THE MMD government under Levy Mwanawasa rejected US$28.2 million in preference for US$8.25 million when Zanaco was offered to Rabobank during the privatisation of the bank.
Zambezi Consortium Limited (ZCL) offered to buy 49 percent shares in Zanaco for US28.2 million but government sold the bank to Rabobank for US$8.25 million.
Executive Capital Management chairman, Bwalya Chiti, who is former MMD chairman for legal, disclosed this before the Commission of Inquiry on the sale of Zanaco yesterday.
Mr Chiti, who represented ZCL during the bidding for Zanaco, said there were other bidders who expressed interest to acquire the shares at a higher price.
He said the former government “politicised” the privatisation of the bank and that ZCL was irregularly excluded from the bidding process before the Zambia Privatisation Authority (ZPA) opened the commercial bid.
“I wish to state to this commission that we had prepared a highly competitive bid that could have enabled us to acquire the 49 percent shares from Zanaco bank. In our bid, we offered to pay US$28.2 million for the 49 percent shares. This could have enabled us to become the highest bidders for the acquisition of the shares,” Mr Chiti said.
And chairman of the commission, Sebastian Zulu quizzed the Zambia Development Agency (ZDA) manager for Micro Facility Economic Zone and former ZPA negotiating leader for the privatisation of Zanaco, Robert Banda over the outcome of the negotiations.
He said it is sad that the negotiating team did not consider the market asset value when privatising Zanaco, which led to the gross undervaluation of the bank.
Meanwhile, a senior Zanaco official has suggested that government should reclaim the 49 percent shares the MMD government sold to Rabobank on grounds that the Dutch bank allegedly breached the management service and shareholders agreement.
ZANACO bank compliance manager for Northern Region Peter Njungu said at the commission that Rabobank management has not improved the conditions of service for Zanaco employees who were hired by government prior to the privatisation of the bank.
Mr Njungu said Zanaco workers who were employed by government prior to the privatisation have been subjected to poor conditions of service, compared to those employed by Rabobank management.
He said this is a contravention of the management service and shareholders agreement.
President Sata has appointed the Commission of Inquiry to establish whether procedure was followed when Rabobank acquired a 49 percent stake in Zanaco.
“I want to tell this tribunal that we have found ourselves in an awkward situation where management has continued to increase salaries for staff who were employed after the privatisation of the bank. There are salary discrepancies between those who were employed prior to the privatisation of the bank and those who have been employed now.
“It is very surprising that staff in the same positions have different salaries. For example, some employees who are on Rabobank conditions of service are getting K45 million per month and those who were hired prior to its privatisation are getting K14 million,” he said.
Mr Njungu also said some employees on Rabobank conditions are getting K7 million per month as fuel allowance while their colleagues at the same management level are getting K3 million.
Zanaco is among the top five banks – out of 18 commercial banks – in Zambia with a country wide representation though a partnership with Zampost, some 60 branches and about 1300 workers.