairly and justly paid for the value of the shares held by ENG Capital. Its this discrepancy that I want resolved and close the matter so that the Institution and My self can each focus on our future without any litigation or dispute lingering on.
We also asked the Zimbabwe Stock Exchange to investigate and stop the share transfer. However due to the general prevailing atmosphere and fear to challenge ?authorities ? no one was willing to assist us to stop or challenge this illegal and irregular transfer of the shares to an ? unidentified? buyer believed to be a group of senior political figures. In this instance the Zimbabwe Stock Exchange did not act properly and prudently in defending and safeguarding shareholder interests. Given that we had raised a legitimate concern the share transfer should not have been permitted.
The redress I seek will not in anyway affect the Bank employees and staff. The claim arises out of acts carried out about 5 years ago and subsequent other schemes and transactions meant to sanitize an illegal act. Clearly I have waited for 5 years hoping the plotters, CFX Management, Shareholders will seek to do the right thing and at least acknowledge this act and make amends as a way forward and ensure that the Bank can settle any such claims. I hope your judgement will not be clouded by the illusion that this claim will some how disappear or you can avoid being held accountable by the current unstable and unpredictable environment in Zimbabwe.
For the sake of transparency I am copying this letter to the following ;
Minister of Finance Zimbabwe - Hon Tendai Biti
Reserve Bank of Zimbabwe Governor ? Dr Gono
Minister of Justice - Hon Patrick Chinamasa
Zimbabwe Stock Exchange CEO ? Mr Emmanuel Munyukwi
Yours Faithfully,
Gilbert Muponda
Toronto ,Canada
Letter to Newsday Editor
To the Editor
Newsday
On August 25 2010 in the Newsday publication the Chairman of Interfin Farai Rwodzi blatantly misrepresented the facts of the ongoing dispute regarding the misappropriation of 309 million Century/CFX Bank shares by Interfin. Farai Rwodzi recklessly and deceitfully caused to be published the following falsehoods, "Interfin is currently preoccupied with the thorny and cumbersome issue of post-merger consolidation and the process is fraught with challenges related to culture divergence and contingent liabilities related to labour disputes and equity claims being made against CFX.
The company last month paid Gilbert Muponda $5,3 million for equity allegedly transferred to the acquirer irregularly during the merger, but is still to reach common ground with former CFX employees, who have sued over wage arrears and severance packages."
Such prevarication through a respected publication like yours is designed to give credence to a fictitious transaction that never occurred. Neither my legal representatives nor I have received compensation of any nature from Interfin, its directors or shareholders for the 309 million Century/CFX Bank shares embezzled from Century/CFX by Interfin.
Farai Rwodzi's fraudulent misrepresentation and gross distortion of facts fails to include material information which would significantly alter the interpretation of this matter fact. He arrogantly repudiates overtures for an amicable out of court settlement and yet admits in this Newsday interview of possession of my 309 million Century Bank shares.
I would like to offer Farai Rwodzi an opportunity to attest to this claim of payment by submitting for publication to your esteemed paper, a signed copy of the settlement agreement between ourselves together with a copy of the payment cheque.
Thank you for your prompt attention to this matter.
Meikles Africa ,Interfin and CFX Bank relationship
Dear Mr Moxon,
I am an exiled Zimbabwean called Gilbert Muponda.I had several of my assets unfairly seized from me by the GOVERNMENT and people linked to the Government .The most recent being Interfin which has taken over CFX Bank which was seized from me.I note that Meikles has recently appointed Mr Farai Rwodzi onto the Board.Mr Rwodi is Founder and Director at Interfin which I am in conflict with.
The appointment of Mr Rwodzi onto the Meikles board may bring us into conflict as I seek to expose Interfin and the politicians behind it.I believe you may want to revise your relationship given the link between Interfin ,Mr RWODZI ,CFX Bank and looted assets.These matters will not disappear or just go away as we are preparing on going campaigns to expose those involved .This may jeorpadise your good name and respected brand.Below is one of the letters I wrote to Interfin explaining the basis of the dispute.I am also seeking any help you can provide in recovering my assets,
The Board of Directors
Interfin Holdings Limited
15th Floor, NSSA Building
Cnr Sam Nujoma St/Julius Nyerere Way
HARARE
3 November 2009
Attention: Mr. R. Njanike
Dear Gentlemen and Ladies,
RE ; PROPOSED INTERFIN ACQUISITION OF MY BANK - CENTURY/CFX BANK LIMITED
I refer to various media reports which suggest Interfin Holdings Limited plans to acquire
a controlling stake in My Bank Century/CFX Bank. I further refer to the letter from my
lawyers Gutu and Chikowero Attorneys at Law dated 2 November 2009. I trust my Lawyers
will effectively deal with this matter however I felt personally obliged to write to you
as I believe I personally know you and several members of your senior staff and Directors.
Current CFX Bank lawyers are now peddling a totally morally corrupt and bankrupt argument that the shares were sold to pay off ENG Capital Holdings (ENG) Creditors and depositors. This can not go unchallenged. As you will recall when the RBZ victimized ENG the allegation was that ENG was bankrupt and it had no meaningful assets. It was further alleged that ENG only had expensive cars. The state media misled the public and investors into believing that ENG was a shelf Company involved in speculation and no meaningful investments had been made by ENG. It is unfortunate that a once reputable firm is now tryingto peddle a falsehood created by the plotters and state media in an effort to justify and sanitize fraud committed against me and ENG.
The real facts clearly show the ENG was solid and owned real assets such as Century/CFX Bank. It is clear ENG held highly valuable assets beyond the cars that were being over hyped in state media to divert public attention whilst ENG real assets such as Century/CFX Bank were being looted and grabbed by senior politicians and high ranking Government officials.
If ENG as already proven owned Century/CFX Bank then how could ENG have been bankrupt and how could investing in buying a Bank be classified as speculation? Is it not clear that ENG was targeted due togreedy of certain individuals who wanted to loot and grab ENG's Assets such as Century/CFX Bank? ENG was targeted in a grand fraud scheme to strip me and ENG of various assets including Century/CFX Bank. The allegations of speculation and other financial irregularities were created by the plotters using state media and other hijacked state Institutions to mask the fraud and theft which was being committed against me and ENG.
At this stage it is not important to look at ENG legal status. What is in question here is CFX Bank's legal status and how CFX Bank snatched ENG shares.CFX Bank needs to show an Independently verified and audit trail showing how it took over Century Bank .Who bought the 309 million shares? Why were the shares sold through a special bargain? What favors were involved? Why is it that within the same week of the 309 million shares being sold it was then immediately announced that Century Bank would be merged with CFX Bank? Is this not a clear case of corruption and insider trading? Why didn't the RBZ and ZSE stop and investigate such clear insider trading and corruption?
1 - It is widely reported that Finance Bank Zambia and their Swiss Financiers have
developed cold feet on their previous intention on investing in CFX/Century Bank after
receiving the details of my claim. This is important as it confirms the legitimacy and
seriousness of the Century/CFX Bank ownership dispute .First its confirms that Finance
Bank and their Swiss Financiers have done their own back ground investigations plus due
diligence and have satisfied themselves that my claim is real, justified, serious and
legitimate.
Secondly they have correctly assessed that reputation risk of investing in a
looted asset is too grave in this modern day where money and transaction laundering are
serious International crimes. Thirdly they have been correctly been advised of the
drastic and dramatic consequences of investing in an asset where a crime has been
committed in dispossessing the legitimate owner of the asset.
The question then is if
Finance Bank and their Swiss Financiers have seen that the risk is too high how can
Interfin which is way smaller in terms of resources can try to assume risk which the
Worlds second largest re-insurer is not prepared to take?
2 - You are receiving this letter as notification of the course of action spearheaded
on behalf of myself, my company ENG CAPITAL (PVT) LTD (ENG) and its directors in our effort to
recover at least 309 000,000 (309 million) and up to 900,000,000 (Nine hundred Million),
Century Bank shares fraudulently converted into CFX Bank shares. The fraud was masked as
a merger between Century Bank and CFX Bank but after the merger Century name was dropped
to cover the tracks of the fraud. The dispute was triggered by the special bargain sale
of 309,000,000 shares but the total shares owned by ENG were 900,000,000 the balance was
transferred in peace-meal fashion to avoid detection of the fraud and transaction
laundering that was being perpetrated.
3 - As you may-be aware I am currently living in exile in Toronto, Canada. I am a
founder, shareholder and Contributory of ENG Capital (PVT) LTD .I am sure you are fully
aware of the back ground to this letter as various subsidiaries of my Company ENG were a
counter parties to your Bank. It is well known that I was the first person arrested in
the 2003-2004 so-called anti graft campaign by Gideon Gono immediately after he took over
at the RBZ on fabricated charges and allegations.
4 - In the process of being dispossessed on my assets and ENG assets I was arrested,
abused, beaten, harassed, tortured, denied food, medicine, water and sleep all in an
effort to get me to confess to false charges whilst my assets were being stripped from
me. In addition I was forced to sleep with dead bodies and share blankets with people
suffering from infectious diseases as a way to weaken my resolve and coerce me to
surrender my fight to protect my Company and my assets.
5 - Several other Banking Executives were later haunted, arrested, intimidated and
others forced into exile. Their Banks and other Financial Institutions were closed,
expropriated or taken over by Government or senior politicians. The affected individuals
include Messrs Nicholas Vingirai - Intermarket Financial Holdings, William Nyemba - Trust
Banking Corporation, Jeff Muzwimbi - Royal Bank and Dr Mthuli Ncube - Barbican Bank and
myself Gilbert Muponda of ENG Capital and Century Bank now CFX Bank. Mr Raymond Njanike I
believe you should be more aware of some of the exact facts relating to these case since
you were at the time a Managing Director of Trust Discount House which was part of the
affect Institutions.
6 - It is now a well known fact that the allegations raised against all the above
business people were a smokescreen to divert public attention and also strip these
individuals of the Businesses and assets. These business people have maintained their
innocence from day one despite being demonized , scandalized and criminalized. All of
them are at various stages of reclaiming their Banks and assets which were taken under a
dark cloud under the guise of anti-graft hyped campaign. This is relevant back ground to
give a general understanding of the circumstances giving rise to this claim and dispute.
7 - These allegations were a smokescreen created to allow the grabbing of my assets and
those owned by my Company ENG Capital (PVT) LTD. In the process of being dispossessed on
my assets and ENG assets I was arrested, abused, beaten, harassed, tortured, denied food,
medicine, water and sleep all in an effort to get me to confess to false charges whilst
my assets were being stripped from me. In addition I was forced to sleep with dead bodies
and share blankets with people suffering from infectious diseases as a way to weaken my
resolve and coerce me to surrender my fight to protect my Company and my assets. It is
only natural justice that assets seized under such conditions be returned or compensation
be paid and those responsible held accountable
8 - CFX BANK/Century Bank was unlawfully and illegally seized from my Company by the
Government of Zimbabwe using various means and schemes. The proposed investment by
Interfin Holdings Limited represents a blatantly transaction and money laundering act
meant to hide the tracks of the preceding illegal seizure of my asset (CFX BANK) by the
Zimbabwe Government using various illegal and cruel means. For this reason it is not a
wise investment by Interfin Holdings Limited as legal action is pending and in process to
reclaim the stolen assets which are now being sanitized through various disposals and
investments?.
9 - Interfin Holdings Limited are trying to buy an Asset (CFX Bank) which was looted
and expropriated from me and my Company. This is not right and must not be allowed to
happen. Interfin Holdings Limited is exposing itself to serious reputation risk as this
ownership wrangle is definitely going to drag its name and brand into asset looting and
expropriation that is currently going on in Zimbabwe. In addition the Directors and
Senior Management of Interfin are exposing themselves to serious personal risk which may
affect their ability to do business and legitimate transactions outside Zimbabwe. In
addition this risk may become contagion and affect every other entity or individual
associated with Interfin Holdings Limited.
10 - Through notice of this letter should Interfin Holdings Limited choose to continue
to Finance an illegal and money laundering transaction it will become party to the
pending litigation and be exposed to the attendant reputation risk.
11 - This is an on going effort to hold responsible those who looted assets and are now
trying launder their loot. All efforts are being made to pursue available legal channels
in multi-jurisdictions to ensure that the individuals and entities responsible are held
accountable for their actions. Please be guided accordingly as Interfin can easily be enjoined in the proceedings.
12 - At all times relevant to this document ENG was a corporation organized under the
laws of the Republic of Zimbabwe with its head office in Harare and be advised that I was
unlawfully separated from my business by the RBZ with the connivance of the CFX
directors.
13 - The shares in question have changed the ownership at the start of my claim ?with a
view to evading the consequences of the litigation?.
14 - Various transactions and Company re-organization schemes with the ultimate aim of
sanitizing asset looting and illegal expropriation of our Assets.
15 - It is important that your Organization avoids being a conduit to a money and asset
laundering scheme.
16 - The current and preceding Directors of CFX with a view to concealing the true
owners of shares in Century Bank later converted to CFX Bank and entered into a secret
arrangement with the Governor of the RBZ, whereby the latter acquired the shares,
obtained a specification order for all ENG directors thereon, brought the Century Bank
shares to sale under execution and purchased the shares for a new company CFX Bank,
organized later in which the RBZ Governor has a large interest through nominees.
17 - The allotment of shares to the GOZ in the new CFX Bank is proportionate to those
held by ENG in Century Bank and the CFX directors agreed with the RBZ Governor not reveal
this understanding to the other shareholders.
18 - ENG, Shareholders and Contributories and its directors have established a prima
facie case against Century/CFX Limited and intend to appoint a forensic auditor, whose
mandate shall be to determine the true nature of CFX?s shares.
19 - Century bank was a public company listed on the ZSE. This means the records of the
various ownership changes are available and Interfin Holdings Limited need to do a proper
Shareholder Audit Trail to verify the ENG ownership claim. In particular Interfin
Holdings Limited should ask for the Century/CFX Bank audited share register as at 31
December 2003 and 12 May 2004.This will confirm that indeed Century/CFX Bank was owned
and controlled by me and ENG Capital.
20 - The directors of Century/CFX are co-conspirators in an elaborate scheme to defraud
ENG. They have falsely and fraudulently with others known and unknown, unlawfully,
willfully, and knowingly did combine, conspire, confederate, and agree together and with
each other to commit offenses against ENG to commit fraud in connection with the purchase
and sale of securities issued.
21 - Furthermore the directors of Century/CFX provided false and misleading information
to CFX?s auditors and concealed from them their falsification of CFX?s books and records,
and manipulation of data recorded in CFX?s general ledger and subsidiary ledgers. making
and causing CFX to make untrue statements of material facts and omitting to state
material facts necessary in order to make the statements made, in the light of the
circumstances under which they were made, not misleading
22 - For the foregoing reasons, your Proposed investment in CFX /Century Bank Zimbabwe,
the bank ownership transfer is subject to an on going dispute .This transaction will
expose your Bank to high reputation risk as the dispute may entangle your Organization as
the Rightful owners of CFX /Century Bank seek to reclaim their stolen shares and Bank. At
this stage it is also important to note that any dispute will entangle all Directors and
Major shareholders in their personal capacity.
23 - I have proven that Century/CFX Bank was owned by me and ENG Capital. I have
further proven that Century/CFX Bank was unlawfully, illegally and irregularly taken from
me through fraud, false imprisonment, torture, harassment. It therefore follows that any
transaction undertaken to sanitize such illegal actions in grabbing someone's assets
amounts to transactions laundering. And money Laundering. I am sure your organization
does not wish to be party to such serious international crime. As Bankers I am sure you
are aware of the serious consequences of trying to launder transactions and sanitize
illegal transactions. The risk involved is not worth it as Finance Bank Zambia and their
Swiss Partners have concluded.
24 - As a detailed background in April 2003 ENG Capital Investments acquired Century
Discount Holdings from Century Financial Holdings ( A ZSE listed Financial Holdings
Firm).The purchase price was Z$1.5 billion then equivalent to US$ 3 million. The purchase
price was paid in full. ENG then applied to the Registrar of Banks and Financial
Institutions for the change of controlling shareholder approval which approvals were
denied.
25 - After several attempts to get the underlying reasons for the denial I was informed
that ? the Authorities were not comfortable with ENG political inclination which they
said remained unclear in addition issue of the ENG Directors age was raised. We then
tried to find out if Century Financial Holdings was in a position to refund ENG for the
purchase price and to reverse the Century Discount House purchase. Century Holdings was
not in a position to refund ENG.
26 - The only recourse was that ENG had to acquire Century Financial Holdings to
mitigate any potential loss of outlay on the Century Discount house acquisition. As such
ENG and its associated Companies acquired a total of 52% of Century Financial Holdings
making Century an ENG subsidiary. The audited shareholder register of Century/CFX Bank as
at 31 December 2003 and 12 May 2004 will confirm this material fact.
27 - After my arrest on fabricated charges ENG was placed into Provisional Liquidation
as a way to secure the creditors. The creditors agreed to take shares held by ENG IN lieu
of payment. As such the contributories, directors and lawyers and creditors agreed the
shares should not be sold whilst a fair valuation was being negotiated. However we were
shocked to read in the papers that a parcel of 309,000,000 Century shares belonging to
ENG had been sold through a pre-fixed special bargain transaction on or about 12 May
2004. The beneficiary to this transaction has remained a mystery even though we have
reliable information as to the probable ultimate beneficiaries.
28 - Within a week of this sale of shares it was announced that Century Bank will now
be merged with CFX Bank and the new Bank will be called CFX Bank. It is clear the merger
was a laundering transaction meant to hide and sanitize the illegal and irregular
transfer of the shares owned by ENG. The name Century was immediately removed and the new
entity rebranded CFX Bank despite the fact that Century Bank provided a majority of the
assets and infrastructure of the new Bank.
29 - The so-called merger was only arranged to hide the true nature of the illegality
of the transfer of ENG shares in Century. It is clear that without the illegal and
irregular share transfer the merger would not have happened and would not have made any
sense ,it was therefore just done to cover the tracks of the asset grab that had taken
place.
Through our Lawyers Ziweni and Company we sought the identity of the buyer and also to
clarify that the share sell was null and void as it had all whole marks of corruption,
insider dealing and was being challenged by the beneficial owners of the shares. In
addition the shares had been sold through a special bargain and not an open market
transparent transaction. We also asked the Zimbabwe Stock Exchange to investigate and
stop the share transfer.
However due to the general prevailing atmosphere and fear to
challenge authorities no one was willing to assist us to stop or challenge this
illegal and irregular transfer of the shares to an unidentified buyer believed to be a
group of senior political figures. In this instance the Zimbabwe Stock Exchange did not
act properly and prudently in defending and safeguarding shareholder interests. Given
that we had raised a legitimate concern the share transfer should not have been
permitted.
This matter is well documented and for easy of reference please refer to the following websites which have been specifically created to document this ownership dispute
(a) - http://www.cfxbank.com
(b) - http://www.cfxbank.blogspot.com
Given the above it is clear Interfin should not interpose itself in an ongoing
ownership dispute which has been in the courts for the last 5 years. Should it be necessary measures are already underway to create another website to deal with Interfin and document .
For the sake of transparency I am copying this letter to the following ;
Minister of Finance Zimbabwe - Hon T.L Biti
Reserve Bank of Zimbabwe Governor - Dr Gono
Zimbabwe Stock Exchange CEO - Mr Emmanuel Munyukwi
CFX BANK Board of Directors
Zimbabwe Parliament -Budget, Finance and Investment Promotion Members Below
Hon Zhanda , Hon. Beremauro, Hon. Bhebhe A, Hon. Chinyadza, Hon. Cross, Hon. Khumalo ,M
Hon. Madzimure, Hon. Mashakada, Hon. Matshalaga, Hon. Mudiwa, Hon. Muguti, Hon.
Mukanduri, Hon. Ndava, Hon. Nyaude. Committee Clerk- Mr Ratsakatika
My full contact details are below should you need any clarification.
Yours Faithfully,
Gilbert Muponda
My Letter to Interfin warning them not to buy CFX Bank
The Shareholders
Interfin Holdings Limited
15th Floor, NSSA Building
Cnr Sam Nujoma St/Julius Nyerere Way
HARARE
4 November 2009
Attention: Mr. R. Njanike
Dear Gentlemen and Lady,
RE: PROPOSED INTERFIN ACQUISITION OF MY BANK - CENTURY/CFX BANK LIMITED
I refer to various media reports which suggest Interfin Holdings Limited plans toacquire a 51% stake in My Bank Century/CFX Bank. Further reference is made tothe letter from my lawyers Gutu and Chikowero Attorneys at Law dated 2 November 2009 and my letter of yesterday to your Board of Directors. The purpose of this letter is to warn Interfin Financial Holdings Limited not tointerpose itself in the CFX ownership dispute as you may regret that transaction. Interfin should not meddle in this as the consequences will be dire. Finance Bank of Zambia and its Swiss Financiers pulled out of this transaction because of the unresolved ownership dispute. How can Interfin ignore this?
(1) Current CFX Bank lawyers a flaunting around their legal opinion as fact. Firstly CFX Bank lawyers are compromised as they cannot provide an Independent legal opinion in a matter in which they have an interest since they are representing the respondent. They have a conflict of interest and should have refused themselves in providing the legal opinion. It appears as though they just provided this legal opinion to earn fees knowing fully well that their opinion in this matter was not even worth the piece of paper it was written on.
(2) Their purported legal opinion is rather misplaced and misdirected in as much as it seeks to analyze current ENG legal status .The current status is immaterial since we are trying to correct fraud and theft which resulted in ENG being incapacitated.
(3) Further CFX Bank Lawyers are assuming that since I remain specified in Zimbabwe therefore I have no capacity to vigorously pursue this matter. This is fallacious and ill advised .I hope the same lawyers are aware that Financial Markets do not operate in a vacuum and in the bigger scheme of things Financial Markets are not controlled from Harare. As indicated previously no stone will be left unturned till justice prevails on this matter. This means all legal options are on the table and legal action is being pursued in several jurisdictions.
(4) CFX Bank lawyers are further peddling a tired lie that the shares were being sold to pay off ENG creditors. This totally ignores where the matter started and how it developed into a crisis. The original and official allegation was that ENG Capital was a brief case Company which had no meaningful assets. ENG and I were further demonized and smeared, that the only visible assets acquired were cars. Shouldn't CFX Lawyers be addressing this anomaly? How can a brief case Company own 309 million shares in a Bank? How come the public was not clearly told that ENG owned a Bank .Why was there over focus on cars which made up less than 1% of ENG's Capital base? Assuming for one moment that ENG had real problems, why wasn't it well advertised that even though ENG was having problems it owned a Bank and bidders would be invited to take over that Bank and pay a fair price? Why was the disposal being done clandestinely and under cover of darkness?
(5) ENG was sufficiently liquid and solvent to meet its liabilities but despite all this its cheques were being bounced and dishonored. This act alone of bouncing and dishonoring cheques of a Financial Institution creates panic and an impression of a Bankrupt Institution. It must be noted that First Mutual Life and National Discount House, being ENG counter parties in fact sued Zimbank for irregularly dishonoring ENG cheques at a time when the ENG account was fully funded and had sufficient funds to meet its liabilities. This clearly confirms a well calculated campaign to close down ENG and grab its assets.
(6) I am sure you were told that ENG CAPITAL had many cars, and these cars were the only assets that ENG had. The correct and accurate facts are that ENG was a Group of Companies of which the Companies had Directors, Managers and employees and the cars were for the use of these members of staff who ran the various companies which made up ENG CAPITAL.
(7) ENG Capital group had a market value of US$ 175 million, just before the RBZ descended on the Institution.
Below is a brief ENG Group Structure;
ENG HOLDINGS GROUP STRUCTURE
- SUBSIDIARIES
- ENG CAPITAL INVESTMENTS PVT LTD
- ENG ASSET MANAGEMENT PVT LTD
- ENG REAL ESTATE
- ENG NOMINEES PVT LTD
- ENG PRIVATE EQUITY (PVT) LTD
- ENG CAPITAL ADVISORY SERVICES
- ENG STRUCTURED FINANCE
ADDITIONAL MAJOR ASSETS OWNED
- Century Bank Holdings (now CFX bank)
- Leasing Company of Zimbabwe, (Century Asset Managers)
- Century Discount House
- Hybri Micro-Finance Institution
- Care Insurance PVT LTD
- RestCel Insurance PVT LTD
- Amalgamated Health Services (Harare West Hospital )
- 15% of OK Zimbabwe Limited
- 15% of Zimplow Holdings Limited
- 20% Medtech Holdings Limited
- Hornet Re-Insurance PVT LTD
- Pearl Pension Fund Management
- 25 % Clan Holdings Limited
- 25 % Zimbabwe News Papers Group - Zimpapers Limited
- Allied Conveyor Belts PVT LTD
- River Drilling PVT LTD
- Real Estate including (Anastasia Court, Belgravia House, Thaine Building)
- Various Listed ZSE Listed shares
- Treasury Bills
- GMB Bills
- Cargill Commercial Paper
- $ 4 billion - Alliance Capital Debenture (representing 123 million First Mutual Life shares)
- 23 Million First Mutual Life shares
This is relevant as it proves beyond any doubt that ENG was a solid Group of Companies. It was targeted out of greed by plotters including Senior Politicians who wanted to loot and grab assets.
(8 This mail was nothing more than a ploy to infringe upon my citizenship rights and strip me of my assets; a well orchestrated political game to deny perceived enemies of Senior Politician's financial freedom.
(9) My battle against civil asset forfeiture is one for the preservation of freedom and property. This is an important area as Zimbabwe seeks to portray an image of a stable state with the rule of law and private property rights are protected and preserved.
(10) All facts indicate to a grand miscarriage of Justice.
(11) A miscarriage of justice occurred as ENG and its directors now bear the burden of proving their innocence. The preponderance of evidence, which means that the RBZ only must make a better case - however slight, than the property owner ENG.
(12) The 309 Century Financial Holdings Limited Million shares in question were sold through Fidelity Stock brokers on or around May 13, 2004. Within the same week an announcement was then made that CFX Bank was taking over Century Holdings. The shares were sold to a Senior Politician's reported consortium for Z$2,9 billion when ENG had spent $35 billion to accumulate the shares, thereby prejudicing ENG, Creditors, Investors and contributories of at least Z$32,1 billion.
(13) As ENG Co-founder, Contributory and Shareholder, I wrote to the Zimbabwe Stock Exchange Chief Executive Mr. Emmanuel Munyukwi asking for an investigation because we had agreed with the majority of creditors that the shares should not be sold but rather swapped with creditors and investors instead of selling them at an unreasonable price. But the 309 million Century /CFX Financial Holdings million shares were somehow clandestinely sold and that transaction enabled CFX Bank to take over Century Holdings Limited.
(14) This allowed the reverse listing of CFX Bank on to the Zimbabwe Stock Exchange. Without those 309 million Century Holdings Limited million shares owned by ENG the CFX/Century merger would have never happened. Senior politicians and their proxies became the new controlling shareholder of the new merged bank. Is this by design or accident? Senior politicians then forced out Mr. Sean Maloney who had helped to put together the transaction. Mr. Sean Maloney had to leave the country under unclear circumstances. Parts of the same shares snatched From ENG were later transferred to Premier Bank Financial Holdings which is reportedly owned by a Senior Politician. There has generally been shuffling of shares which is normally associated with covering tracks of an illegal and irregular transaction.
(15) ENG directors and contributories asked the high court to set aside the sale of the shares and the matter action is still before the courts in Harare. We asked Zimbabwe Stock Exchange Committee to investigate. They refused. We asked the brokers for the identity of the buyer of our shares. They refused. The brokers indicated they were under serious pressure from individuals they couldn't identifyto maintain total secrecy on the identity of the buyer. Within a few days of raising the challenge of the CFX/Century shares Justice Minister specified me without affording me a hearing or an enquiry as required by the Constitution of Zimbabwe. There was specification at the instigation of senior politicians who were eyeing assets held by ENG including Century/CFX Bank. The specification was meant to harass, cow, intimidate and silence me from raising further complaints and challenges regarding ENG assets specifically these 309 million shares in Century/CFX Financial Holdings.
(16) Since the ENG shares in Century /CFX Bank Financial Holdings were irregularly transferred the Bank ownership remains in dispute. The ENG shareholders and contributories filed and sought a high court order to stop the transfer of the shares until the dispute had been resolved. The shares were still clandestinely transferred despite the pending high court application to resolve the dispute. After filing for this order My Lawyer the late Oscar Ziweni was also specified by the Minister of Justice and threatened, harassed and intimidated until he went into hiding. However the point remains ENG Founders, Shareholders and Contributories still lay claim to these shares and stake in Century/ CFX BANK which were looted by Senior Government officials.
In conclusion Interfin Holdings Limited should consider itself warned. Interfin should stay clear of CFX Bank until this matter is resolved. There are entities and individuals in Zimbabwe who erroneously believe they are above the law. They have the mistaken belief they can grab, loot, steal assets and get away with it. In the process they try to launder their loot through various disposals and restructurings such as the ones that were done at Century/CFX Bank. This is fully documented. CFX Bank has had more than 5 Managing Directors in a space of 2 years .This shows the instability brought about by being a disputed asset whilst the looters try to pull strings from behind the scenes.
For the sake of transparency I am copying this letter to the following;
Minister of Finance Zimbabwe
Reserve Bank of Zimbabwe Governor Dr Gono
Zimbabwe Stock Exchange CEO Mr. Emmanuel Munyukwi
CFX BANK Board of Directors
Zimbabwe Parliament -Budget, Finance and Investment Promotion Members Below
Hon Zhanda , Hon. Beremauro, Hon. Bhebhe A, Hon. Chinyadza, Hon. Cross, Hon. Khumalo ,M Hon. Madzimure, Hon. Mashakada, Hon. Matshalaga, Hon. Mudiwa, Hon. Muguti, Hon. Mukanduri, Hon. Ndava, Hon. Nyaude. Committee Clerk- Mr Ratsakatika
My full contact details are below should you need any clarification.
Yours Faithfully,
Gilbert Muponda
Farai Rwodzi ,CFX/Interfin Bank Zimbabwe & Muponda ownership dispute Part 2 of 5
Mr Farai Rwodzi and Interfin Bank Holdings seem to be flip -flopping at an alarming rate for people who are supposed to be running a Bank. First Mr Rwodzi claimed to have paid me US 5.3 million ( http://www.newsday.co.zw/article/2010-08-25-interfin-acquires-13-of-starafrica ).When I denied ever receiving this money Interfin then changed their story to say They will never pay me a cent http://www.newsday.co.zw/article/2010-09-26-interfin-rejects-mupondas-53m-claim .Investors and the public are likely to ask which is which Mr Rwodzi?
These confused and contradictory statements only shows Interfin and Mr Rwodzi are fully aware of the legitimacy of my claim but simply do not know how to proceed for the fear of losing face or admission of guilty.This is part 2 of 5 the genesis of the dispute by proving beyond any doubt that I have always maintained my 309 million Century Bank Holdings shares were illegally and irregularly converted into CFX shares then into Interfin Bank Holdings shares.
The movement from Century Bank to CFX Bank to CFX/Interfin Banking Corporation clearly shows there is a problem and attempts to conceal and deceive on the initial fraudulent transfer of the Century Shares into CFX Bank then Intern Bank. For that reason we have demanded to know the full identity of the individual or entity who initially "bought" the 309 million shares for which I am demanding US 15.4 million made up of the US 5 cents per share multiplied by 309 million shares.
Why is the identity of this buyer such a big mystry.Buyers of 309 million Bank shares are normally proud to be known for such a material acquisition. Why is this buyer still hidden after 6 years of the transaction. What is being hidden by blocking the identity of the "buyer" of the 309 million shares in dispute?
Our legitimate claim to compensation of $ 15.4 million for the 309 million shares is "indisputable".Farai Rwodzi and Interfin's refusal to pay compensation is compensation is groundless and is absolutely not acceptable. Everybody knows that Farai Rwodzi and Interfin built their business on cutting corners and grabbing assets, but the current refusal to pay compensation will make that explicit.
In part 1 of these series I revealed the copy of my original founding affidavit for High Court Case HC-6244-04 blocking the attempted sale and transfer of 309 million shares which triggered this dispute. In this part I reveal the supporting affidavit by my business partner Nyasha Watyoka supporting my motion for High Court Case HC-6244-04.I believe who ever gave Mr Rwodzi the legal opinion on this transaction totally ignored the case HC-6244-04 and its implications of making the share transfer null,void and fraudulent. Below is a copy of the original affidavit signed by my Business Partner Nyasha Watyoka
Farai Rwodzi ,CFX/Interfin Bank Zimbabwe & Muponda ownership dispute Part 1 of 5
Farai Rwodzi and Interfin Bank seem to be living in dream land a world of make belief. Its most unfortunate they are behaving like high school boys with bravado instead of seeking a solution. According to this article Interfin claim that I am claiming US $ 5.3 million http://www.newsday.co.zw/article/2010-09-26-interfin-rejects-mupondas-53m-claim .
They further allege my media campaign constitute malicious cyber attacks .My campaign is perfectly legal and legitimate and will go on till Interfin and Farai Rwodzi pay what they owe me and my Company ENG Capital. For the record I am not claiming $ 5.3 million. I am claiming $ 15,4 million being 309 million shares multiplied by the value per share of 5 cents to give a total of US $15.4 million. Farai Rwodzi is the one who falsely claimed to have paid me $ 5.3 million and I denied ever receiving. My lawyers Gutu and Chikowero wrote to both Interfin and Newsday Newspaper to deny and ask for a retraction but Interfin choose to reply through press reports.
Interfin further claim I authorized the sale of the shares. They conveniently forget that I in fact challenged the transfer of the shares through high court case HC 6244-04 .My co-director Nyasha Watyoka supported this motion to block the sale or transfer of the shares.
I understand Interfin have been trying to create the impression that we do not have a legitimate claim or we are using media whilst avoiding court. That is not correct this matter is still before the High Court in Harare case # HC-6244-04 filed in late May 2004 by my then lawyer Mr Oscar Ziweni. Note respondent # 6 Century Holdings is now Interfin Holdings Limited who assumed assets and liabilities of Century Holdings when they took over CFX Bank which itself had taken over the original Century Bank .
My former lawyer Mr Ziweni died mysteriously and suspiciously after being stalked, intimidated, harassed, detained by various members of the state security sections for representing me in this case. At one stage he was forced into hiding when threatened with fabricated charges just meant to scare him off from representing me. This left me with no legal representation at that stage and I was also then specified leaving me in danger as my lawyer had died mysteriously and I feared for my life as well so I fled Zimbabwe. However the court case still remains because it was duly filed and assigned through normal high court procedure.
I have attached My original founding affidavit filed with Case HC-6244-04 opposing the transfer of 309 million shares which triggered this dispute with Mr Rwodzi and Interfin Financial Holdings.I will publish some of the original documents which show that the 309 million shares were illegally, corruptly and irregularly transferred. This is part 1 of 5
Farai Rwodzi and CFX/Interfin Bank Zimbabwe are misguided
Farai Rwodzi and Interfin Bank Zimbabwe are trying to blame me for their arrogance and incompetence as demonstrated by their illegal and irregular take over of my Bank Century/CFX. The problem is that Mr Rwodzi is used to rely on political muscle and force to achieve deals but unfortunately this situation requires more than that.
In their latest instalment they allege I am scaring International partner and investors. I totally refudiate ( borrowing Sarah Palin English) these false and malicious allegations. Interfin are simply looking for a scape goat for their poor judgement in controversially taking over my Bank Century/CFX . They failed to do a proper due diligence even after my lawyers Gutu and Chikowero Attorneys at Law had written to them warning them of the on going ownership wrangle.
In their effort to launder the and hide the fraudulent take over of Century Bank they mistakenly thought they could just take Century/CFX Bank assets including is valuable Moneygram International Franchise and rebrand them as Interfin Banking Corporation.
I have done the responsible thing and advised MoneyGram International to review their relationship with Interfin due to the possibility of reputational risk which is highly likely given how Interfin have decided to handle this through the media. Firstly they falsely claimed to have paid me US$ 5.3 million then suddenly vowed that they will never pay me a cent. The actual amount they owe is US 15.4 million being 309 million multiplied by $ 0.05.
Interfin Bank , Farai Rwodzi and others conspired and connived to illegally and irregularly grab my Bank. This is proven by High Court Case HC 6244-04.Interfin is enjoined in those proceedings by virtue of taking over Century /CFX holdings which is respondent number 6 in HC 6244-4.Interfin assumed all assets and liabilities of CFX/Century Holdings.They are refusing to identify who "bought" the 309 million shares in dispute.
I have been fair and reasonable with Mr Rwodzi and Interfin Bank Zimbabwe .I personally called Mr Farai Rwodzi on his mobile phone and offered to negotiate an amicable settlement. He banged the phone. I sent my little cousin to talk to Mr Njanike who is our relative, he rebuked and mocked her. I sent my lawyers Gutu and Chikowero Attorneys at Law to write to Interfin, but their letters have been ignored. All the way Mr Farai Rwodzi and Interfin have been displaying a high and mighty attitude whilst ignoring a legal and legitimate claim.
In addition I have offered them 2 options to resolve this, Firstly they can pay cash price of $ 15.4 million being 309 million shares times $ 0.05 per share or alternatively issue me with 309 million shares or equivalent in value to the $ 15.4 million.
Lastly this has been a very tragic personal loss for me and at first an apology would have been enough to end the story but all I have had have been false allegations and fabrications being offered as defence by people who ought to be very remorseful. My lawyer Mr Oscar Ziweni ( RIP) who filed High Court case HC 6244-02 died a broken man after his law firm and him were specified and banished for defending me and my Company ENG Capital.
My lawyer who had become more of my big brother was personally humiliated, detained, harassed, intimidated and emotionally blackmailed just to punish him for filing Case HC 6244-04.He then died mysteriously and suspiciously after being stalked and being under siege just to intimidate him from representing me and ENG Capital.
Now Interfin's so-called International investors and Business Partners have every reason to be jittery if they do business with people who are prepared to go to such an extent to take over assets or pretend such things never happened and carry on business as usual.
Newsday clarification on Farai Rwodzi ,Interfin Bank and Muponda over the CFX Bank Dispute
Dear MUNYARADZI MUGOWO - Business Editor - Newsday
My lawyers Gutu and Chikowero Attorneys at Law still havent confirmed seeing your retraction correcting the falsehood that Farai Rwodzi and Interfin Bank paid me $ 5.3 million.I was never evasive all I said was you need to publish as retraction and we proceed with the interview.Naturally it doesnt make mush sense for me to grant you an interview when you have published a falsehood that you refuse or fail to correct and retract.Surely you cant specialize on publishing fiction and false claims even when confronted with facts.
In addition I never claimed $ 5.3 million from Interfin .Rather it was Farai Rwodzi through Newsday who claimed they paid me $ 5.3 million.(http://www.newsday.co.zw/article/2010-08-25-interfin-acquires-13-of-starafrica ) Thats why we asked for a retraction because I never claimed 5.3 million and I was never paid 5.3 million.I am claiming 15.4 million being the 309 million shares times the value per share then which was us 5 cents.This gives the total of my claim which is $15.4 million.
Farai Rwodzi and Interfin Bank seem to be living in dream land a world of make belief. Its most unfortunate they are behaving like high school boys with bravado instead of seeking a solution. According to this article Interfin claim that I am claiming US $ 5.3 million http://www.newsday.co.zw/article/2010-09-26-interfin-rejects-mupondas-53m-claim . They further allege my media campaign constitute malicious cyber attacks .My campaign is perfectly legal and legitimate and will go on till Interfin and Farai Rwodzi pay what they owe me and my Company ENG Capital.
For the record I am not claiming $ 5.3 million. I am claiming $ 15,4 million being 309 million shares multiplied by the value per share of 5 cents to give a total of US $15.4 million. Farai Rwodzi is the one who falsely claimed to have paid me $ 5.3 million and I denied ever receiving the same.
My lawyers Gutu and Chikowero wrote to both Interfin and Newsday Newspaper to deny and ask for a retraction but Interfin choose to reply through press reports. Interfin further claim I authorized the sale of the shares. They conveniently forget that I in fact challenged the transfer of the shares through high court case HC 6244-04 .My co-director Nyasha Watyoka supported this motion to block the sale or transfer of the shares.
I understand Interfin have been trying to create the impression that we do not have a legitimate claim or we are using media whilst avoiding court.
That is not correct this matter is still before the High Court in Harare case # HC-6244-04 filed in late May 2004 by my then lawyer Mr Oscar Ziweni. Note respondent # 6 Century Holdings is now Interfin Holdings Limited who assumed assets and liabilities of Century Holdings when they took over CFX Bank which itself had taken over the original Century Bank .
My former lawyer Mr Ziweni died mysteriously and suspiciously after being stalked, intimidated, harassed, detained by various members of the state security sections for representing me in this case. At one stage he was forced into hiding when threatened with fabricated charges just meant to scare him off from representing me. This left me with no legal representation at that stage and I was also then specified leaving me in danger as my lawyer had died mysteriously and I feared for my life as well so I fled Zimbabwe.
However the court case still remains because it was duly filed and assigned through normal high court procedure. I have attached My original founding affidavit filed with Case HC-6244-04 opposing the transfer of 309 million shares which triggered this dispute with Mr Rwodzi and Interfin Financial Holdings.I will publish some of the original documents which show that the 309 million shares were illegally, corruptly and irregularly transferred. This is part 1 of 5If you can not access the attached copy please visit my Facebook profile and follow this link http://www.facebook.com/album.php?aid=2059705&id=1393181020&l=477a267b1f
THURSDAY, SEPTEMBER 16, 2010
Request to MoneyGram International on Farai Rwodzi and CFX/Interfin Banking Corporation as an Agent in Zimbabwe.
Madam Pamela H. Patsley
Chairman and Chief Executive Officer
MoneyGram Headquarters
1550 Utica Avenue SouthSt. Louis Park, MN 55416
1-800-328-5678952-591-3000
10 September , 2010.
Dear Madam,
RE - Request for MoneyGram International to suspend using Century /CFX/Interfin Banking Corporation as an Agent in Zimbabwe.
I am officially asking MoneyGram International to suspend any business dealings with Century/CFX.Interfin Bank until such a time that the ownership dispute has been resolved.
It is my submission that Mr Rwodzi and Interfin Bank have been engaged in unfair business and trade practises that include business conspiracy ,fraud,deception in the manner in which my Bank Century/CFX Bank's assets including its MoneyGram International Franchise were taken over and illegally and corruptly incorporated into Interfin Bank .This is a well documented case of 309 million shares I owned in Century Bank were fraudulently ,corruptly ,illegally and irregularly converted into CFX Bank then into Interfin Banking Corporation which is chaired by Mr Farai Rwodzi who co-owns the Bank with retired General Mujuru and his family and other senior politicians.
I have brought this matter to MoneyGram's attention on several occasions. Recently SW Radio Africa's Award winning Investigative Journalist Lance Guma spoke to Linda Michielutti MoneyGram International company spokesperson which shows MoneyGram is officially aware of the situation.-http://www.swradioafrica.com/news080910/moneytransfer080910.htm
MoneyGram's continued use of Century/CFX/Interfin Bank as an Agent is clearly prejudicing me financially and causing me severe emotional distress. MoneyGram International is continuing to use my bank infrastructure, systems and assets illegally seized from me despite my protestations.
I therefore humbly implore the MoneyGram International Board of Directors and audit committees as part of their fiduciary duties to conduct confidential internal investigations in the range of the matters I have raised, including financial and accounting irregularities affecting the Interfin/CFX/Century Bank and the owner ship structure of Interfin Bank . MoneyGram International may have inadvertently exposed itself to reputational, legal, and commercial risks by having inadequate policies and procedures that prevent and detect corrupt and fraudulent practises elsewhere by its Chairman.
My intentions are to recapture my shares in Century / CFX Bank or to amicably compel Mr Rwodzi and Interfin Bank Holdings to pay me for my 309 million shares in Century/CFX Bank, which were corruptly, illegally and irregularly converted to Interfin Bank. Failure to which I shall have no choice but bring to bear on Mr Rwodzi ,Interfin Bank Zimbabwe and all other associated business entities all forensic accountants, attorneys, investigative journalists, regulators, domestic and international law enforcers.
Please note I am reliably advised that MoneyGram International maybe violating American, Canadian and other International laws in their continued dealing with Century/CFX/Interfin-Bank
We await your urgent response to this serious matter. Should I not hear from you within the next 48 hours I will be proceeding without further reference to MoneyGram International
Regards,
Gilbert Muponda
TUESDAY, SEPTEMBER 14, 2010
Complaint against Meikles Chairman Farai Rwodzi on CFX/Interfin Bank Zimbabwe
The Board of Directors
Meikles Africa Limited
Business Address and Registered Office
P.O. Box 3598, Harare, Zimbabwe
99 Jason Moyo Avenue, Harare, Zimbabwe
Telephone +263-4-252068-78
Telefax +263-4-252067
Dear Gentlemen
RE - Letter of Complaint against Meikles Africa Chairman Mr Farai Rwodzi on CFX/Interfin Banking Corporation Zimbabwe
I write this letter to respectfully bring to your attention, and to seek your timely arbitration in a serious matter involving the Meikles Board Chairman, Mr Farai Rwodzi, Interfin, CFX/Century Bank, and myself.
It is my submission that Mr Rwodzi has been engaged in unfair business and trade practises that include business conspiracy and tortious interference with the CFX/Interfin merger.This is a well documented my 309 million shares I owned in Century Bank were fraudulently,illegally and irregularly converted into CFX Bank then into Interfin Banking Corporation which is chaired by Meikles Africa Chairman Mr Farai Rwodzi.
I therefore humbly implore the Meikles Board of Directors and audit committees as part of their fiduciary duties to conduct confidential internal investigations in the range of the matters I have raised, including financial and accounting irregularities affecting the Interfin/CFX/Century transaction and business conduct of Mr Rwodzi.
It is my further submission that Mr Rwodzi erroneously, or deliberately omitted to notify the Meikles board of improper actions regarding Interfin's acquisition of CFX banking assets that belong to me and my company ENG Capital.On 25 Mr Rwodzi willingly and misleadingly caused the Newsday Newspaper to falsely write that Interfin Bank had paid me US $5.3 million for my equity in CFX Bank. The website link is here http://www.newsday.co.zw/article/2010-08-25-interfin-acquires-13-of-starafrica "The company last month paid Gilbert Muponda $5,3 million for equity allegedly transferred to the acquirer irregularly during the merger, but is still to reach common ground with former CFX employees, who have sued over wage arrears and severance packages."
This was misleading to regulators,shareholders,investing public creating an inaccurate impression I had received money which I was refusing to acknowledge.It is unbecoming for Chairman of a leading Firm such as Meikles Africa Limited to seek to mislead the regulators and investors by making such fabricated public statements .
Interfin Holdings in fact owes me more than the US$ 5.3 million which Mr Rwodzi claims to have paid .The exact amount which is outstanding is US $ 15,450,000.00 ( Fifteen million Four hundred and fifty thousand dollars) .This is made up of 309 million shares multiplied by the value of each share which was $ 0.05 ( 5 us cents per share).This amount of US $ 15.45 million remains outstanding and due to me and ENG Capital.
This is a well documented case of 309 million shares I owned in Century Bank were fraudulently ,corruptly ,illegally and irregularly converted into CFX Bank then into Interfin Banking Corporation. An attempt was made to sell and transfer the same 309 million shares on or about 4 May 2004.
Meikles may have inadvertently exposed itself to reputational, legal, and commercial risks by having inadequate policies and procedures that prevent and detect corrupt and fraudulent practises elsewhere by its Chairman.
I do not have any ill feeling towards Mr Rwodzi or Interfin Bank Zimbabwe.All I have asked them is to seek an amicable conclusion to the matter.I have personally called Mr Rwodzi and my lawyers have officially written to Interfin seeking an amicable solution but all these efforts have been spurned forcing us to publicise what should otherwise be a private and confidential matter.
My intentions are to recapture my shares in Century / CFX Bank or to amicably compel Mr Rwodzi to pay me for my 309 million shares in Century/CFX Bank, which he has converted to Interfin Bank. Failure to which I shall have no choice but bring to bear on Mr Rwodzi ,Interfin Bank Zimbabwe and all other associated business entities all forensic accountants, attorneys, investigative journalists, regulators, domestic and international law enforcers.
We await your urgent response to this matter.
Regards,
Gilbert Muponda
WEDNESDAY, SEPTEMBER 8, 2010
Money Gram International sucked into CFX Bank dispute
By Lance Guma
09 September 2010
Gilbert Muponda is an exiled Zimbabwean businessman who is taking on the might of international money transfer giant MoneyGram, after he challenged them to review their relationship with a financial institution that he says 'stole' his bank.
Muponda was forced to flee the country at the height of a controversial crackdown on the financial sector in 2004. Century Bank, which he owned via his ENG Capital investment company, was illegally seized by the government he says. Six years on the struggling bank was rebranded to CFX Bank and later bought by Interfin Bank. Its CEO, Farai Rwodzi, is reported to be a proxy for retired army general Solomon Mujuru.
'Interfin is now liable to my claim due to their attempt to cover up the ownership dispute by rebranding and changing CFX Bank operations. This is clear money and transaction laundering being executed,' Muponda told SW Radio Africa. MoneyGram International has been sucked into the dispute because they have a business relationship with Interfin.
'I feel MoneyGram as a leading international brand should not be doing business with Interfin because they are holding onto an asset that was looted from me. So what we have asked MoneyGram to do is carry out a proper diligence check and ensure that they are doing business with reputable people,' he told us.
In November 2009 Muponda successfully used an internet campaign to block a major financial institution from buying the disputed bank. One of the world's biggest banks, Credit Suisse through the Finance Bank of Zambia, had sought to buy CFX Bank. Muponda however used an aggressive internet campaign dubbed 'Return Muponda's Bank' and Credit Suisse eventually pulled out of the deal.
On the 25th August this year the Newsday newspaper covered a story that quoted Interfin chairman Farai Rwodzi claiming they had paid Muponda US$5,3 million in compensation for his shares in CFX Bank. A furious Muponda denied this and said; 'Rwodzi and Interfin Bank Zimbabwe are trying to mislead their international business partners such as MoneyGram International and DSTV who are obviously concerned by the on-going CFX Bank/Interfin ownership dispute.'
On Wednesday SW Radio Africa spoke to Linda Michielutti, the company spokesperson for MoneyGram International. She told us 'MoneyGram International has an extremely strong commitment to and investment in anti money-laundering compliance. We are fully compliant with all local and international requirements for Money Services Businesses. We are currently investigating Mr. Muponda's claims.'
A determined Muponda meanwhile has designed more website banners, this time targeting MoneyGram and he has sent them to the company head office for them to see. 'We will look at this and revert to you,' was all MoneyGram lawyer Bessima Bahri wrote in response.
SATURDAY, AUGUST 28, 2010
CFX Bank saga takes new twist
HARARE - The ownership wrangle between leading Zimbabwean financial services group Interfin and exiled banker Gilbert Muponda took a new twist last week with allegations that the banking group misled the nation by claiming it has settled with the latter over his stake in CFX Bank which was acquired by Interfin.
Muponda told The Zimbabwean on Sunday that contrary to claims by Interfin chairman Farai Rwodzi, he was yet to receive the $5.3 million for 309 million shares illegally transferred to Interfin when the group acquired Century Bank - now called CFX Bank.
"Neither my legal representatives nor I have received compensation of any nature from Interfin, its directors or shareholders for the 309 million Century/CFX Bank shares embezzled from Century/CFX by Interfin," Muponda said. He said Interfin was "blatantly misrepresenting the facts" in order to run away from meeting its liability and warned the financial group's
international partners such as MoneyGram and pay-television provider MultiChoice of the possible risk from the fallout from the wrangle.
"I am sure Interfin are under serious pressure from a well known international financial services group to come clean on the
circumstances of their illegal takeover of my bank, CFX. "Interfin must act maturely and pay the US$ 5.3 million after which I and my lawyers will sign a letter of release and indemnity to confirm settlement has been made," he said. Rwodzi could not be reached for a comment last week.
MoneyGram International aiding Interfin Bank & Farai Rwodzi Corporate irresponsibility
It appears that MoneyGram International is leading international corporate irresponsibility that has gone unpunished for too long in African countries.Huge American and international firms deliberately doing business with individuals who have looted and grabbed assets.By continuing to partner Interfin Banking Corporation despite knowing the disputed ownership of the Bank ,Moneygram is only confirming its blatant disregard of internationally accepted corporate responsibility expectations.
MoneyGram International officers should have been far more alert to the perception that they might benefit from exploitation of their brand and reputation by doing business with Interfin Banking Corporation which includes an illegally incorporated entity CFX Bank .
In my effort to recover my Bank illegally seized from me when at least 309 000 000 (million) and up to 900,000,000 (Nine hundred Million), Century Bank shares fraudulently converted into CFX Bank shares. The fraud was masked as a merger between Century Bank and CFX Bank but after the merger Century name was dropped to cover the tracks of the fraud.
The dispute was triggered by the special bargain sale of 309,000,000 shares on 12 May 2004 but the total shares owned by me and my Company were 900,000,000 the balance was transferred in peace meal fashion to avoid detection of the fraud and transaction laundering that was being perpetrated. Various transactions and Company re-organization schemes with the ultimate aim of sanitizing asset looting and illegal expropriation of my Bank Century/CFX have been going on with the latest being re-naming the Bank Interfin Banking Corporation.
Integrity capacity is the individual and collective capability for the repeated process alignment of moral awareness, deliberation, character, and conduct that demonstrates balanced judgment, enhances ongoing moral development, and promotes supportive systems for moral decision making (Petrick and Quinn 2000). It is one key intangible asset that acts as a catalyst for reputational capital and its erosion can jeopardize the survival and credibility of organizations and markets
Corporate managers are expected to maximize investor returns while complying with regulatory standards, avoiding principal-agent conflicts of interest, and enhancing the reputational capital of their firms.In this case MoneyGram International Management seem to be taking a casual approach to a very serious matter.This may have serious repurcussions on the 70 year old firm's reputation especially in Africa where an elite class is seizing assets then going into partnership with Money Gram to gain international acceptability and good reputation by association.
Ethical literacy is all about recognizing potential ethical issues before they become legal problems ,this is why MoneyGram International need to trade carefully when dealing with a disputed asset such as CFX/Interfin Banking Corporation Zimbabwe.
The increasing level of managerial negligence and corporate irresponsibility as shown by both MoneyGram International Management and Interfin Banking Corporation has eroded domestic and global trust in Zimbabwe Financial system. If Chair man of Interfin Bank and Kingdom Meikles Africa Limited can publicly and falsely claim he paid someone US$ 5.3 million one wonders what else is being deliberately mis-stated to create a false impression to the Investing public ,international partners, shareholders and regulatory Authorities.
The neglect of managerial integrity capacity is at the moral root of Enron's legal and financial problems. What is legally permissible today, but morally questionable, may well become legally proscribed tomorrow. Thus, it is important for managers to proactively understand and attend to the multiple dimensions and moral antecedents of illegal activity.
Managers can attempt to evade full moral accountability by compartmentalizing and fragmenting their handling of management and ethics issues This is both immoral and unacceptable.MoneyGram International,Farai Rwodzi and Interfin Bank's actions are shocking and shows complete disregard for fundamental fairness.
The CFX/Interfin Bank Zimbabwe scandal involves both illegal and unethical activity and the courts of law will determine the precise extent of civil and criminal liability that accrues to the perpetrators.MoneyGram International need to keep this in mind.
The senior executives at Interfin Bank led by Interfin and Kingdom Meikles Africa Limited Chairman Farai Rwodzi believe had to be the best at everything it did and that they had to protect their reputations and their compensation as the most successful executives in the Zimbabwe market even using dubious and unethical means. When some of their business acquistions are not legally done and trading ventures began to perform poorly, they tried to cover up their own failures by issuing false and misleading news articles such as the one by Farai Rwodzi on 25 August 2010 in Newsday newspaper claiming Interfin Bank had paid Gilbert Muponda US $ 5.3 million for the CFX Bank equity stake.( http://www.newsday.co.zw/article/2010-08-25-interfin-acquires-13-of-starafrica ) .The Interfin and Kingdom Meikles Africa Chairman told Newsday Newspaper "The company last month paid Gilbert Muponda $5,3 million for equity allegedly transferred to the acquirer irregularly during the merger" .This is incorrect this money has not yet been paid to settle the CFX/Interfin Bank ownership dispute.
Interfin Bank Senior Management led by Farai Rwodzi appeared to be erroneously and overly confident of their initial distorted perceptions of morally acceptable business conduct, and when challenged, as regarding the appropriateness of his financial structure of reversing taking over a disputed CFX Bank, retaliated against accusers and sought to mislead the investing public,regulatory authorities and International firms such as MoneyGram International who have failed to carry out proper due diligence to verify claims by Farai Rwodzi that Interfin Bank has settled the ownership dispute by paying me US $ 5.3million .
When a senior executive like Farai Rwodzi Chairman of Kingdom Meikles Africa resort to making false claims his partners such as MoneyGram International, Kingdom Meikles Africa and fellow Interfin Directors should be alert and know the lack of intergrity exhibited by such claims.
Moral conduct, an important component of process integrity, is the individual and collective carrying out of justifiable actions on a sustained basis. Managers that exhibit ethical conduct develop a reputation for dependability and alignment of moral rhetoric and reality over time and make public statements based on fact and verifiable information.
ENG Capital to resume operations
Last week Investment Banker Gilbert Muponda sat down for an interview with Shame Makoshori, The Financial Gazette Chief Business Reporter discuss the recent High Court ruling returning ENG Assets.
Shame Makoshori - SM
Gilbert Muponda - GM
SM - What does the judgment mean to you and what is the way forward?
GM - The High Court quote from HC6086/09 "ENG companies and directors satisfactorily liquidated all debts past present and future accumulated by the company". That is the important bit. Then the bit about excess cars and excess companies like Allied Conveyors being returned to us. The Master of High Court and liquidator confirm. This serves to confirm that ENG was only targeted by greedy individuals who wanted to grab its assets such as Century Bank which was renamed CFX Bank. This bank must be returned to ENG as other banks such as Trust, Barbican, Royal Bank have been returned to their original owners. There is no reason whatsoever why Century/CFX Bank shouldn't be returned to me and ENG.
SM - Does this judgment pave the way for the return of ENG in Zimbabwe?
GM - It shows that ENG was solvent and financially solid. Yes ENG is being revived. We are working flat out for the re-launch around December 31. But it won't be in Zimbabwe as I remain specified. I cannot be a director in Zimbabwe it will just be active outside Zimbabwe until despecification. But we are ready from day one (of despecification) to re-launch ENG Bank. ENG Bank will not take deposits from the public. It will be focused on investment banking and activities such as research, mergers and acquisitions and private equity. Our feeling is that Zimbabwe has enough traditional banks but it does not have a proper investment bank in the mould of Goldman Sachs and Black Stone. There are no meaningful deposits in the Zimbabwe market so most banks will struggle to get by because of mis-aligned cost structures and over staffing. Our model will focus on helping small companies get listed or raise capital instead of focusing on mobilising deposits that are not there. Zimbabwe's banking sector as it is right now can only be saved by the re-introduction of the Zimbabwe dollar maybe pegged to the RAND or US$ .Otherwise with people earning $200 per month and spending all of it there is no savings therefore nothing for the banks to manage.
SM - Have you engaged authorities in Zimbabwe to begin the process of your despecification, or you are awaiting the State to take the initiative?
GM - My lawyers have engaged the authorities about despecification and we are happy with the progress. We have positive feedback that things may be normalized soon to allow my safe return and re-launch ENG Bank.
SM- You have been vocal since the time you fled the country, complaining about the way your assets were handled. It should be a long and bumpy road to despecification, I suspect?
GM - Yes, I have been vocal, but that is the way one must be when unfairly treated by individuals abusing state authority. The High Court has spoken and confirmed my innocence. I think we must respect that and move on in the spirit of national healing and rebuild the country together. This is the time to work together and all gear towards re-branding Zimbabwe as a financial powerhouse of the Southern African Development Community region. I am not a politician and I am not interested in politics but at times politicians screw up so much that keeping silent would be a crime. I had to articulate my side of the story and how I felt we were being treated. This was very important because there was a false impression that ENG was a shelf company that owned nothing but cars. But as you have seen I have managed to highlight that ENG in fact owned many assets including Century. CFX Bank which I want returned to me and ENG.
SM - So this judgment means that when they said you abused depositors' funds on joyrides to watch soccer matches in London they were lied? You were expending your own money?
GM - Those were totally false and fabricated allegations , the smokescreen that was used to create a contrived depiction of a mass scandal which was used to justify the blatant looting and asset stripping of ENG, including the callous misappropriation of our bank, Century/CFX by politically connected individuals.
I have never watched a match in the United Kingdom ,My favourite soccer team is Dembare so there is no way I could go to England to watch a football team I have no liking for instead of my one beloved one based in Mbare. That ridiculous story was totally false and peddled through the rumour mills by the very same persons who were busy raiding ENG assets.
Let me set the record straight - ENG never availed depositor funds to its directors for personal use nor did I as a officer of ENG exploit depositor funds for personal use. ENG did not take deposits from the public, ENG was a fund of funds which meant only other highly specialised Institutions dealt with ENG.
When we started ENG I was already financially secure. Prior to me starting ENG my record of Employment at NMB Bank is testimony to my financial expertise. I rose to be the youngest Head of Corporate Finance in the Zimbabwe market. At TN Financial Services I was the youngest director of any Financial Institution and at both institutions I owned equity.
ENG founders were a very focused and determined team and it is that spirit and hard work, that built ENG into a formidable entity in a short period of time.
The foreign travels mentioned were actually business trips undertaken by the directors of ENG - a company managing assets in excess of 160 million dollars exploring new markets in preparation for the anticipated launch of ENG Global. Instead innuendos, hearsay and unfounded accusations dripping with venom from all quarters fuelled the vilification of our otherwise solid financial institution. Alas ENG is a strong brand again and our focus for now is to rebrand and rebuild.
SM - And if you were innocent why did you run away. Why didn't you say I am innocent, I will defend myself?
GM - Natural self preservation dictated my actions - I had to run away from a vicious system and greedy individuals who would have stopped at nothing in their quest to strip me of all my wealth and create my persona as a scapegoat and reason for the collapse of the financial system. Before and after ENG how many other financial institutions which ENG never dealt with collapsed? How many other innocent business persons have been incarcerated since?
My attorney, the late Mr Oscar Ziweni was harassed, intimidated and arrested for defending me and specified for taken my brief and in the end I had no legal representation. At that time the tumultuous atmosphere that had gripped the nation and the culpable political interferences in the ENG saga, presented a clear and present danger to me and my family which left me with no choice but to abscond and seek refuge elsewhere,, where I could then clear my good name in peace.
SM- You should have been targeted after creating enemies in the corridors of power? am I right?
GM- We were targeted because we did not have a political Godfather to protect us. You should know by now Zimbabwe is a class society there are people who feel they only deserve certain things and certain level of success. If you succeed without their help or involvement or they don't know who you are that is cause of concern to them and the full state apparatus can be unleashed on you. I was an SME(i.e self made entrepreneur).
SM- The ENG brand has been soiled, and already the market in Zimbabwe is sceptical about the financial system. What gives you the confidence you will make it. Will you redress your brand, I mean renaming.
GM - The ENG brand remains strong .Since ENG was closed 6 years I havent seen any exciting and meaningful financial services brands coming out of Zimbabwe that as nearly strong. Yes it may have been affected by this immediate past but all strong brands are built by going through such events and forging ahead. ENG has settled all claims against it and there have been excess assets which we will use as the core of our new vision with the same name. Once Century/CFX Bank is returned to me and ENG we will restructure and rename it ENG Bank and model it similar to Black Stone and Goldman. Most banks are struggling in Zimbabwe because of their cost to income ratios which are totally out of line. In addition the Banks have failed to access foreign credit lines to inject liquidity in the market. ENG Bank will be in a unique position to access foreign credit lines because of the networks I have been developing over the last 6 years since I left Zimbabwe.
SM - It must have been pretty scaring being fingered in what authorities called big scandals at that tender age. Tell us how you felt then?
GM - I was obviously very disappointed because I felt we were building a solid business and a brand that would make Zimbabwe. I was still a very young man but highly experienced due to my previous working experience and having been mentored by Zimbabwe's brightest financial brains and alongside highly talented colleagues possessing experience. So I feel that in some way I had been trained to handle the crisis as it unfolded.
SM - You should be at liberty to share with us how you outwitted police. Tell us the experience. A banker turned fugitive?
GM - GM - I do not think I outwitted the Police.The individuals at ENG Executive Security just did their work.On my part I had been praying and fasting for 5 weeks before I left Zimbabwe so I felt there was divine intervention.,you know the biblical moments when the Seas open to let you pass and then close once you are gone.I was never a fugitive.Fugitive refers to someone who is fleeing justice, I do not think at that time what was happeing to me was justice, I was fleeing persecution and there is a term for that.The High Court of Zimbabwe has proven my innocence so Century /CFX Bank must be returned to ENG just like Time Bank,Trust,Barbican and Royal Bank are being returned to their former owners why should it be any different on Century/CFX Bank?
THURSDAY, AUGUST 26, 2010
Muponda refutes Interfin Bank Chairman Farai Rwodzi's settlement claim
To the Editor
Newsday
On August 25 2010 in the Newsday publication the Chairman of Interfin Farai Rwodzi blatantly misrepresented the facts of the ongoing dispute regarding the misappropriation of 309 million Century/CFX Bank shares by Interfin. Farai Rwodzi recklessly and deceitfully caused to be published the following falsehoods, "Interfin is currently preoccupied with the thorny and cumbersome issue of post-merger consolidation and the process is fraught with challenges related to culture divergence and contingent liabilities related to labour disputes and equity claims being made against CFX.The article entitled "Interfin acquires 13% of Starafrica" written by
MUNYARADZI MUGOWO clearly seeks to mislead the investing public,regulatory authorities and international organizations such as MoneyGram International and other Banks.
The article stated "The company last month paid Gilbert Muponda $5,3 million for equity allegedly transferred to the acquirer irregularly during the merger, but is still to reach common ground with former CFX employees, who have sued over wage arrears and severance packages.".This is false.
It is clear Mr Farai Rwodzi and Interfin Bank Zimbabwe are misleading the investing public that Interfin Bank has settled a liability.They are trying misleading their International business partners such as MoneyGram International and DSTV who are obviously concerned by the on going CFX Bank/Interfin ownership dispute and reputational risk attached to the on going dispute. Reputable organization such as MoneyGram International have to ensure that they deal with only reputable organizations who settle their disputes in amicable ways.
Such prevarication through a respected publication like yours is designed to give credence to a fictitious transaction that never occurred. Neither my legal representatives nor I have received compensation of any nature from Interfin, its directors or shareholders for the 309 million Century/CFX Bank shares embezzled from Century/CFX by Interfin.
Farai Rwodzi's fraudulent misrepresentation and gross distortion of facts fails to include material information which would significantly alter the interpretation of this matter fact. He arrogantly repudiates overtures for an amicable out of court settlement and yet admits in this Newsday interview of possession of my 309 million Century Bank shares.
I would like to offer Mr Farai Rwodzi and Interfin Bank Zimbabwe an opportunity to attest to this claim of payment by submitting for publication to your esteemed paper, a signed copy of the settlement agreement between ourselves together with a copy of the payment cheque.
Thank you for your prompt attention to this matter.
Interfin Bank HAVE NOT paid me US$ 5.3 million for my CFX Bank Equity
There is a false article appearing on Newsday Newspaper http://www.newsday.co.zw/article/2010-08-25-interfin-acquires-13-of-starafrica
claiming that Farai Rwodzi and Interfin have paid me US$ 5.3 million for my Equity which they illegally transfered CFX Bank into Interfin Banking Corporation.Interfin Bank Zimbabwe or Farai Rwodzi have not paid me or my lawyer or representative the $ 5.3 million which they owe me for those shares.
I have been very fair and reasonable with Interfin and asked them to table a serious offer on how they intend to resolve the ownership dispute.I still await the settlement of the US $5.3 to settle the CFX/Interfin Bank Zimbabwe ownership dispute.I am sure Interfin are under serious pressure from a well known International Financial Services Group to come clean on the circumstances of their illegal take over of my Bank,CFX.Interfin must act mature and pay the US$ 5.3 million after which I and my lawyers will sign a letter of release and indemnity to confirm settlement has been made.
I have instructed my lawyers in Harare and in Toronto to ask Newsday Newspaper to make amends and correct the false impression being created by their article.Newsday should also have verified this report before stating that Interfin "paid Gilbert Muponda $ 5.3 million".This is unacceptable as they are misleading the public.In the process tarnishing my good name and create unnecessary stress fro me and my family.Interfin are fully aware I have tried to meet them half way to allow both parties to move on.
I have made it clear to them that I do not wish to interfer with their business growth or strategy and would welcome any serious settlement offer.I only seek what is rightfully and legally mine.However I can not accept them putting out inaccurate statements.Thats not acceptable.
TUESDAY, AUGUST 24, 2010
MoneyGram International strengthens Rwodzi ,Mujuru and Interfin Bank money laundering web
MoneyGram International strengthens Rwodzi ,Mujuru and Interfin Bank money laundering web
After a recent article exposing how Moneygram International was lending credibility to asset looting ,grabbing and subsequent money laundering by partnering my seized bank CFX which was renamed Interfin Banking Corporation, MoneyGram International pretended to be surprised. MoneyGram are fully aware they are doing business with people who are at the centre of looting assets and laundering the proceeds by partnering Internationally reputed brands such as money gram.
It is clear MoneyGram International guilty of very serious Corporate Irresponsibility by failing to do proper due diligence with the entities that they are using as agents in Zimbabwe in particular CFX/Interfin Bank Zimbabwe owned by General Mujuru and his business associate Farai Rwodzi. The details below and other generally available on the internet clearly show that MoneyGram International is complicity by association and are aiding and abetting in the asset looting going on in Zimbabwe.
MoneyGram International need to review their participation in the Farai Rwodzi-Mujuru-Interfin Bank Zimbabwe asset looting and grabbing syndicate. According to media reports part of the missing US$ 30 million diamond sales proceeds was "invested" at Interfin Bank Zimbabwe at a time when the Zimbabwe minister of Finance and Treasury Depratment are trying to trace those funds. The media has been widely taunting Interfin Bank and Group as cash rich without telling the public that this very same cash was looted from diamond sales proceeds and is being used to "buy" CFX Bank? And for Moneygram International to be doing business with such entities who are ready to divert diamond sales proceeds whilst people are dying of hunger and lack of medication it only serves to confirm that MoneyGram International do not care about ordinary people who are the bulk of their clients who use their service.
Mujuru is also said to have shares in African Consolidated Resources (ACR), the company in the middle of a legal battle with the government over mining rights in Chiadzwa. ACR CEO Andrew Cranswick is described in the report as having aligned himself with the wrong faction in ZANU PF.
"Mujuru was to provide Cranswick political coverage, as the latter comes from a family with the wrong political pedigree. (His family was known to be big supporters of Ian Smith's Rhodesian Front). Instead, Cranswick is now paying the price for backing the wrong horse in the ZANU succession race."
Meanwhile, ACR offered the Zimbabwean government (whom exactly?) an equity partnership in this venture and still seems to await a response. According to Cranswick, `the board remains hopeful that good sense will prevail and the deposit can be exploited for the good of all Zimbabweans`River Ranch, which General Mujuru controversially grabbed at gunpoint in 2004, is another contested diamond area that the international rights group says is inextricably linked to the pursuit of political power and defiance of Kimberley Process protocols. PAC says: "The mine goes to the very heart of Mujuru's struggle for control of ZANU"
A news report by respected journalist Violet Gonda quoted the "Titled: Diamonds and Clubs: The Militarized Control of Diamonds and Power in Zimbabwe, the report shows how the Chiadzwa diamonds are sustaining the ZANU PF regime and also fuelling the ongoing political conflict."
According to Gonda's article The report highlights individuals like former army general Solomon Mujuru, who is heavily involved in illegal diamond deals and also uses his diamond mine 'River Ranch' to launder the family's ongoing plunder of resources from the Democratic Republic of Congo.
According to The Insider - May 2009 River Ranch piled up pressure to silence the publication for exposing the corrupt and illegal practices that were allegedly going at the mine. According to recent media reports the mine has now been "transferred" to Harare Lawyer Chinake through an " acquisition of Kuphikile Resources' shareholding - owned by retired army general Solomon Mujuru and Tirivanhu Mudariki.
River Ranch has intensified its efforts to silence The Insider over allegations that the company which runs a diamond mine near Beitbridge allegedly used vehicles registered in the name of the United Nations Development Programme to smuggle diamonds into South Africa. This is typical of the Farai Rwodzi-Mujuru-Interfin Bank Zimbabwe syndicate to use International Organizations to appear clean ,legal and legitimate whilst doing serious underhand deals such as the reported "investment" of at least US$ 2 million at Interfin Bank Zimbabwe to finance the acquisition of CFX Bank whilst Zimbabwe Treasury remains cash strapped and state enterprises are closed due to lack of funding. A report by The Zimbabwe Standard confirmed these irregular investments (http://www.theindependent.co.zw/local/27651-zmdc-executives-financial-scandal-deepens.html) The Voice of America did another follow up article
http://www1.voanews.com/zimbabwe/news/Suspended-Zimbabwe-Minerals-Executive-Said-Building-Harare-Mansion-100915419.html The Zimbabwe Telegraph did an additional article ( http://www.zimtelegraph.com/?p=8825). In this case MoneyGram International Brand is being used by Farai Rwodzi and Interfin Bank Zimbabwe to appear in "good company" whilst looting assets which can easily be laundered by associating with world leading brands like Money Gram International.
A report by Charles Rukuni highlighted the allegations of UNDP involvement in diamond smuggling from River Ranch were first levelled by Bubye Minerals, a company that also claims rights to the diamond mine which is now owned by Saudi Arabian billionaire Adel Aujan and former commander of the Zimbabwe army Solomon Mujuru or his front.
The UNDP was involved with River Ranch through African Management Services Company (AMSCO), a Johannesburg-based company that it jointly owns with the International Finance Corporation (IFC), the private sector arm of the World Bank.
AMSCO started assisting River Ranch in November 2004 by seconding five senior managers to the mine. It pulled out in July last year after the allegations surfaced in the local and international media.
Bubye claimed that officials seconded by AMSCO were using UNDP vehicles to smuggle diamonds to South Africa because the vehicles and the officers had diplomatic immunity and were not subject to search as they were accredited with the UNDP.
Mujuru, a politburo member of President Robert Mugabe's Zimbabwe African National Union-Patriotic Front (ZANU-PF), is specified under the United States sanctions that are implemented by the Office of Foreign Assets Control (OFAC). His wife, vice-president Joyce Mujuru is also specified. The mine was discovered in 1971 by Kimberlitic Searches, a subsidiary of De Beers, but it forfeited its rights in 1991 following a wrangle with the Zimbabwe government over the marketing of the gems. The mine was taken over by Auridiam, an Australian company that entered into a joint venture with Canadian company Redaurum.
Zimbabwe`s president Mugabe expressed his disapproval of senior officials` involvement in the diamond industry. He described it as an industry where `suspicion could easily be raised`. Mugabe asked, `How do you become involved in this sort of thing when you are a Politburo member, partnering white businessmen, why?`
Retired general and war hero, Solomon Tapfumanei (directly translated: How did you get this rich?) Mujuru, alias Rex Nhongo, is the only ZANU PF Politburo member who is publicly known to have a direct interest in Zimbabwe`s diamond fields. As a Zanu PF member he serves on the board of the diamond field, River Ranch Limited.His interest in the diamonds has been through various schemes and elaborate structures including using various fronts. The proceeds are then channeled through Interfin Bank Zimbabwe which Mujuru owns through his business associate and frontman Farai Rwodzi .In the recent case the ZMDC reportedly invested heavily in Interfin Bank under the rumoured instruction of the General,these diamond sales proceeds have allowed Farai Rwodzi and Interfin Bank syndicate to go on a buying spree including Zimbabwe Alloys,CFX Bank and possibly a stake in Kingdom Meikles Africa where Rwodzi is attempting to push out Kingdom Bank founder Nigel Chanakira with the ultimate plan being to incorporate Kingdom Bank into the Farai Rwodzi-Mujuru-Interfin Bank syndicate.
General Mujuru is allegedly also a close friend and business ally of Andrew Cranswick. His legal counsel at River Ranch Limited is George Smith. Smith is a retired judge who served under Ian Smith and Robert Mugabe as a cabinet secretary. It is interesting to observe that Mujuru`s role is never publicly questioned, as he remains a war hero. Meanwhile, he has amassed great wealth over the years using various fronts and schemes with Interfin Bank Zimbabwe acting as the custodians of the looted loot and specializing in cleaning the proceeds.
This article appears courtesy of GMRI CAPITAL - www.gmricapital.com . It is original content generated for 3MG MEDIA.
Gilbert Muponda is an Investment Banker and Founder of GMRI CAPITAL . He can be reached at; www.ZimFace.com and www.facebook.com/muponda
MONDAY, AUGUST 23, 2010
Court victory for former ENG directors
THE High Court has ordered the release of four vehicles seized from the now defunct ENG Capital after the company cleared all its liabilities. In a judgment delivered last month, Justice Lavender Makoni ordered police to return the four top-of-the-range vehicles a Mitsubishi RVR (registration number 792-035 G), a Mercedes Benz C320 (793-669 H), a Mercedes Benz C180 (778-980 R) and a BMW Z3 (740-372 B).
Makoni ruled that officer commanding Zimbabwe Republic Police (ZRP) Criminal Investigations Department and police commissioner general Augustine Chihuri who were cited as second and third respondent respectively would "bear the costs jointly and severally, the one paying the other to be absolved". ENG went into liquidation in 2004 and all its assets were taken over to cover its liabilities.
The ruling by Justice Makoni comes after ENG co-founder Nyasha W atyoka had approached the courts for the release of the cars on the grounds that they had not been sold to clear the debts. Watyoka, in his founding affidavit filed last year, said the liquidator (Reggie Saruchera who was cited as the first respondent) had returned one of the companies, Allied Conveyors as its assets were no longer required to pay up creditors.
"The 1st respondent (Saruchera) on the other hand had never sought to dispose of or deal with the aforesaid motor vehicles before, during or after the liquidation process. "I presume again the realisation was that it was not necessary," Watyoka said in the affidavit.
ENG shocked the markets when it faced problems in 2004 with monetary authorities accusing directors of operating a pyramid scheme especially for its asset management arm. Formed in 2001 by Watyoka, Gilbert Muponda and Elton Chitondo, ENG had interests in various listed and unlisted companies.
Contacted to comment on the ruling Muponda said he is not bitter but felt exonerated by the ruling which should now pave way for his despecification by the authorities. "I look forward to the resumption of our business and I am naturally pleased to see that all claims have been settled with excess assets to spare. "This gives us a chance to re-launch the brand and take off from where we left off," he said.
Muponda has in the past six years launched an intensive cyberspace war to reclaim his assets which he said had been seized by authorities. Muponda is also claiming that 309 million Century shares were illegally sold in 2004. Century was later merged with CFX. CFX was recently taken over by the cash-rich Interfin Holdings Limited. Its assets and liabilities were taken over by Interfin Banking Corporation.
BY OUR STAFF
http://www.thestandard.co.zw/business/26067-court-victory-for-former-eng-directors.html
WEDNESDAY, AUGUST 18, 2010
Farai Rwodzi & Interfin Bank's risk taking unwise
On 6 July 2010 according to news reports "We saw potential where everyone else saw risk," Farai Rwodzi, Interfin Bank Zimbabwe chairman, said just before trades opened to celebrate Interfin's attempted to hide its tracks of taking over a disputed asset ( Century /CFX Bank ) and sanitize an illegal transaction. "Today the deal is done. We have a solid balance sheet; Interfin will never be the same again." Farai Rwodzi continued.
It is clear at this stage that Farai Rwodzi and Interfin Bank Zimbabwe felt their stunt of taking over a disputed Century/CFX Bank and proceed to rename and rebrand it as Interfin Banking Corporation (IBC) would work wonders and everyone would forget that they are trading in stolen assets and trying to conceal the true nature of the transaction they were executing.
Rwodzi and CFX/Interfin Bank clearly know that CFX Bank was grabbed from me and ENG Capital and because of that it is a disputed asset which brings with it significant reputational risk. The whole Zimbabwe Financial market knows this that's why all other major participants avoided investing in CFX Bank before the ownership dispute was resolved .It remains to be seen whether Farai Rwodzi and Interfin Banks' gamble will pay off. The wisdom of taking over a disputed bank and hoping to rebrand it remains suspect.
The ownership dispute was triggered by the special bargain sale of 309,000,000 shares on 12 May 2004 but the total shares claimed by me and my Company is 900,000,000 the balance was transferred in peace meal fashion to avoid detection of the fraud and transaction laundering that was being perpetrated. CFX was nothing more than a forex trading shop which was used to swallow Century Bank as a cover up of the illegal and fraudulent seizure of the Century Bank. I lost Century Bank shares owned through ENG Capital after they were "fraudulently" converted into CFX Bank which took over Century Bank assets and Branch network.
The 309 million Century Bank Shares I owned through my Company ENG Capital were fraudulently transferred and converted at the time of the merger between CFX Bank and Century in 2004 and Interfin Bank proceeded to take over CFX ignoring the disputed ownership of CFX Bank and the attendant reputational risk. I even wrote to Credit Suisse to dissuade them from taking up shareholding in CFX FS. Credit Suisse has 40% shareholding in FBZ.
CFX/Interfin Holdings reverse listed on the Zimbabwe Stock Exchange (ZSE) using the infrastructure and legal structure taken over from the disputed Century/CFX Bank . CFX had floated the equity offering to raise the minimum capital requirements set by the Reserve Bank of Zimbabwe following the collapse of its equity-financing negotiations with the Finance Bank of Zambia.These talks collapsed once Finance Bank of Zambia discovered the raging ownership dispute which Interfin Bank is seeking to conceal and hide by rebranding Century/CFX Bank as CFX/Interfin Banking Corporation (IBC)
This article appears courtesy of GMRI CAPITAL - www.gmricapital.com . It is original content generated for 3MG MEDIA.
Gilbert Muponda is an Investment Banker and Founder of GMRI CAPITAL . He can be reached at; www.ZimFace.com and www.facebook.com/muponda
By Martin Kadzere
FORMER CFX Bank workers have taken steps to reverse the merger of the financial institution with Interfin Banking Corporation.
The retrenched workers wrote to the Registrar of Banking Institutions through their lawyer objecting the amalgamation which they said was done before outstanding staffing issues were resolved.
Interfin gained a controlling stake in CFX late last year after underwriting its US$10 million rights offer, which drew a 1,98 percent response from the existing shareholders.
This resulted in the reverse takeover of CFX by Interfin and the latter was subsequently listed on the Zimbabwe Stock Exchange in April.
However, nearly five months after amalgamation, 61 former CFX employees want the merger undone until some outstanding legal issues are finalised.
The former workers also want clarity on why the transaction was deemed a merger when in fact it was a take over of CFX under which the merged institution had an obligation to assume CFX assets, liabilities and staff.
"Our clients are extremely concerned about the fact that the Memorandum of Agreement by Interfin and CFX Bank Limited is dead silent on the fate of CFX Bank Limited employees who had been targeted for retrenchment," reads part of documents lodged with the Registrar of Banks by the workers' lawyers Matsikidze and Mucheche Legal Practitioners.
"To the extent that the MoU between Interfin and CFX is mute on the status of CFX employees earmarked for retrenchment, the agreement which gave rise to the merger is a legal nullity.
"Our clients are of the firm and immutable view, and rightly so in our view, that the merger is no more than a gimmick to eliminate all CFX Bank employees earmarked for retrenchment via the back door without compliance with the mandatory provisions of the Labour Act.
"The merger of the two banking institutions inflicts grave violence to the provisions of the Labour Act which enshrines the rights of employees on transfer of undertaking in that the MoU is silent on the rights of the employees particularly (those) who had already been served with notices of intention to retrench.
"It is our considered view that the merger of the two banking institutions is in fraudulem legis in that it fails to guarantee the rights of the employees on transfer of undertaking as embodied in the Labour Act," read the document.
Interfin managing director Mr Raymond Njanike, however, said the move by the former workers was a "misguided approach" as there was no basis for putting the merger on hold.
"These are shareholders issues and how then does a worker block the merger and what are the merits?" asked Mr Njanike.
"The purpose was to save these two institutions from collapse and we had blessing from all regulatory authorities. It is a circle and if things improve, we will recall them."
CFX approached Interfin after the Finance Bank of Zambia aborted plans to inject fresh capital into the financial institution on fears of litigation threatened by former ENG director Gilbert Muponda, whose subsidiary Century Bank merged with CFX in 2004
POSTED BY ADMIN AT 8:53 PM 0 COMMENTS
SUNDAY, AUGUST 8, 2010
ENG saga finally over as all claims are settled
ENG Capital a financial institution registered in Zimbabwe was dramatically closed down in 2003-4 following spurious allegations of being under capitalised, has now fully paid out all claims according High Court records obtained by The Zimbabwe Mail. This comes as a surprise given how there were widespread allegations that ENG Capital was bankrupt. The records clearly illustrate that all payments to all the claims against ENG were met leaving excess assets that have been returned to ENG's directors. This turn of event begs us to question the real motive behind the vilification and subsequent specification of ENG directors.
ENG Capital has proven that its assets far exceeded its liabilities and was liquid, solvent and solid and met all its creditors and liability obligations. The record laid at the High Court in HARARE in October 2009 and passed without any objections or counterclaims from any creditors. The relevant Government Gazette was published in October 2009 to confirm this.
The ruling on 15 July 2010 under case number HC 6086/09 states that -"ENG companies and Directors satisfactorily liquidated all debts past, present and future accumulated by the company"
The Master of the High Court together with the Liquidator confirmed to the court that all excess assets were return to ENG and its directors. Several of ENG Companies including Allied Conveyors PVT LTD was returned to ENG Capital shareholders and contributories. Amongst other assets returned are vehicles, kept gathering dust for 6 years at Chikurubi:
1- BMW - Z3
2- Mercedes Benz - C320
3- Mercedes Benz - C180
4- Mitsubishi RVR -SUV
Exiled former ENG Director Gilbert Muponda "I am not bitter but feel exonerated by the ruling which should now pave way for my despecification by the Zimbabwean Authorities and allow my family and I to resume a normal life. I look forward to the resumption of our business and I am naturally pleased to see that all claims have been settled with excess assets to spare. This gives us a chance to re-launch the brand and take off from where we left off"
WEDNESDAY, AUGUST 4, 2010
I feel Vindicated and undefeated - ENG pays off all claims and excess assets Returned
Its rare that you feel vindicated in life. Well for me its one of those rare moments relating to the ENG Capital matter. ENG Capital has proven it was liquid, solvent and solid by fully paying off all claims, creditors and liabilities. The record laid at the high court in HARARE in October 2009 and passed without any objections and no-one claimed any outstanding balance. The relevant Government Gazzette was published to confirm this. HC 6086/09 -"ENG companies and Directors satisfactorily liquidated all debts past, present and future accumulated by the company"
After that conformation all excess assets were return to ENG Contributories. Several of our Companies including Allied Conveyors PVT LTD was returned to us. I am still struggling to get Police return my daughter's Kindergatten graduation pictures and my Graduation pictures which they seized. In addition 4 cars are being returned
1- BMW - Z3
2- Mercedes Benz - C320
3- Mercedes Benz - C180
4- Mitsubishi RVR -SUV
I am naturally pleased to see that all claims have been settled with excess assets to spare this proves all allegations were malicious and meant to defame me. This proves what we have always said that ENG Capital and my self were persecuted out of greed and malice.
I would like to thank God who made this day possible. In addition I would like to thank those who stood by me all the way and believed in my explanation. Team ENG I miss you guys ,you were too strong keep your heads up!!Young CM thanks for being by my side until the very last moment, you are loyal and too kind. Thanks.
POSTED BY ADMIN AT 9:38 PM 1 COMMENTS
'Paradza skipped country in haulage truck'
http://www.zimbabwesituation.com/jan26b_2006.html
FinGaz
Staff Reporter
FUGITIVE High Court judge Benjamin Paradza might have smuggled himself out
of the country hidden in a haulage truck before heading for a "safe"
hideout, most probably in the United Kingdom.
Intelligence sources said Paradza, who skipped bail this month and claims to
be a victim of political interference in the judiciary, could have slipped
out of the country through Beitbridge with the help of a cross-border
trucker.
The sources said he later made arrangements in South Africa to seek refuge
in the UK, a fierce critic of Harare's human rights record.
It is suspected that some high-ranking government officials may have had a
hand in Paradza's escape.
Paradza, a liberation-war fighterturned-judge, breached his bail conditions
while awaiting sentence on January 13. The 49-year-old judge, who was on
bail pending sentence, had been convicted of two counts of corruption after
inciting two fellow judges to release a passport belong to his business
partner who was facing murder charges.
A warrant of arrest has since been issued against Paradza and faxed to all
border posts and international airports.
Police spokesman Wayne Bvudzijena said the force is still to locate Paradza
but professed ignorance about the information picked by The Financial
Gazette this week.
"We are anxious to bring him back into the country. It is also in his
interest to come back, because as it is, he is a fugitive from justice. We
don't have that information, but whatever the case might be, when we
eventually get him, we will be able to get the information." Bvudzijena
said.
A number of business executives have skipped the country to escape a
crackdown on corruption, now being driven by the Anti-corruption Commission,
headed by former comptroller and auditor-general, Eric Harid.
Those rumoured to have sought refuge in the country's former colonial
master, UK, include former NMBZ executives Julius Makoni, James Mushore,
Otto Chekeche, Francis Zimuto, who fled the country in March 2004.
Other fugitives include Nicholas Vingirai, founder of Intermarket Holdings,
Mthuli Ncube who founded Barbican Bank as well as former ZANU PF sympathiser
Mutumwa Mawere who is believed to be in South Africa. Some of these
fugitives are said to have skipped the country after they were tipped of
their imminent arrest by "well-placed sources".
Asked whether the failure to nab Paradza and the other fugitives is not
indicative of the ineffectiveness of the International Police Organisation
(Interpol), Bvudzijena said:
"The ZRP (Zimbabwe Republic Police) doesn't have jurisdiction outside its
own country. We have to talk to Interpol and it is the member countries that
will help with the tracing of the fugitives. So, it is not that they
(Interpol) are ineffective, what we need is concrete information."
SUNDAY, AUGUST 1, 2010
Rwodzi, Mujuru-Interfin Bank axis of looting, and money laundering
Interfin Bank Chairman Farai Rwodzi and his business associates Vice President Mujuru and her husband Retired General Solomon Mujuru have various interests in just about every sector of the Zimbabwe economy. In June 2005 a consortium representing the Mujurus headed by Farai Rwodzi and Adam Molai, respectively founder of the Interfin Merchant Bank and managing director of Savanna Tobacco Company took over Zimbabwe Alloys from Anglo American. It was the first mining investment fronted by Rwodzi which glossed over the mafia tactics used by Farai Rwodzi and Benscore Investments team to arm twist the Zim alloys workers who had been promised the Company by Anglo American.
The Mujuru family using various schemes ,tactics and individuals co-ordinated and fronted by Farai Rwodzi has been on an asset buying spree to launder and clean up their ill-gotten wealth. River Ranch is known colloquially as "Mujuru's mine". There But while Mujuru's ownership may be common knowledge, many other things about River Ranch remain in the shadows. The mine goes to the very heart of Mujuru's struggle for control of Zanu (PF) and allegations it is being used to launder some of the plunder he and his allies secured in DRC.
In April 2004 Mujuru controversially grabbed the mine with the help of Adel Abdul Rahman al Aujan, a millionaire Saudi real estate developer who also owns luxury beach resorts and safari camps in eastern and Southern Africa that operate under the name Rani Resorts. There are also persistent questions surrounding the company's 'official' production numbers. Although there is no definitive proof Mujuru is laundering Congolese diamonds, RRL's numbers don't tally.These tactics are well planned by the Mujurus to take mines and then launder proceeds from other controversial mines like DRC and Chiadzwa.
The Zim alloys workers were not happy about the new take over they had been promised a workers buy out. But those vultures got information from Tongai Muzenda that Zimbabwe alloys was up for grabs and had been promised to the wormers and management through a Management Buyout.The management and workers were cowed using various mafia intimidatory tactics of arrests, physical violence and false imprisonment.Farai Rwodzi, Interfin Bank and the Mujurus have refined the art of illegal asset takeovers and laundering the proceeds through Interfin Bank.This is the same tactic Mujuru used to take over River Ranch Mine and now his protégé and business front and partner Farai Rwodzi is reefing the art with additional help from Interfin Bank to make it look professional and above board.
In 2001 Mujuru became the subject of the first legal action against any member of Mr Mugabe's inner circle implicated in the illegal seizure of land and assets. His seizure of Alamein Farm was ruled illegal by the Zimbabwean Supreme Court.
Popular speculation is that he owns anywhere between six and sixteen farms, including Alamein farm, a productive and high-value operation illegally requisitioned as part of a "landgrab" from Guy Watson-Smith in 2001, as found by the Zimbabwe High Court and international courts.
Farai Rwodzi also got 5 workers arrested at Zimbabwe alloys in Gweru on false and fabricated charges in an attempt to silence them from opposing his bid for Zimabwe Alloys. Other employees were beaten up by ZANU PF youths hired by Farai Rwodzi when they resisted his take over of Zimbabwe alloys
Workers committee members then organised fellow workers to resist farai Rwodzi and Interfin's team. Farai Rwodzi personally went to Zimbabwe alloys with Tongai Muzenda and the next the 4 workers were arrested for various fabricated allegations. Others "vaingo robhwa vachiudzwa kuti muri Ve MDC munorambidza mwana wevhu kutenga company sei"
Vice President Mujuru's back ground is very relevant to the current looting spree spearheaded by Farai Rwodzi on her behalf.Before becoming vice-president, she was best known for blocking a bid to set up Zimbabwe's first mobile phone network in the early 1990s.This was seen as not only a money-earner but a threat to the government's control of information. As information minister, she managed to thwart Econet long enough for Telecel, rumoured to be part-owned by her husband, to set up.
She was also one of the biggest beneficiaries of a scheme set up to pay compensation to those injured during the war of independence. The scheme paid out huge amounts of public money - one of the sparks for Zimbabwe's subsequent economic collapse.
The Mujurus are accused of taking over at least one of the farms seized from their white owners in recent years. Guy Watson-Smith has taken Mr Mujuru to court to seek compensation after his farm was invaded by ruling party supporters. He says the famous couple are living on the 3,500-acre Alamein farm, 45 miles south of Harare. Mr Watson-Smith says the infrastructure alone was worth some $2.5m.He won a court order in December 2001 but is still trying to get either the money or the farm. The proceeds from such asset grabs are routinely sent to Interfin Bank for laundering purposes to hide any tracks of the preceeding illegal activities
Mr Mujuru is also a director of the River Ranch mine as described above, which has denied reports of it was trading in illegal "blood diamonds" from DR Congo. River Ranch affords Mujuru unfettered access to his own diamond resource - one that he has protected with ruthlessness.
Those who have borne the brunt of Mujuru's persecution are the Farquhar's and their immediate supporters. The couple has repeatedly been singled out for special harassment, including frequent imprisonments, house break-ins and death threats, in an attempt to force them to give up the mine.
The intimidation campaign took a very personal and tragic turn in February 2010, when Adele's brother, Richard Amyot, and his wife, Tecla, were murdered.
Police ruled it a murder-suicide but forensics done by the family disputed that finding. Tecla was shot four times, including once from close range at the back of her head while she was lying on the floor. Richard was found slumped in a door frame as though running from the room. He, too, was shot in the head, but from medium range. No gunpowder residue was found either on his hands or at the bullet's entry point.
Mrs Mujuru and her Husband have also been accused of trying to evade international sanctions by using her daughter to sell Congolese gold on her behalf. After their daughter was exposed Farai Rwodzi has taken the lead in trying to evade sanctions on behalf of the Mujurus and hide their ill-gotten gains.It is clear there is blood dripping money in this Rwodzi/Mujuru/Interfin Bank network which must be exposed at all costs. Interfin does not have any real and meaningful clients or bank business model. Its sole purpose is to launder proceeds of crime as in asset grabs, looted diamonds, corruption this is why Rwodzi was very quick to pay US$ 5.3 million for CFX Bank because it was a real bank with proper network systems and relationship with Money gram which Farai Rwodzi intends to use extensively in his money laundering operations. Moneygram should be aware of the reputational risk that will come with Interfin Bank's involvement with their brand.
POSTED BY ADMIN AT 5:48 PM 0 COMMENTS
SATURDAY, JULY 31, 2010
Greed and Corruption - Farai Rwodzi and Interfin Bank path to ruin
Greed and Corruption - Farai Rwodzi and Interfin Bank path to ruin
As the Century/CFX-Interfin Commercial Bank (IBC) dispute continues it is necessary to keep track on how this has been developing. When Finance Bank of Zambia backed by Credit Suisse pulled out of their planned investment from CFX Bank after confirming the share ownership dispute it became clear CFX Bank brand needed to resolve the ownership dispute. However the then CFX management and Shareholders connived with Farai Rwodzi and Interfin Bank Zimbabwe to try and hide the tracks of the fraud committed against me when the bank was seized from me.
It is important to note that any successor Institution which will take over Century/CFX Bank assets and Infrastructure and ZSE seat will continue to have this Ownership wrangle stigma until the matter is amicably resolved.Farai Rwodzi and Interfin Bank by trying to lauder this fraud and covering up the illegal asset seizures have opened themselves to severe reputation risk which will affect their operations and ability to do business beyond Zimbabwe. Below is a note I prepared in 2009 in response to some propaganda from the THEN Government of Zimbabwe,CFX lawyers and Shareholders who were working in cahoots with Farai Rwodzi and Interfin Bank Zimbabwe preparing to sanitize their then anticipated takeover of my Bank CFX Bank -Zimbabwe-
"The Government of Zimbabwe's attempted frivolous rebuttal to ENG Capital's legitimate claim actually confirms ENG Capital's ownership of the disputed 309 million shares and ownership of Century/CFX Bank. Their only purported defence is that you should have complained earlier or you are specified so you cant do anything about it. This is just hiding behind technicalities without any real or meaningful response to a legitimate claim.
It is common knowledge that I was detained, arrested ,tortured and specified. The legal counsel Mr, Ziweni, whom I hired to represent ENG Capital, suffered the same fate, was arrested, harassed, intimidated, specified and unfortunately died under mysterious circumstances.
As I languished in remand prison, the RBZ Governor, Gideon Gono, embarked on an orgy of ENG Capital asset stripping and with the assistance of the body politic gained political mileage with a sustained Muponda vilification crusade. As part of this asset stripping the 309 million shares were "bought" by Gono's front Network Investments , Kwangari Enterprises and others.
Zimbabweans were made to believe that ENG was bankrupt and that its only assets were expensive cars. To the contrary ENG was a solid financial services company which owned a bank - Century and had other tangible assets that far exceeded the liabilities, concocted by Gideon Gono. The rebuttal by the Government's lawyer confirms ENG Capital owned Century/CFX Bank.
Please note that the very person, Gideon Gono, who declared ENG bankrupt, is the same person who sought my specification and is the same person who then authorized the disposal of the 309 million shares. This same person was also the beneficiary of the irregular disposal of the 309 million Century /CFX shares in collusion with the Zimbabwe Stock Exchange who violated various regulations meant to protect investors in a public company.
The government further claims that, "The transaction was done in 2004", and "in terms of the Prevention of Corruption Act, Muponda is not able to conduct any material transaction on his behalf in respect of any companies he has invested in."
The above statement assumes that I seek relief and am pursuing my claim through the compromised and tainted Zimbabwean judicial system, which the same system is willing to be used by corrupt politicians to punish the innocent while sanitizing financial fraud by elected officials. This partisan court system was the same used strip me of my legal rights and used to brand me a criminal without due process or the prospect of Habeas corpus.
As you maybe aware I am seeking the return and or compensation for 309 million Century Holdings Shares which were fraudulently and corruptly sold to a group of politicians including RBZ Governor Gono, Ministers Goche and Gumbo. They were sold to their investment consortium which had several shelf companies including Kwangari Enterprises and Network Investments. The sale of the shares was done on or about 12 May 2004 through a pre-determined and fixed price transaction called a special bargain. As a result the current CFX Bank is a product of fraudulent merger of Century Bank (owned by my company ENG Capital) and a much smaller CFX Bank which somehow got naming rights on the resultant Bank. This "merger" was just to hide the corruption and fraud.
It is clear that the asset looting and expropriation in Zimbabwe is being done by senior Government Officials directly or indirectly through fronts. This is why some targeted sanctions have been applied on some of the politicians because they need to be stopped from their attempts to launder the proceeds from businesses they have looted and unjust enrichment schemes must be stopped. Those who are acting as their fronts, associates and conduits need to take note.
As I have said there is an illusion and fallacious assumption that I wont be able to take action in Zimbabwe but depositors and investors must be cautious , be realistic and don't take chances. '
This remains accurate. Farai Rwodzi and Interfin Bank will be exposed for what they are - a mone,asset and transaction laundering masquerading as a Bank.
POSTED BY ADMIN AT 8:02 PM 0 COMMENTS
FRIDAY, JULY 30, 2010
Rwodzi & Interfin arrogant ,corrupt and generally greedy
There is need to clarify the root of the current dispute between Mr Farai Rwodzi of Interfin Bank Holdings Zimbabwe and myself. Mr Farai Rwodzi has become one of Zimbabwe's leading robber barons by his greedy business behavior which has seen him being involved in every sector of the Zimbabwean business using political muscle and connections whilst arm twisting competitors and laundering the transactions to appear clean, legal and legitimate.
On 5 November I personally wrote to Mr Farai Rwodzi,Mr Raymond Njanike and Interfin Directors and share holders to stop meddling in the Century/CFX Bank.I clearly advised them not to invest in or buy Century/CFX Bank until the Bank ownership dispute is resolved.But because Mr Farai Rwodzi and Interfin Bank Zimbabwe are corrupt bullies who are greedy and believ they are above the law because of political connections they went ahead and took over the Bank and have now renamed my bank Interfin Banking Corporation in an effort to hide their takes of buying stolen property and trying to launder the deal to appear clean and legitimate.
The letter I wrote was widely circulated.It appeared on various newspaper including but not limited to www.Zimbabwe Metro.com ,www.zimeye.com ,www.zimguardian.com ,www.zimtelegraph.com and other newspapers .
The letter was clear and self explanatory.For the easy of reference I have attached the full version of the letter below .
"Letter to Interfin Bank Shareholders
Posted on November 5, 2009 | Category: Press Articles
The Shareholders
Interfin Holdings Limited
15th Floor, NSSA Building
Cnr Sam Nujoma St/Julius Nyerere Way
HARARE
4 November 2009
Attention: Mr. R. Njanike
Dear Gentlemen and Lady,
RE : PROPOSED INTERFIN ACQUISITION OF MY BANK - CENTURY/CFX BANK LIMITED
I refer to various media reports which suggest Interfin Holdings Limited plans to acquire a 51% stake in My Bank Century/CFX Bank. Further reference is made to the letter from my lawyers Gutu and Chikowero Attorneys at Law dated 2 November 2009 and my letter of yesterday to your Board of Directors. The purpose of this letter is to warn Interfin Financial Holdings Limited not to interpose itself in the CFX ownership dispute as you may regret that transaction. Interfin should not meddle in this as the consequences will be dire.Finance Bank of Zambia and its Swiss Financiers pulled out of this transaction because of the unresolved ownership dispute.How can Interfin ignore this?
(1) Current CFX Bank lawyers a flaunting around their "legal opinion" as fact. Firstly CFX Bank lawyers are compromised as they can not provide an Independent legal opinion in a matter in which they have an interest since they are representing the respondent. They have a conflict of interest and should have recused themselves in providing the legal opinion. It appears as though they just provided this "legal opinion" to earn fees knowing fully well that their opinion in this matter was not even worth the piece of paper it was written on.
(2) Their purported legal opinion is rather misplaced and misdirected in as much as it seeks to analyze current ENG legal status .The current status is immaterial since we are trying to correct fraud and theft which resulted in ENG being incapacitated.
(3) Further CFX Bank Lawyers are assuming that since I remain specified in Zimbabwe therefore I have no capacity to vigorously pursue this matter. This is fallacious and ill advised .I hope the same lawyers are aware that Financial markets do not operate in a vacuum and in the bigger scheme of things Financial markets are not controlled from Harare. As indicated previously no stone will be left unturned till justice prevails on this matter. This means all legal options are on the table and legal action is being pursued in several jurisdictions.
(4) CFX Bank lawyers are further peddling a tired lie that the shares were being sold to pay off ENG creditors. This totally ignores where the matter started and how it developed into a crisis. The original and official allegation was that ENG Capital was a brief case Company which had no meaningful assets. ENG and Myself were further demonized and smeared, that the only visible assets acquired were cars. Shouldn't CFX Lawyers be addressing this anomaly. How can a brief case Company own 309 million shares in a Bank. How come the public was not clearly told that ENG owned a Bank .Why was there over focus on cars which made up less than 1% of ENG's Capital base? Assuming for one moment that ENG had real problems ,why wasn't it well advertised that even though ENG was having problems it owned a Bank and bidders would be invited to take over that Bank and pay a fair price? Why was the disposal being done clandestinely and under cover of darkness?
(5) ENG was sufficiently liquid and solvent to meet its liabilities but despite all this its cheques were being bounced and dishonored. This act alone of bouncing and dishonoring cheques of a Financial Institution creates panic and an impression of a Bankrupt Institution. It must be noted that First Mutual Life and National Discount House, being ENG counter parties in fact sued Zimbank for irregularly dishonoring ENG cheques at a time when the ENG account was fully funded and had sufficient funds to meet its liabilities. This clearly confirms a well calculated campaign to close down ENG and grab its assets.
(6) I am sure you were told that ENG CAPITAL had many cars, and these cars were the only assets that ENG had. The correct and accurate facts are that ENG was a Group of Companies of which the Companies had Directors, Managers and employees and the cars were for the use of these members of staff who ran the various companies which made up ENG CAPITAL.
(7) ENG Capital group had a market value of US$ 175 million, just before the RBZ descended on the Institution.
Below is a brief ENG Group Structure ;
ENG HOLDINGS GROUP STRUCTURE
- SUBSIDIARIES
- ENG CAPITAL INVESTMENTS PVT LTD
- ENG ASSET MANAGEMENT PVT LTD
- ENG REAL ESTATE
- ENG NOMINEES PVT LTD
- ENG PRIVATE EQUITY (PVT) LTD
- ENG CAPITAL ADVISORY SERVICES
- ENG STRUCTURED FINANCE
ADDITIONAL MAJOR ASSETS OWNED
- Century Bank Holdings (now CFX bank)
- Leasing Company of Zimbabwe, (Century Asset Managers)
- Century Discount House
- Hybri Micro-Finance Institution
- Care Insurance PVT LTD
- RestCel Insurance PVT LTD
- Amalgamated Health Services (Harare West Hospital )
- 15% of OK Zimbabwe Limited
- 15% of Zimplow Holdings Limited
- 20% Medtech Holdings Limited
- Hornet Re-Insurance PVT LTD
- Pearl Pension Fund Management
- 25 % Clan Holdings Limited
- 25 % Zimbabwe News Papers Group - Zimpapers Limited
- Allied Conveyor Belts PVT LTD
- River Drilling PVT LTD
- Real Estate including (Anastasia Court, Belgravia House, Thaine Building)
- Various Listed ZSE Listed shares
- Treasury Bills
- GMB Bills
- Cargill Commercial Paper
- $ 4 billion - Alliance Capital Debenture (representing 123 million First Mutual Life shares)
- 23 Million First Mutual Life shares
This is relevant as it proves beyond any doubt that ENG was a solid Group of Companies. It was targeted out of greed by plotters including Senior Politicians who wanted to loot and grab assets.
(8) This mêlée was nothing more than a ploy to infringe upon my citizenship rights and strip me of my assets; a well orchestrated political game to deny perceived enemies of Senior Politician's financial freedom.
(9) My battle against civil asset forfeiture is one for the preservation of freedom and property. This is an important area as Zimbabwe seeks to portray an image of a stable state with the rule of law and private property rights are protected and preserved.
(10) All facts indicate to a grand miscarriage of Justice.
(11) A miscarriage of justice occurred as ENG and its directors now bear the burden of proving their innocence. The preponderance of evidence, which means that the RBZ only must make a better case - however slight, than the property owner - ENG.
(12) The 309 Century Financial Holdings Limited Million shares in question were sold through Fidelity Stock brokers on or around May 13, 2004. Within the same week an announcement was then made that CFX Bank was taking over Century Holdings. The shares were sold to a Senior Politician's reported consortium for Z$2,9 billion when ENG had spent $35 billion to accumulate the shares, thereby prejudicing ENG, Creditors, Investors and contributories of at least Z$32,1 billion.
(13) As ENG Co-founder, Contributory and Shareholder, I wrote to the Zimbabwe Stock Exchange Chief Executive Mr Emmanuel Munyukwi asking for an investigation because we had agreed with the majority of creditors that the shares should not be sold but rather swapped with creditors and investors instead of selling them at an unreasonable price. But the 309 million Century /CFX Financial Holdings million shares were somehow clandestinely sold and that transaction enabled CFX Bank to take over Century Holdings Limited.
(14) This allowed the reverse listing of CFX Bank on to the Zimbabwe Stock Exchange. Without those 309 million Century Holdings Limited million shares owned by ENG the CFX/Century merger would have never happened. Senior politicians and their proxies became the new controlling shareholder of the new merged bank. Is this by design or accident? Senior politicians then forced out Mr. Sean Maloney who had helped to put together the transaction. Mr. Sean Maloney had to leave the country under unclear circumstances . Part of the same shares snatched From ENG were later transferred to Premier Bank Financial Holdings which is reportedly owned by a Senior Politician. There has generally been shuffling of shares which is normally associated with covering tracks of an illegal and irregular transaction.
(15) ENG directors and contributories asked the high court to set aside the sale of the shares and the matter action is still before the courts in Harare. We asked Zimbabwe Stock Exchange Committee to investigate. They refused. We asked the brokers for the identity of the buyer of our shares. They refused. The brokers indicated they were under serious pressure from individuals they couldn't identify to maintain total secrecy on the identity of the buyer. Within a few days of raising the challenge of the CFX/Century shares Justice Minister specified me without affording me a hearing or an enquiry as required by the Constitution of Zimbabwe . There was specification at the instigation of senior politicians who were eyeing assets held by ENG including Century/CFX Bank. The specification was meant to harass, cow, intimidate and silence me from raising further complaints and challenges regarding ENG assets specifically these 309 million shares in Century/CFX Financial Holdings.
(16) Since the ENG shares in Century /CFX Bank Financial Holdings were irregularly transferred the Bank ownership remains in dispute. The ENG shareholders and contributories filed and sought a high court order to stop the transfer of the shares until the dispute had been resolved . The shares were still clandestinely transferred despite the pending high court application to resolve the dispute . After filing for this order My Lawyer the late Oscar Ziweni was also specified by the Minister of Justice and threatened ,harassed and intimidated until he went into hiding. However the point remains ENG Founders, Shareholders and Contributories still lay claim to these shares and stake in Century/ CFX BANK which were looted by Senior Government officials.
In conclusion Interfin Holdings Limited should consider itself warned. Interfin should stay clear of CFX Bank until this matter is resolved. There are entities and individuals in Zimbabwe who erroneously believe they are above the law. They have the mistaken belief they can grab, loot, steal assets and get away with it. In the process they try to launder their loot through various disposals and restructurings such as the ones that were done at Century/CFX Bank. This is being fully documented. CFX Bank has had more than 5 Managing Directors in a space of 2 years .This shows the instability brought about by being a disputed asset whilst the looters try to pull " strings" from behind the scenes.
For the sake of transparency I am copying this letter to the following ;
Minister of Finance Zimbabwe
Reserve Bank of Zimbabwe Governor - Dr Gono
Zimbabwe Stock Exchange CEO - Mr Emmanuel Munyukwi
CFX BANK Board of Directors
Zimbabwe Parliament -Budget, Finance and Investment Promotion Members Below
Hon Zhanda , Hon. Beremauro, Hon. Bhebhe A, Hon. Chinyadza, Hon. Cross, Hon. Khumalo ,M Hon. Madzimure, Hon. Mashakada, Hon. Matshalaga, Hon. Mudiwa, Hon. Muguti, Hon. Mukanduri, Hon. Ndava, Hon. Nyaude. Committee Clerk- Mr Ratsakatika
My full contact details are below should you need any clarification.
Yours Faithfully,
Gilbert Muponda
Toronto ,Canada
1-416-841-5542
1-647-994-5542
Email - gilbert@gilbertmuponda.com
http://www.facebook.com/muponda
Skype ID - gilbert.muponda
THURSDAY, JULY 29, 2010
Exiled businessman warns Farai Rwodzi & Interfin Bank Zimbabwe over its takeover of disputed bank
http://www.swradioafrica.com/News290710/exiled290710.htm
By Lance Guma
29 July 2010
An exiled Zimbabwean businessman, who says his bank was illegally seized by the government in 2004, has condemned the recent takeover of that same institution by Interfin Financial Services Limited.
Gilbert Muponda says he owns Century Bank through his ENG Capital investment company, but was forced to flee the country at the height of a controversial crackdown on the financial sector in 2004.
Prominent businessmen like James Makamba, Mutumwa Mawere, Nicholas Vingirai and James Mushore, among others, were persecuted on various allegations, including black market trading.
Six years down the line Century Bank now known as CFX Bank has been taken over by Interfin Bank. A furious Muponda told Newsreel; 'Interfin is now liable to my claim due to their attempt to cover up the ownership dispute by rebranding and changing CFX Bank operations. This is clear money and transaction laundering being executed by Farai Rwodzi and Interfin Bank." Rwodzi is the CEO.
In November 2009 Muponda successfully used an internet campaign to block a major financial institution from buying the disputed bank. One of the world's biggest banks, Credit Suisse, through the Finance Bank of Zambia, had sought to buy the struggling CFX Bank.
But using an aggressive internet campaign dubbed 'Return Muponda's Bank' he made enough noise to scare Credit Suisse away from the deal. Internet banners picked up by Google, plus letters and articles circulated online, were enough to finally discourage the deal from going through.
When Muponda and his colleagues left the country there was a belief that they had engaged in underhand financial deals, including running away with investor's money. But on Thursday he told us the government at the time was desperate to find scapegoats in the business community, to blame for the country's economy collapse. "I was turned into a corruption poster boy and spent 4 months in prison without trial,' he said.
So what was the case all about? Muponda said; "We did not have a political godfather. Despite claims we stole people's money and did not have assets to pay them back, we got bail in court after proving the company had Z$200 billion in assets against total liabilities of Z$61 billion. After being granted bail I was told I could start the company again but only if we got a political godfather within ZANU PF."
Muponda, through his lawyers, has now written to the new owners of the bank telling them the transaction will expose them to 'reputational risk'. He said that warning is still in force as he seeks compensation for his shares 'fraudulently' seized. He said CFX Bank was struggling to mobilize sufficient business to return to profitability because 'all market participants in Zimbabwe are fully aware of my claim and the high reputational risk that comes with ignoring the claim.'
http://www.swradioafrica.com/News290710/exiled290710.htm
POSTED BY ADMIN AT 5:17 PM 0 COMMENTS
WEDNESDAY, JULY 28, 2010
Rwodzi and Interfin Bank refining the money laundering art
Interfin Bank Zimbabwe and Founder Mr Farai Rwodzi are attempting to sanitize and launder their take over of a disputed asset/Bank. The company controversially acquired a controlling stake in the disputed Century/CFX Bank last year after shareholders of the financially-distressed banking institution either ignored or failed to take up their rights in a $10 million equity offering underwritten by the acquirer. CFX Bank became distressed after negative publicity emanating from my claim and legal action I was pursuing after 309 million Century Bank Shares I owned through my Company ENG Capital were fraudulently transferred and converted at the time of the merger between CFX Bank and Century in 2004
In money laundering, the proceeds of crime are run through the financial system to disguise their illegal origins and make them appear to be legitimate funds. In this case Interfin took over a disputed asset as in buying stolen property and are trying to clean up the transaction and remove any trace from the initial fraud that was committed against me.
The 309 million Century Bank Shares I owned through my Company ENG Capital were fraudulently transferred and converted at the time of the merger between CFX Bank and Century in 2004 and Interfin Bank proceeded to take over CFX ignoring the disputed ownership of FCFX Bank and the attendant reputational risk. I even wrote to Credit Suisse to dissuade them from taking up shareholding in CFX FS. Credit Suisse has 40% shareholding in FBZ.
The ownership dispute was triggered by the special bargain sale of 309,000,000 shares on 12 May 2004 but the total shares claimed by me and my Company is 900,000,000 the balance was transferred in peace meal fashion to avoid detection of the fraud and transaction laundering that was being perpetrated. CFX was nothing more than a forex trading shop which was used to swallow Century Bank as a cover up of the illegal seizure of the Bank. I lost Century Bank shares owned through ENG Capital after they were "fraudulently" converted into CFX Bank which took over Century Bank assets and Branch network.
Money laundering is not a single act but is in fact a process that is accomplished in three basic steps. These steps can be taken at the same time in the course of a single transaction, but they can also appear in well separable forms one by one as well.
Although money laundering often involves a complex series of transactions, it generally includes three basic steps.
The first step is the physical disposal of ill gotten cash/asset. This Interfin have done by handing over CFX bank licence to the RBZ whilst holding on to the assets ,infrastructure and network from the disputed CFX Bank This placement might be accomplished by depositing the cash in domestic banks or, increasingly, in other types of formal or informal financial institutions.
The second step in money laundering is known as layering, carrying out complex layers of financial transactions to separate the illicit proceeds from their source and disguise the audit trail. This phase can involve such transactions as the wire transfer of deposited cash, the conversion of deposited cash into monetary instruments (bonds, stocks, traveler's checks), the resale of high-value goods and monetary instruments, and investment in real estate and legitimate businesses, particularly in the leisure and tourism industries. This has already been done through a celebrated stock markert listing.This may later haunt the ZSE as it may develop a reputation on money laundering listings such as this one by Mr Farai Rwodzi and Interfin Bank Zimbabwe
Interfin Holdings reverse listed on the Zimbabwe Stock Exchange (ZSE) using the infrastructure and legal structure taken over from my bank.
Interfin Holdings is currently the holding company of Interfin Merchant Bank, Interfin Securities, a stocks trader on the ZSE, Interfin Asset Management Limited and Altfin Holdings Limited. This structure easily enables money laundering with Interfin appearing to be a legitimate business.The key to this is that this is not the first or last questionable transaction which Interfin have done.
Altfin Holdings is a holding company for a portfolio of insurance units that include the flagship operation, Altfin Insurance, a short term insurance company in Zimbabwe that has a presence in sub Saharan Africa, and Altfin Life, a life assurance business recently added to the group. Given the current attempt to launder the CFX transaction one wonders what else has been laundered through Interfin. What else has been hidden and passed out as clean and honestly earned money.
The last step is to make the wealth derived from the illicit proceeds appear legitimate. This is what Interfin and Mr Farai Rwodzi are trying to do by reverse listing their Interfin Banking Corporation (IBC ) whilst killing the original CFX Bank brand.This integration might involve any number of techniques, such as using front companies to "lend" the proceeds back to the owner or using funds on deposit in foreign financial institutions as security for domestic loans. Another common technique is over-invoicing or producing false invoices for goods sold--or supposedly sold--across borders. This appears to be another technique that Interfin is mastering with their reported Namibia and "International" expansion.
All the qualities,hallmarks and acts of a money laundering scheme are present in the Interfin model and the reverse listing by taking over CFX Bank and discarding its license and brand whilst taking over its assets, infrastructure and ZSE listing spot on the bourse. The following clearly happened at the direction of Mr Farai Rwodzi and other shareholders need to be aware of the on going reputational risk that will come with transactions of this nature.
* the need to conceal the origin and true ownership of the proceeds;
* the need to maintain control of the proceeds;
* the need to change the form of the proceeds in order to shrink the huge volumes of cash generated by the initial criminal activity of corruption and influence peddling.
Whilst Mr Farai Rwodzi and Interfin may get away with the listing on the ZSE for now in the long run they will have huge reputational risk emanating from the CFX Bank ownership dispute which they are trying to sweep under the carpet and rename and rebrand the problem.
This article appears courtesy of GMRI CAPITAL - www.gmricapital.com . It is original content generated for 3MG MEDIA.
Gilbert Muponda is an Investment Banker and Founder of GMRI CAPITAL . He can be reached at; www.ZimFace.com and www.facebook.com/muponda
Email: gilbert@gilbertmuponda.com . Skype ID: gilbert.Muponda
Twitter ; http://twitter.com/gmricapital
Phone: 1-416-841-5542
POSTED BY ADMIN AT 8:52 PM 0 COMMENTS
TUESDAY, JULY 13, 2010
Advisory note to Farai Rwodzi,Interfin Directors and Shareholders
Posted on September 14, 2010 | Category: Letters on CFX Bank Zimbabwe
The Board of Directors
Interfin Holdings Limited
15th Floor, NSSA Building
Cnr Sam Nujoma St/Julius Nyerere Way
HARARE
10 September 2010
Attention: Mr. R. Njanike
Dear Gentlemen and Ladies,
RE - PAYMENT CLAIMS BY INTERFIN CHAIRMAN MR FARAI RWODZI
Previous communication in the above matter refers.In particular my letter dated 3 November 2009
It has been brought to my attention that Mr, Farai Rwodzi, the chairman of Interfin Holdings limited, claims to have paid the sum of USD5,3 million last month to Mr. Gilbert Muponda allegedly for the equity held by Mr. Muponda in Century Bank/CFX Financial Services Limited. I categorically deny that I was paid the sum of USD5,3 million nor any amount at all by your company. Interfin owes me US $ 15.4 million. (Please refer to page 11 of the Newsday newspaper edition of Thursday August 26, 2010). The website link is here http://www.newsday.co.zw/article/2010-08-25-interfin-acquires-13-of-starafrica "The company last month paid Gilbert Muponda $5,3 million for equity allegedly transferred to the acquirer irregularly during the merger, but is still to reach common ground with former CFX employees, who have sued over wage arrears and severance packages." This is not true or correct.
Interfin Holdings in fact owes more than the US$ 5.3 million which Mr Rwodzi claims to have paid .The exact amount which is outstanding is US $ 15,450,000.00 ( Fifteen million Four hundred and fifty thousand dollars) .This is made up of 309 million shares multiplied by the value of each share which was $ 0.05 ( 5 us cents per share).This amount of US $ 15.45 million remains outstanding and due to me and ENG Capital
This is a well documented case of 309 million shares I owned in Century Bank were fraudulently ,corruptly ,illegally and irregularly converted into CFX Bank then into Interfin Banking Corporation. An attempt was made to sell and transfer the same 309 million shares on or about 4 May 2004.
As rightful and legal owner through ENG Capital major shareholder and contributory I approached the high court objecting to the transfer of the 309 million shares action which automatically nullifies trading in those shares until the matter is ruled on. This matter is still before the High Court in Harare. My lawyers Gutu and Chikowero Attorneys at Law will furnish you with a complete document package .
Interfin Holdings has 2 options in the matter.
1 - First option is to pay the US $ 15.45 million or make a serious cash offer and close the matter.That is 309 million shares at 5 cents each.
2 - The second option is to issue 309 million shares in Interfin Holdings to me and ENG Capital.At that point Interfin becomes an ENG Capital subsidiary since ENG will be the majority shareholder.
My intentions are to recapture my shares in Century / CFX Bank or to amicably compel Mr Rwodzi to pay me for my 309 million shares in Century/CFX Bank, which he has converted to Interfin Bank. Failure to which I shall have no choice but bring to bear on Mr Rwodzi ,Interfin Bank Zimbabwe and all other associated business entities all forensic accountants, attorneys, investigative journalists, regulators, domestic and international law enforcers.
We await your urgent response to this serious matter.
Regards,
Gilbert Muponda
Complaint against Meikles Chairman Farai Rwodzi on CFX/Interfin Bank Zimbabwe
The Board of Directors
Meikles Africa Limited
Business Address and Registered Office
P.O. Box 3598, Harare, Zimbabwe
99 Jason Moyo Avenue, Harare, Zimbabwe
Telephone +263-4-252068-78
Telefax +263-4-252067
Dear Gentlemen
RE - Letter of Complaint against Meikles Africa Chairman Mr Farai Rwodzi on CFX/Interfin Banking Corporation Zimbabwe
I write this letter to respectfully bring to your attention, and to seek your timely arbitration in a serious matter involving the Meikles Board Chairman, Mr Farai Rwodzi, Interfin, CFX/Century Bank, and myself.
It is my submission that Mr Rwodzi has been engaged in unfair business and trade practises that include business conspiracy and tortious interference with the CFX/Interfin merger.This is a well documented my 309 million shares I owned in Century Bank were fraudulently,illegally and irregularly converted into CFX Bank then into Interfin Banking Corporation which is chaired by Meikles Africa Chairman Mr Farai Rwodzi.
I therefore humbly implore the Meikles Board of Directors and audit committees as part of their fiduciary duties to conduct confidential internal investigations in the range of the matters I have raised, including financial and accounting irregularities affecting the Interfin/CFX/Century transaction and business conduct of Mr Rwodzi.
It is my further submission that Mr Rwodzi erroneously, or deliberately omitted to notify the Meikles board of improper actions regarding Interfin's acquisition of CFX banking assets that belong to me and my company ENG Capital.On 25 Mr Rwodzi willingly and misleadingly caused the Newsday Newspaper to falsely write that Interfin Bank had paid me US $5.3 million for my equity in CFX Bank. The website link is here http://www.newsday.co.zw/article/2010-08-25-interfin-acquires-13-of-starafrica "The company last month paid Gilbert Muponda $5,3 million for equity allegedly transferred to the acquirer irregularly during the merger, but is still to reach common ground with former CFX employees, who have sued over wage arrears and severance packages."
This was misleading to regulators,shareholders,investing public creating an inaccurate impression I had received money which I was refusing to acknowledge.It is unbecoming for Chairman of a leading Firm such as Meikles Africa Limited to seek to mislead the regulators and investors by making such fabricated public statements .
Interfin Holdings in fact owes me more than the US$ 5.3 million which Mr Rwodzi claims to have paid .The exact amount which is outstanding is US $ 15,450,000.00 ( Fifteen million Four hundred and fifty thousand dollars) .This is made up of 309 million shares multiplied by the value of each share which was $ 0.05 ( 5 us cents per share).This amount of US $ 15.45 million remains outstanding and due to me and ENG Capital.
This is a well documented case of 309 million shares at 5 cents each which I owned in Century Bank were fraudulently ,corruptly ,illegally and irregularly converted into CFX Bank then into Interfin Banking Corporation. An attempt was made to sell and transfer the same 309 million shares on or about 4 May 2004.
Meikles may have inadvertently exposed itself to reputational, legal, and commercial risks by having inadequate policies and procedures that prevent and detect corrupt and fraudulent practises elsewhere by its Chairman.
I do not have any ill feeling towards Mr Rwodzi or Interfin Bank Zimbabwe.All I have asked them is to seek an amicable conclusion to the matter.I have personally called Mr Rwodzi and my lawyers have officially written to Interfin seeking an amicable solution but all these efforts have been spurned forcing us to publicise what should otherwise be a private and confidential matter.
My intentions are to recapture my shares in Century / CFX Bank or to amicably compel Mr Rwodzi to pay me for my 309 million shares in Century/CFX Bank, which he has converted to Interfin Bank. Failure to which I shall have no choice but bring to bear on Mr Rwodzi ,Interfin Bank Zimbabwe and all other associated business entities all forensic accountants, attorneys, investigative journalists, regulators, domestic and international law enforcers.
We await your urgent response to this matter.
Regards,
Gilbert Muponda
Muponda scared off CFX suitors -- Interfin
By MUNYARADZI MUGOWO
Interfin Holdings Limited, a diversified financial services company that took over CFX Financial Services Limited (CFXFS) in July, has accused Gilbert Muponda, a former director of liquidated ENG Capital Group, of setting out to "rubbish" its brand and scare off the banking institution's international partners, including MoneyGram International.
Muponda alleges Interfin "stole" his shares in the process of merging with CFXFS, claims that are not backed by ENG Capital's liquidation papers.
In an interview, Interfin managing director Raymond Njanike said Muponda has written to MoneyGram International other international partners and potential investors claiming they were dealing with an institution "that had looted and grabbed assets".
"We are really concerned with the onslaught because it rubbishes our brand," Njanike said.
According to Njanike, Muponda claims that earnings from diamond sales amounting to $30 million that allegedly disappeared from government coffers also "found their way to Interfin".
"The truth is the money that we hold is a $2 million money market investment by the Zimbabwe Mining Development Company (ZMDC). Our strategy is to court cash-rich companies such as insurance companies and diamond companies. I wonder where Muponda is getting all that from."
Njanike said Muponda last year scared off three foreign investors who wanted to buy into CFX, including Finance Bank Zambia (FBZ), which planned to acquire 40%.
CFXFS shareholders decided to rope in investors to raise funds to meet the Reserve Bank of Zimbabwe's minimum capital requirements.
FBZ pulled out of negotiations at the last minute after Muponda personally wrote letters claiming that they risked sinking their money in a deal involving a "stolen" bank.
Through his lawyers, Gutu Chikowero and Partners, Muponda allegedly threatened legal action if FBZ and CFX proceeded to seal an off-taker deal, which was due to be finalised in November last year.
At the meeting, CFXFS was expected to decide on the offer by FBZ, which had the financial backing of Swiss Bank Credit Suisse.
After FBZ's pull-out, CFXFS resorted to a rights issue and appointed Interfin the undewriter. Interfin subsequently took a controlling stake in the bank after about 98% of CFXFS shareholders failed to follow their rights, resulting in the disputed merger.
"His strategy was to scare off potential suitors. He sacred off three foreign suitors. But as a local bank he realised that his strategy would not work against us. So he decided to attack the brand," Njanike said.
Muponda through a media website called www.zimtelegraph.com, a blog called muponda.blogspot.com and on twitter, has posted a number of statements challenging the CFXFS-Interfin merger and alleging that Interfin had "stolen" his bank.
One of the statements posted on muponda.blogspot.com reads as follows:
"By continuing to partner Interfin Banking Corporation despite knowing the disputed ownership of the bank, Moneygram is only confirming its blatant disregard of internationally accepted corporate responsibility expectations.
"MoneyGram International officers should have been far more alert to the perception that they might benefit from exploitation of their brand and reputation by doing business with Interfin Banking Corporation which includes an illegally incorporated entity CFX Bank.
"In my effort to recover my bank illegally seized from me when at least 309 000 000 and up to
900 000 000, Century Bank shares fraudulently converted into CFX Bank shares. The fraud was masked as a merger between Century Bank and CFX Bank but after the merger Century name was dropped to cover the tracks of the fraud (sic)."
NMB BANK Director arrested -
http://thebeardedman.blogspot.com/2007/10/saturday-27th-october-2007.html
"Police in Harare have arrested a fugitive banking executive who has been on the police wanted list for three years for allegedly contravening strict foreign exchange laws, state media said Friday.
James Mushore, a former deputy managing director of Zimbabwe's NMB Bank, was arrested Wednesday at his home in the posh suburb of Chisipite, police spokesman Wayne Bvudzijena told the official Herald daily.
"Investigations are still continuing," Bvudzijena said.
He told the Herald that Mushore was in police custody and would appear in court "soon."
Mushore and three other top NMB Bank officials fled Zimbabwe in 2004 after they were accused of siphoning around US$8 million (€5.6 million) out of Zimbabwe through a money transfer agency they set up in London."
It was hardly rocket science to drive to his house and arrest him, was it? If this was the master criminal as alleged, how come he wasn't arrested at the airport upon his arrival back into the country?
"Mushore took refuge in Britain, but apparently made several recent trips to Zimbabwe."
Whilst, interestingly, SW Radio Africa reports that the arrest was enabled for political reasons...
"There are claims that the protracted succession politics within ZANU PF are at the centre of the arrest of former NMB Bank deputy managing director James Mushore.
On Wednesday police in Harare arrested Mushore, allegedly over long-standing allegations of foreign currency externalisation.
But observers say Mushore has fallen victim to Robert Mugabe's loyalists because he is related to Mugabe's rival, retired army general Solomon Mujuru. Mujuru heads a faction angling to take over the ZANU PF leadership from Mugabe.
Mushore together with fellow NMB bosses, Julius Makoni, Otto Chekeche and Francis Zimuto, fled into exile in 2004 after they were accused of having violated the country's exchange control regulations. At the time, Makoni, Mushore and Zimuto collectively held over 35 percent of NMBZ through family trusts, making them the single biggest block of shareholders, ahead of institutional investor Old Mutual."
Which throws the Mugabe succession battle into the public domain as both sides will be throwing all manner of allegations at each other.
Once again, I feel that this is good news for the voting public, as the longer that the ruling party argue amongst themselves, the longer that the MDC has to stiffen their resolve to take the voting battle to ZANU PF. I do not talk of armed insurrection or public disobedience. The MDC needs to spend the time educating the voting public and spreading the word about living in Zimbabwe without the repressive rule of Mugabe.
Without that, Mugabe will walk all over the ballot box, if his party have not already rigged next year's election already...
"We understand that Mujuru is Mushore's uncle and we all know that there is some serious tussling for power between the retired general and Mugabe at the moment.
Speculations here have already concluded with some degree of reason, that he is a victim of his relationship with Mujuru and that the official allegation is just an excuse."
Mushore's ordeal and the New Zimbabwe we want
Posted on November 05th 2007
JAMES Mushore, one of three professionals who founded the first merchant bank controlled and managed by blacks in Zimbabwe, the National Merchant Bank of Zimbabwe (NMB), made history in 2004 when like the late Vice President Joshua Nkomo, he fled to the former colonial power, England, for fear of his life in post colonial Zimbabwe.
Like Nkomo before him, Mushore is passionate about Zimbabwe and his role as a trail blazer in the quest for black economic empowerment remains unshaken.
Together with Dr. Julius Makoni, whom I consider the father of black banking in Zimbabwe having pioneered the establishment of the first black owned bank in Zimbabwe, and William Nyemba, Mushore's place in black corporate history is secure and yet he finds himself behind bars for a crime that is difficult to explain to any rational person who is not a Zimbabwean.
The late Joshua Nkomo was the first icon to be a victim of the post-colonial state and he could find no refuge in the country that he had fought so hard to liberate. The accusations against Nkomo and his colleagues when critically examined are no different from the accusations against Mushore, Chris Kuruneri, James Makamba and others. Essentially, the allegations center on actions that are deemed to undermine national interest.
National interest, often referred to by the French term raison d'Etat is multi-faceted and is concerned with the state's survival and security as well as the pursuit of wealth and economic growth and power.
In early human history, national interest was usually viewed as secondary to that of religion or morality. To engage in war, rulers needed to justify their actions in these contexts. The primacy of national interest came later to dominate European politics and states found a convenient avenue to embark on wars purely out of self interest.
In the case of post-colonial Zimbabwe, the country is regarded by those who persecute their perceived enemies through prosecution as an independent polity with an identity jealously defined by the ruling elite as anything other than a vague geo-political and historical concept. The geography known as Zimbabwe is a politically and culturally diverse collection of polities and dependencies with no generally agreed and shared sense of common history, destiny or culture.
The Matabeleland region is just as culturally and historically Ndebele as is Manicaland just as Manyika. In such an environment, any strategic thought on national interest cannot be rooted in nationalist ambitions for glory or protection. What post-colonial Zimbabwe has advanced may be regarded as a ruthless political paternalism or a nationalised future even Nkomo could not have conceived of, borrowed liberally from and put to the service of self serving nationalist ambitions.
When Nkomo fled the country, his enemies now in control of the state could not have been motivated by a nationalistic sense of Zimbabwean-ness at heart. Rather it may have been motivated by a strategy to increase the power of the Great Leader for whom he worked as Minister of Home Affairs. In this case, it is arguable whether the reasons for Gukurahundi were real or manufactured for political expediency.
Zimbabwe, like many post colonial states, has failed to invest in an institutional framework to ensure that no despot - whether that despot be a single dictator, a political pressure-group (party) or a befuddled democratic majority of the moment - may usurp the powers of government, and turn its machinery upon any of its citizens, each and every aspect of government action is codified, and carried out, according to objectively defined laws.
In the case of Mushore, he is alleged to be guilty like Makamba, Kuruneri and others before him of a crime that does not exist in the statute books of the country. In the search of a universally agreed definition of externalisation, I searched on the internet and could find no description of the term as a crime. Such a crime only exists in Zimbabwe and can trace its origin to when Gideon Gono was appointed as Governor of the Reserve Bank of Zimbabwe. Prior to Gono's appointment, exchange control violations were civil rather than criminal offences and justifiably so.
In any free society each and every man ought to live under a rule of law as opposed to a whim-ridden rule of evil men. The rule of law should only have one purpose: to protect the rights of the smallest minority that has ever existed - the individuals like Nkomo, Mushore, Makamba and others.
Such a body of integrated, codified and non-contradictory laws should form objective legislation, which should ideally hold a man innocent until he can be proven guilty as opposed to a library of irrational regulations which hold a man guilty until he can somehow prove himself innocent, to the gratification of some idiot able to gain a foothold in public office.
Zimbabwe's still boasts of a constitutional order that is premised on the existence of democracy and the doctrine of the separation of powers. The supreme legal document of any proper society is ultimately its constitution - a citizen's protection against both private criminals and public officials who seek to imitate the criminal's methods.
The liberation struggle was primarily motivated by a just cause for just ends and yet Mushore finds himself in this year of the Lord in custody notwithstanding the fact that he has been granted bail by a Court of law while public officials try to pump life to a dead case.
Makamba, Kuruneri and Muderedi were there before, and we were all silent while the collective project to create a New Zimbabwe founded on the rule of law and not rule by law was being massacred by the few who are lucky and privileged to preside over the state.
The purpose of any constitution should not be to grant unlimited power to government or to limit the rights of an individual, but to limit the power of government to its only valid purpose, the protection of individual rights. In other words, a citizen should be free to do whatever he is not explicitly forbidden (under a proper legal system the only act forbidden is the violation of the rights); whereas, a public official is only allowed to carry out what is explicitly permitted.
Mushore is facing charges of authorising the illegal export of foreign currency during his time as Deputy Managing Director of NMB Bank in 2003. It is not clear from the state's case whether Mushore should in his personal capacity be culpable for an alleged offence that purportedly was to the benefit of NMB, a separate and distinct juristic person with its own rights at law. If Mushore is indeed guilty of the offence, then surely why would the state be selective?
Anyone who has followed the NMB saga closely will know that the bank has already been found guilty and fined for the same offence that Mushore finds himself charged with. In what kind of constitutional order would a citizen be accountable for someone's offence?
Mushore left the country in 2004 and it is reliably understood that he was assured that he would not be harassed by the state after the conviction of NMB. If Mushore was not patriotic and believed in his country, he would not have dared to come and face his accusers.
As President Mbeki tries to find a solution to the Zimbabwean crisis, it is evident that no lasting solution will take root as long the state operates above the law with impunity. Yesterday it was Kuruneri and today it is Mushore and tomorrow only the Reserve Bank knows. What kind of a society has Zimbabwe come to?
In trying to explain the root cause of the economic crisis, the government has chosen to target selected individuals as economic saboteurs whose actions undermine public interest. The Reserve Bank has been at the forefront of projecting the notion of public interest in policy debates, politics, democracy and the nature of the government itself. While the RBZ claims that aiding the common well being or general welfare is positive, there is little, if any, consensus in Zimbabwe on what constitutes the public interest to justify the actions perpetrated against people like Mushore.
There are different views on how many members of the public must benefit from an action before it can be declared to be in the public interest: at one extreme, an action has to benefit every single member of society in order to be truly in the public interest; at the other extreme, any action can be in the public interest as long as it benefits some of the population and harms none.
The public interest is often contrasted by the government with the private or individual interest, under the assumption that what is good for Zimbabwe may not be good for a given individual and vice versa. This definition allows people in government to "hold constant" private interests in order to determine those interests that they perceive to be unique to the public.
However, Zimbabwean society is composed of individuals with conflicting objectives, and the public interest must necessarily be calculated with regard to the interests of its members. It has now become evident that the notion of public interest as espoused by the government destroys the idea of human rights and it's about time Zimbabweans interrogated the degree to which the ends of society are the ends of its individual members, and the degree to which people should be able to fulfill their own ambitions even against the public interest.
The Mushore case provides yet another opportunity for Zimbabweans to reflect on what kind of society they want and begin to debate about policies rather than be preoccupied by State House politics at the exclusion of key institutional issues that help define and inform a progressive and developmental state. The debate ought to be elevated from personalities to the foundational aspects of the post-colonial regime.
Strive Masiyiwa spurns amnesty offer
http://www.zimeye.org/?p=8665
Published: September 1, 2009
Comment
(HARARE-ZIMBABWE)Despite government assurances of safety if he returned home, mobile phone mogul Strive Masiyiwa stayed away from Zimbabwe last Friday (Aug 28) when his company, Econet Wireless Holdings (EWH) held its annual general meeting followed by a major product launch, it has emerged.
Officials at Econet did not respond to e-mails sent to them about Masiyiwa's non-appearance nor could they shed light on whether or not the flamboyant businessman had addressed shareholders via live video link as he has done since he fled into exile in South Africa in 2004.
However, sources at Econet confirmed that Masiyiwa had not been seen at the company's Msasa, Harare headquarters where the AGM was due to be held or at the Meikles Hotel where the company launched its prestigious internet to mobile service known as 3G on Friday.
The government in June announced that it would pardon Masiyiwa and other businessmen and company executives who fled Zimbabwe in 2004 when Reserve Bank governor Gideon Gono launched a campaign against government critics disguised as an anti-corruption crusade. Masiyiwa was at that time owner of The Daily News which had just been banned by the authorities. The paper had its equipment, including a printing press and dozens of new computers confiscated.
Masiyiwa's media associate, Jethro Goko was, however at the Econet product launch last Friday and told a source that The Daily News would soon reappear after it was granted verbal guarantees by the information ministry.
In June, Deputy Prime Minister Arthur Mutambara said it was wrong for the authorities to continue persecuting Masiyiwa who is reputed to be Zimbabwe's richest black man with interests in telecommunications, banking, tourism and many other sectors, operating through front men. His mobile phone company recently surpassed the million subscriber threshold.
Masiyiwa, a known associate of Econet chairman Tawanda Nyambirai is also said to be the force behind Nyambirai's TN Bank and a major shareholder in the RTG hotel group through links with the group's chairman Patterson Timba.
Mutambara said at the time that a way must be found to make the charges against Masiyiwa go away. Others mentioned in the amnesty proposal made public at a re-branding conference are former Barbican Bank founder Mthuli Ncube, who is now a professor of business at Wits University in South Africa, former NMB Bank executives Julius Makoni and James Mushore, Telecel chairman James Makamba and ENG director Gilbert Muponda. Muponda recently wrote to Prime Minister Morgan Tsvangirai accusing Gono of victimizing him and others in order to take over their businesses.
It was not clear if a formal offer had been made to Masiyiwa. So far the authorities have failed to strip him of leadership of Econet as current laws do not forbid anyone from running a business from outside the country. However, new corporate governance regulations being mooted will make it mandatory for company heads to appear physically at board meetings at least four times a year. (ZimEye, Zimbabwe)
Zanu PF gate keepers of white capital
19/09/2010 00:00:00
by Tendai Biti
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Responding to Manheru ... Tendai Biti
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Afflictions of a messianic complex
NATHANIEL MANHERU'S article published in the Herald of September 4, 2010, titled"Privileged proletarians: when the beautiful ones are not yet enough" makes interesting reading.
To be fair to him, his articles are a must-read for the simple and good reason that they betray the inner thinking of the more informed components in Zanu PF.
Of course, his writing style is loquacious and prolix which is typical of university students of his generation who thought that big words and verbosity are a sign of superior intellect.
He is still to learn that communication is predicated on the defection to simple and efficient language.
The shorter the better, the simpler the more effective.
In the article under discussion, three critical issues and conclusions are made which invite further debate.
The first issue is the attempt and conclusion to reduce the fight between the shareholders of Kingdom and Meikles as a simple Manichean fight between Nigel Chanakira and John Moxon.
The second, borrowing on Amilcar Cabral and Franz Fanon, is an attack on the black middle class in Zimbabwe, its immaturity and indeed its capacity to reproduce itself through legitimation by whites and white capital.
Thirdly, is the glorification of the current empowerment programme and the consequent question why black middleclass or elites who are the intended beneficiaries, are in fact opposed to the same.
Questioning the black middleclass and its relationship to capital in the post independent state is legitimate.
Indeed Amilcar Cabral, Franz Fanon and many others do a fantastic job in exposing the limitations of this class.
There can be no question about the comprador role that this class has played and its limitations in defining itself other than an intermediary accessory body that is content to serve as a managing class to white capital.
Part of the problem of course lies both in the pre and post colonial education system, which trains the African child to be a subservient seller of labour.
The education system does not allow us to have bigger horizons other than being a teacher, nurse, doctor or accountant.
African children are taught to write "application for vacancies" and to prepare curriculum vitae as opposed to "crafting business proposals" and strategic business plans.
Glaringly missing in Manheru's analysis is the responsibility the post-colonial State must hold in its failure to create a mature middleclass and indeed for that matter a black bourgeoisie.
It is my contention that the post colonial states in general, and indeed the post-independent Zimbabwe government in particular, have been intoxicated by one thing and one thing alone, the power retention agenda.
This is in betrayal of a proper developmental State underpinned by democracy, the rule of law, social protection and social justice under a vibrant social economy.
In short, the post-colonial State and the post-colonial elites have failed to develop what Lenin calls the national democratic State, which is a precondition to the liberation of the potential of not just workers but so too the potential and the leverage of capital including black capital.
Political power has failed Africa and political power has emasculated the growth and development of Africa.
At independence in the late '50s and '60s, the GDP of many African countries was comparable to those of many in Europe and South East Asia.
Ghana for instance, had the same GDP with South Korea but 50 years later, the two countries are not comparable in terms of global competitiveness, GDP, per capita income and the quality of citizens' lives.
To be fair, there are some countries that have developed without democracy, Singapore and China being good examples.
But what is critical in these countries is the existence of a genuine leadership and genuine desire to uplift and develop its people.
The fact of the matter is that the inheritors of the African state at independence had no craft competence and craft literacy to deal with state craftsmanship.
Put simply, while nationalism was a good and sufficient instrument for the democratisation and the decolonisation of the colonial state, it did not have an answer to the post-independence challenge of development, democratisation and upliftment of the people.
Franz Fanon in "The Wretched of the Earth" is vicious in his attack over the rulers at independence.
He states: "The national bourgeoisie steps into the shoes of the former European settlement ... seen through its eyes, its mission has nothing to do with transforming the nation: it consists, prosaically of being the transmission line between the nation and a capitalism, rampant though camouflaged, which today puts on the masque of neo-colonialism.
"The national bourgeoisie will be quite content with the role of Western bourgeoisie's business agent, and it will play its part, without any complexes in a most dignified manner.
"But this same lucrative role, this cheap-jacket function, this meanness of outlook and this absence of all ambition symbolise the incapability of the middle class to fulfil its historic role of bourgeoisie."
Our very own Ibbo Mandaza makes the same point in his brilliant introduction to Edgar Tekere's autobiography.
He laments that the post-independent State was inherited by peasant teachers and headmasters who simply could not understand State craftsmanship and therefore maintained the status quo of conformity.
He states: "As former school teachers who had never pursued a balance sheet in all their working experience, university graduates with little or no exposure to their Statecraft or business, the Zimbabwe leadership at post-independence constituted more of a caretaker state, facilitating an economy which, two decades or more later, remains quite firmly in the hands of the former white settlers and international capital."
It is too early to assess the extent to which that stronghold has been relaxed on the strength of the land reform exercise. But the latter appears to have provided yet another opportunity for the parasitic bourgeoisie and comprador classes to engage in voracious primitive accumulation, with little or no real improvement in production nor the requisite contribution to industrialisation and the related increase in employment and economic growth.
Indeed, today Zimbabwe is no nearer to establishing a national economy nor national bourgeoisie. This has been exacerbated by a bureaucratic bourgeoisie now characterised by rampant mediocrity and corruption: and leaders most of whom are not conversant with economic and financial issues, while simultaneously reckless and extravagant in the management of resources, including money which is simply printed in order to sustain and maintain an image of an "economic turnaround".
However, it is not just the lack of vision and the lack of craft competence and knowledge of Statecraft that explains the culpability of our post-independence rulers.
The lip service paid to the misunderstood ideology of socialism was also critical. That lip service explains the discomfort of Zanu PF with capital and more importantly black capital.
Indeed, black capital has been treated more harshly.
Multinationals and the inward looking Rhodesian sanctions busting companies created by Ian Smith were allowed to flourish in the first years of independence. However, the same cannot be said for black capital.
Indeed, the political elite managing the state has been suspicious of competing spaces created by black capital.
Thus, virtually every black person who has sought to graduate from petty intermediary capital to real ownership has been on the forefront of Zanu PF attack.
This includes the likes of Strive Masiyiwa, Nigel Chanakira, James Makamba, Shingi Mutasa, Nicholas Vingirai, Julius Makoni, James Mushore, Mutumwa Mawere, Mthuli Ncube and Jeff Mzwimbi, only to name a few.
In July 2004, the biggest bank in terms of bank turnover was Trust Bank.
Six months down the line, the bank's primary drivers Chris Goromonzi and William Nyemba were in exile.
The black businesses that have survived did so by taking refuge in Zanu PF, the likes of Phillip Chiyangwa, Saviour Kasukuwere, Ray Kaukonde, Sylvester Nguni and many others.
Not surprisingly, Nigel Chanakira seeks to follow the same route.
The latter group of people illustrates the subjective treatment of black capital by Zanu PF and the inheritors of the State.
The religion of this system has been patronage and cronyism and the economy has been the mere temple of this cult.
Government tenders, licences including mining licences in Chiadzwa, the land reform programme have all been conducted on the basis of cronyism and clientelism.
Thus when black elites in Zimbabwe question the current indigenisation programme, they are not doing so on the basis that they are anti-empowerment. They are doing so on the basis of fear of precedent.
That is, the mere knowledge that Zanu PF is not capable of doing anything without resorting to its natural DNA of patrimonialism.
It is the very same fear of Zanu PF's DNA that explains the public's response to its weighing in into the Moxon-Chanakira affair.
There is total mistrust of Zanu PF's objectivity. Objectivity and Zanu PF are as close to each other as the same magnetic poles.
However, in mitigation it must be pointed out that the structural deficiencies of the colonial State were unlikely to produce any other post-colonial outcome.
The colonial State was a narrow and intrusive construct with a false accumulation model based on the extraction of raw materials, agriculture and minerals for the metropolitan capital.
It was a mere gatekeeper between the metropolis and the local environment. Thus Africa's new rulers suddenly found themselves in control of a State which was not in control of its own resources.
African rulers were mere gatekeepers of an economy whose main role was to justify the externalisation of raw materials.
Rather than democratising and finding an alternative developmental model, the gatekeepers surrendered to the venality of gate keeping.
Their sole concern became that of controlling the gates and nothing else. Hence, the power retention agenda.
These are hard facts missing from Nathaniel Manheru's article.
To the majority of the working people on the African continent, independence did not amount to the transformation of their lives.
There is now a generational responsibility on the post-nationalist generation to complete the unfinished business of nationalism.
This responsibility means transforming the State, attending the issues of democracy, constitutionalism and re-crafting the social economy founded on the basis of social justice and social development.
More important must be the crafting of a vision that subordinates politics to developmental issues.
In simple terms, this generation has the monumental duty of the transforming the State into a national democratic State.
Icho!
Tendai Biti is the Minister of Finance. This article was originally published in the Herald
Uncertainty shrouds ZABG launch
Sunday, 16 January 2005 02:00
By Kumbirai Mafunda
NEW executives charged with leading the much-vaunted Zimbabwe Allied Banking Group (ZABG) have discovered that the configuration and launch of the banking phoenix is not a str oll in the park as the central bank had earlier projected.
Touting the Troubled Bank Resolution Policy as the magic antidote to the tempest that rocked the financial sector, Reserve Bank Governor Gideon Gono proclaimed in his third quarter monetary policy review that all administrative hiccups would be dealt with by December 2004. But in the few weeks they have been in their new roles executives are facing a different picture. The new institution has already missed the self-imposed opening deadline of January 1, 2005, and indications are that the opening could be further delayed because of a number of operational, legal and administrative bottlenecks that need to be ironed out. Critics who warned that the timetable to the launch of the mamoth bank was short could argue they have been vindicated.
For a start, banking sources say the banks being amalgamated into ZABG namely Trust, Barbican, Time, Royal and Intermarket all have different conditions of service for staff, service cultures, branding and a plethora of other different operational manuals that need to be harmonised.
Another issue which seemed to have been overlooked is that the legal instrument enabling the central bank to launch ZABG needed to be passed by parliament first, before being signed by President Robert Mugabe into law for the new institution to become a reality.
Although the central bank's deputy Governor Charity Dhliwayo moved on New Year's day to soothe market discomfort with a statement maintaining the bank would open to members of the public as scheduled, the banking fraternity is on edge.
"They have got a lot of things to sort out," said one executive who is a member of the Bankers' Association of Zimbabwe (BAZ).
Banking executives who spoke anonymously said ZABG executives are battling with such critical issues as how to select those who would be recruited into the new institution, while those who would not be absorbed would be compensated, taking into account their years of service, conditions of service and terms and conditions of their contracts.
The heads of departments have been conducting interviews with selected staff from each bank under a curator, but workers inside these institutions have queried the basis upon which these interviews are being conducted. Staff is also questioning the criteria used to appoint some members of staff who have already been given appointment letters by ZABG. The enlistment drive is expected to be through by January 24.
Already, the Zimbabwe Banking and Allied Workers Union (ZIBAWU) has voiced concern about the treatment of its members who are employed by banks under curatorship and who are going to form ZABG. The union is believed to be preparing for a major labour tussle over the retrenchment packages to be paid to those who will not make it into the new institution. Even workers at some of the affected banks have vowed to fight to the bitter end until they are properly compensated.
By Friday the union was still finalising a document detailing its concerns and the uncertainties faced by its members, which will be sent to Gono, said Collin Gwiyo, the secretary-general of ZIBAWU. Apart from integrating the different bank cultures, branding is another major challenge that could not have been easily overcome in the short space of time that ZABG was supposed to be launched. All the interior and exterior signage has to be changed and this is not an overnight job. In addition, there has been no communication on the new corporate colours of ZABG or its logo, neither has there been word on whether there would be new cheque books, ATM cards and other corporate stationery in time for the launch of the bank.
Banking sources indicated that Trust Bank's infrastructure, including the bank's IT system and branch network, would form the core of the ZABG branch network. The new executives are visiting each branch to assess its suitability and how they can be rebranded. During the trips, the executives would also decide what to do with the branches of other banks being absorbed into ZABG.
"All these processes take time and not the few weeks that had been given by the Governor when he released his statement," said one banker.
But the greatest challenge to the tardy birth of ZABG is the decision by Time Bank shareholders to sue the central bank over its decision to place the bank under curatorship. Analysts said the unprecedented legal challenge could open a financial can of worms, as there are indications shareholders of other banks under the management of a curator are either contemplating suing or are finalising their papers.
"The fundamental argument is that shareholder interests have been subordinated to those of the central bank and government," said a shareholder with one of the affected banks. "Up to now, no-one has consulted shareholders on how the central bank intends to compensate us for taking over our investment, neither has there been clarity on how the valuation of our investments will be done."
StandardBusiness understands the situation is even more difficult for shareholders of listed companies like Trust Holdings Ltd, as they need to be consulted and compensated for the takeover of the bank by ZABG.
While the central bank is believed to be contemplating conversion of liquidity support owed by Trust and other beneficiaries of the Troubled Banks Fund (TBF) into equity-which would in some cases wipe out the value of existing shareholders, analysts point out that the same shareholders will argue that the interest calculations made on the liquidity support were arbitrary and contravened the in-duplum rule.
Trust Bank assets moved to ZABG
Friday, 23 September 2005 02:00
Shakeman Mugari
THE Reserve Bank of Zimbabwe (RBZ) has continued to illegally transfer Trust Bank's assets into the troubled Zimbabwe Allied Banking Group (ZABG) despite Trust's court challenge to the move.
The High Court is still to deliver judgement in the case in which Trust is disputing the take-over of its assets by the ZABG. It has however emerged that a $90 billion Grain Marketing Board (GMB) cheque meant to pay off its long-term debt to Trust was transferred into a ZABG account last week.
In their court application Trust argued that the ZABG was an illegal entity and should not be allowed to take over their assets. They are also disputing their inclusion in the new bank.
Royal Bank, which has also been swallowed into ZABG, is challenging the move and has made the same arguments in its application. Judgement on the issue was reserved on Monday after the judge said he needed more time to consider the matter.
Despite the pending judgements, ZABG has already started incorporating Trust and Royal assets into its books.
Sources say Trust curator Peter Bailey received the money from the GMB last week and immediately transferred it into the ZABG account to reflect on the bank's assets.
The source said the debt, which has been outstanding for the past two years, had initially been written off after GMB had failed to service it.
Ironically, these are some of the non-performing loans owed to Trust Bank by a number of parastatals, which contributed to the collapse of the bank last year. A number of parastatals still owe billions to Trust.
The transfer of the $90 billion comes as former Trust employees are still battling to get their retrenchment packages.
The packages have been outstanding for the past 10 months. Trust owes $25 billion to 107 workers laid off in March last year when the bank was hit by a liquidity crunch.
The workers are furious that the curator has transferred the money to ZABG before he could meet Trust's commitments to its creditors that include their packages. The workers say they were supposed to be paid off first because the bank was closed months after they were retrenched.
The curator has been evasive on the matter, workers say. He has referred the workers to the Reserve Bank, which insisted that they solve the matter with the curator.
In the meantime the curator has been debiting the workers' current accounts for staff loans, which they owed to the bank. The workers have since accumulated huge overdrafts on their accounts from exorbitant interest rates.
This is however against a Ministry of Labour and Social Welfare directive that staff loans be settled after they receive their packages.
The workers have since instructed their lawyer to sue the RBZ, the curator and ZABG in a bid to get their packages and stop their accounts from sinking further into the red. Court papers were expected to be filed this week.
Biti clears way for banks to reopen
http://www.thestandard.co.zw/business/25919-biti-clears-way-for-banks-to-reopen.html
FINANCE Minister Tendai Biti has cleared the way for the return of three banks that were forced to merge to create the Zimbabwe Allied Banking Group (Zabg) in 2005 when they ran into financial problems.
Biti told Standardbusiness on Wednesday that he was writing a letter to the Reserve Bank instructing it to issue licences to Trust, Royal and Barbican -- the three banks amalgamated to form Zabg five years ago.
"The government and the central bank agreed to issue licences to Trust, Barbican and Royal," Biti said.
No comment could be obtained from Royal, Trust and Barbican on Friday.
Royal Bank's founders, Jeffrey Mzwimbi and Durajadi Simba were both unavailable for comment.
William Nyemba, the brains behind Trust was also unreachable.
Barbican's founder Mthuli Ncube--who is now the chief economist at the African Development Bank -- could not be reached for a comment on Friday.
The licencing of the three banks would bring to an end the five-year feud between the central bank and founders who felt the RBZ had erred in taking over their assets.
It would also lead to the return of their assets "sold" to Zabg in 2005.
The three institutions ran into financial problems in 2004 and were put under curatorship as a way of trying to revive their operations. When curators reported that the institutions were beyond repair, they were amalgamated into Zabg which commenced operations on January 31 2005.
At the time RBZ claimed it had taken such drastic measures to protect economic interests of depositors and to avert "a fully fledged systemic financial crisis" which would have dealt a devastating blow to the Zimbabwean economy.
Trust and Royal approached the Supreme Court which ruled that that the "selling" of its assets to Zabg was null and void.
A panel, chaired by former High Court judge George Smith was set up to hear the appeals from Trust and Royal. The panel dismissed the appeals.
Until the latest developments, Royal and Trust founders have indicated that they are scouting for partners who would come in once the institutions have licences.
At a meeting in June, Trust Holdings Limited (THL) shareholders approved the process of recapitalisation by inviting new partners into the company.
THL directors were empowered to "select and engage prospective partners with the necessary technical, financial and strategic fit, subject to the terms and conditions of engagement being approved prior to implementation, by members sitting in a general meeting".
THL is the parent company of Trust.
BY NDAMU SANDU
Re-licencing banks: Overbanking?
Monday, 13 September 2010 19:03
By Luckmore Safuli
The pending entrance of three additional banks into the local financial sector as a result of the unbundling of the Zimbabwe Allied Banking Group (ZABG), has raised questions on the ability of the sector to absorb more banks and the ability of the institutions to survive, given the depressed operating environment
The local banking industry is still trying to find its feet following the introduction of the multi-currency regime which has seen most banks facing recapitalisation challenges as well as difficulties in attracting significant deposits.
The relicensing of Babican, Royal and Trust bank following the ongoing disbundling of ZABG, has put the financial sector at the spotlight.
Economic analyst, Mr. Willie Ganda believes the re-entrance of the three banks will result in increase in competition which can subsequently lead to competitive rates.
"New banks are likely to have an advantage over the existing institutions as they are likely to come in with new cost effective structures which can be relevant to the obtaining operating environment," Mr Ganda said.
The coming on board of the three financial institutions will also mean that the country will have a total of 29 banking institutions which will have to compete for the same market.
Some observers have argued that the country is overbanked, hence the need for mergers and acquisitions to create solid institutions.
However, Bankers Association of Zimbabwe President, Mr. John Mushayavanhu insists that the country is not overbanked and feels the recently licensed banks need to put in place cost effective measures as well as tap into other sectors such as the informal sector to operate viably.
"We welcome the re-entrance of the three banks as they are likely to boost deposit base and increase competition. The country has a population of more than 12 million people with over 4 million estimated to be unbanked. There is need to tap into that sector by coming up with appropriate products," said Mr Mushayavanhu.
Along with Barbican Bank Limited, Royal and Trust were lumped into ZABG in 2004 after supposed detection of incurable operational defects, but the successor project, owned by government through Allied Financial Services Limited (AFS), faced viability challenges including mounting debts.
With the unbundling of the ZABG which will pave way for the reopening of the three banks reported to be at an advanced stage, stakeholders are anxious to see how the financial institutions will survive in the present operating environment.
