INTERFIN Holdings is now firm favourite to acquire a controlling stake in CFX Financial Services ahead of the Finance Bank of Zambia.The Finance Bank Zambia deal collapsed after exiled businessman Gilbert Muponda advised the Zambian Bank about his claim on CFX Bank which he claims was illegally snatched from him.
Sources with knowledge of the deal said Interfin will also underwrite the financial institution’s forthcoming rights offer.
CFX recently announced it was seeking to raise US$10 million through a rights offer to recapitalise the group’s banking arm in line with the Reserve Bank of Zimbabwe prescribed minimum capital requirements.
The latest development now supports market speculation that the three month-long talks between CFX and the Zambian bank have collapsed.
FBZ and CFX were locked in negotiations that could have resulted in the former taking over 51 percent of the local financial institution.
The talks seem to have taken too long for CFX considering the local financial institution’s desperate need to raise money to meet the Reserve Bank of Zimbabwe’s prescribed minimum capital requirements.
"The deal is signed and it has to be approved by the shareholders when they meet during an extra-ordinary general meeting," said one source.
CFX managing director Mr Emmanuel Tagarira could neither confirm nor deny the deal saying he will make the necessary announcement at the right time.
Efforts to get a comment from Interfin directors proved fruitless.
Meanwhile, CFX has written to exiled businessman Gilbert Muponda seeking to be furnished with details regarding the legal status of ENG Capital.
This follows threats by Muponda, through his lawyers Gutu and Chikowero Attorneys to take legal action if the CFX proceeds with its EGM.
Muponda argued he would suffer "irreparable financial prejudice in the event that the EGM scheduled for November 12 goes ahead before the matter pertaining to the proprietary interests of EGM Capital (Pvt) Ltd is resolved to the satisfaction of all interested stakeholders".
Muponda, claims his Century shares were fraudulently converted into CFX after the closure of Century.
CFX — through its lawyers Kantor and Immerman — has responded asking Muponda’s lawyers to indicate whether ENG was liquidated or was operational.
And in the event ENG is operational, the CFX lawyers have asked for a full list of the current directors, supported by a CR 14 filed with the Registrar of Companies and full details of the shareholders of ENG.
Reliable sources revealed that the delays in the conclusion of the deal between CFX and FBZ and its subsequent "collapse" had to do with Muponda’s threats.
Sources said FBZ, which was backed by Swiss Reinsurance, the world’s second largest reinsurer was on the verge of releasing the funds, which were to be deposited into a Barclays Bank account before utilisation.
But it made a sudden U-turn after Muponda wrote to FBZ that their proposed investment in CFX was subject to an ongoing dispute.
He said: "This transaction may expose your bank to high reputational risk as the dispute may entangle your organisation as the rightful owners of CFX/Century bank seek to reclaim their stolen shares."
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