Did Stanbic Bribe Bank of Zambia officials too?

Why is BoZ mute on the Stanbic bribery scandal despite being petitioned to intervene?
Why did BoZ pay a blind eye when Stanbic appointed a managing director with clear conflict of interest?
Why is the Bankers Association of Zambia mute?

According to the Banking and Financial Services Corporate Governance directive (Gazette notice No. 237 of 2016), no person can be a board member of a commercial bank unless the Bank of Zambia approves that person’s appointment. Even if it is the shareholders of the bank that appoint the chairperson and other board members, the Bank of Zambia has powers to veto, reject that appointment. The Corporate governance directive states that directors should be appointed through a formal, rigorous and transparent process. As already stated, that formal, rigorous and transparent process includes the mandate and role of the Bank of Zambia to vet appointees and veto unsuitable ones. To vet is to screen or make critical examination. In this case, the Bank of Zambia screens people appointed to sit on the boards of Banks to make sure that they are suitable, have no criminal records, do not have conflict of interest and meet or adhere to the framework of fundamental corporate governance principles established under the Banking and Financial Services Act.

The question that begs an answer here is, did the Bank of Zambia play its vetting role when Stanbic appointed Dr Austin Mwape, a key witness of Savenda, a company that was having legal problems with the bank at the time of the appointment?

Both Bank of Zambia and Stanbic sources have confirmed that Savenda formally complained to the bank of Zambia over Stanbic ‘s unethical and destructive behaviour.

The brief background is that, Savenda Management Services entered into a lease buy-back facility for a US$540,000 to buy a printing machine. It was agreed that Savenda would be making Monthly repayments by debit order from one of the company’s bank accounts. But, due to a faulty in the system of Stanbic Bank, Savenda’s instructions on the debit order were sent to the wrong account within Stanbic. Stanbic wrote to Savenda explaining the problem and saying it had been sorted out. But during this same period and amid this confusion, Stanbic decided to report Savenda to the Credit Reference bureau (CRB) as a bad debtor.
Savenda complained to the Bank of Zambia in a formal letter seeking the intervention of the central Bank. But the Bank of Zambia did not even respond. Why didn’t the Bank of Zambia intervene in this matter? Was it because the officers charged with this responsibility at the Bank of Zambia were paid huge sums of money by Stanbic? So far it has been established without any denial that Stanbic bribed Court of Appeal and Supreme Court judges, journalists and Bailiffs in relation to the Savenda scandal. What would stop Stanbic from bribing Bank of Zambia officials to keep mute? Why is BoZ mute in the face of such gigantic revelations about Stanbic?

When the matter went to arbitration Dr Mwape, as a respected financial expert and former Bank of Zambia Deputy governor stood as expert witness against Stanbic Bank. In his expert statement, he condemned Stanbic for bad banking practice and said Stanbic acted illegally and unethically. A few months later and while the case was still under the courts of law, Dr Mwape was hired a Board Chairnan for Stanbic Zambia ltd. The Bank of Zambia sanctioned this act of compromising a witness by Stanbic.

Dr Austin Mwape, the Stanbic Chairperson was once BoZ deputy governor, so he clears knows what constitutes conflict of interest. Did he speak to his former workmates at BoZ to turn a blind eye on his unethical appointment? Who cleared Dr Mwape to serve as Stanbic chairperson? Is there a report on his appointment and prior approval by the Bank of Zambia?

The Bankers Association of Zambia (BAZ) comprises all licensed and registered Commercial Banks in Zambia and the chairmanship is rotational among member institutions. Whereas the Bank of Zambia provides statutory regulation to commercial banks, BAZ, as a membership driven organization is supposed to provide self-regulation to banks.

The Bankers Association of Zambia has a code of banking practicewhich sets harmonised standards of good banking practices for banks to follow when dealing with customers. It stipulates how and when a bank should refer a customer to the credit reference bureau or any other such agency.

The code provides that:
‘Credit Reference Agencies. Organisations which collect store and provide financial and nonfinancial information on entities (including individuals) that is of relevance to banks and other lenders/users/stakeholders. Once consent has been obtained from the customer, banks may seek or give information from / to these agencies on their customers to assist them with various decisions, e.g. whether or not to open an account or provide loans or grant credit.’

Did Stanbic obtain consent from Savenda? The answer is no. And that is why Stanbic prevailed on the Bankers Association of Zambia to stay away from the matter. It feared to be reprimanded by fellow banks after flouting the code of banking practice which it was supposed to promote.

In fact, we have been informed by both Bank of Zambia and Stanbic that at the time Savenda lodged a complaint, Stanbic, through it then CEO Charles Mudiwa  was the chair of the Bankers Association of Zambia. The ethical step Stanbic should have taken was to declare conflict of interest and handover the chairmanship to a neutral bank when this matter was tabled. But even though other banks wanted to hear the matter, Stanbic used its power as chair to block the complaint.

Other banks are wondering why Stanbic has a special relationship with the Bank of Zambia whereby the South African financial institution gets away with any bad practice or illegality.

For example, there are also questions on the appointment of Leina Gabaraane as Managing director of Stanbic.

In October 2017, Standard Chartered Botswana appointed a Zambian Sonny Zulu to head that bank. The Bank of Botswana (Equivalent of the Bank of Zambia vetoed), rejected the appointment of Zulu for the sole reason that he was not a Motswana.

Barely two months later, in December 2017, Stanbic appointed Leina Gabaraane, a Motswana, to be the managing director of Stanbic.

The Bank of Zambia approved this appointment without raising any questions.

Then there is the  trend of appointing politically connected and therefore useful people as deputy managing directors and discarding them once their political influence diminishes.

Stanbic Appointed Mukwandi Chibesakunda as deputy Managing Director when her mother Inlaw was Chief Justice.
Once justice Chibesakunda was  removed from being Chief Justice,  Mukwandi  Chibesakunda was dropped in very suscipious manner according to Stanbic sources.

According to bank sources, when Felix Mutati was appointed minister of Finance, Stanbic decided to appoint his sister-in law  Mwansa Mutati as deputy managing director.

Sources  have indicated that Mwansa is likely to be dropped as now Felix Mutati is not minister of Finance. As minister of Finance overlooks monitoring of bank of Zambia so you can imagine why bank of Zambia was mute on the shed appointments and unethical behaviour of the bank.


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