Please hide my ID for professional reasons…,
Your article about Standard Chartered Bank and Mvunga intimidating LUSE staff makes interesting and yet sad reading.
This Bank in the recent past has been let to get away with murder due to such retrogressive and senseless connections in the useless PF government.
The Bank currently misquarades as the leading profitable bank in Zambia and yet it has incurred huge losses on the fertilizer exposure with a well known company – Nyiombo investments. These losses are in excess of USD20m which they have transferred to the UK to avoid showing losses in Zambia.
The bank extended a loan to Nyiombo and later discovered that fertilizer worth about USD30m was missing and Nyiombo had no explanation for it and they had and still have no means to pay that USD30m. The bank needed to raise loss provisions for this loss but instead raised this in the Uk Stanchart books to hide the loss and avoided reporting it in Zambia contrary to BOZ requirements which requires that Stanchart should report this loss in the Zambia books since they are the lenders to Nyiombo…
This is extremely irregular and illegal for a listed company.
The Bank of Zambia rules are very clear that when part of the exposure of a bank is booked offshore, the country of credit exposure i.e where the operating assets of the borrowing entity are in this case Zambia should bear the loss.
Standard Chartered have been allowed to circumvent the rules to show a profitable position even when they have made a huge loss.
In 2009 -2010 Barclays Bank was courageous enough to take massive provisions on their exposure to the Agric sector and were decent enough to acknowledge bad lending and losses coming from there.
The bank recorded huge losses and published the same and worked their way out.
Why should Standard Chartered be allowed to falsify their records??? And show profits that are not there.?
As a matter of fact, the bank’s internal books – Management accounts show this loss position on Zambia.
Dr Kalyaya should look into this and ensure that the bank is directed to correct the position and show the losses and their UK parent should send additional capital to recapitalize the bank instead of cooking the books.
If this is not dealt with, BoZ will set a very bad precedent and also be effectively bending its rules and undermining its own integrity and disadvantage banks that are managing risks prudently.