Zimbabwen businessman threatens to sue Finance bank Zambia

Finance bank presents itself as lion

Finance bank presents itself as lion

A Zimbabwean businessman has threatened to sue finance bank Zambia limited if it goes ahead to buy CFX bank of Zimbabwe.

Gilbert Muponda, a media guru in Zimbabwe has written a letter to Finance bank Zambia telling the managing director that Finance Bank is trying to buy an Asset (CFX Bank) which was looted and expropriated from him.

Last week, Pan-African News Agency (PANA) reported that Finance Bank Zambia was in talks to buy a controlling stake in CFX Bank of Zimbabwe.

But Muponda in his letter told Finance bank that “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 piece meal fashion to avoid detection of the fraud and transaction laundering that was being perpetrated,” said Muponda in a letter made available to the Watchdog.

Muponad owns the Zimbabwe Daily News (www.zimdaily.com) Zimbabwe Telegraph ( www.zimtelegraph.com ) Zimbabwe Tirbune ( www.zimtribune.com) Zimbabwe Guardian ( www.zimguardian.com) and various other New Media operations.I have a matter concerning Finance Bank of Zambia investment in Zimbabwe.

He advised Finance bank to do a proper due diligence or else face the law.

Muponda says there is high reputational risk for Finance Bank Zambia should they choose to go ahead. He said this claim has been long on-going and that he plans to make a media awareness campaign saying is asset looting and stripping in Zimbabwe and that FBZ should not be party to sanitizing long looted assets.

“This is not wise”, he advises.

According to PANA, Finance Bank of Zambia, which is minority-owned by Swiss Reinsurance, has targeted CFX Bank of Zimbabwe, which is seeking to boost its capital to meet a new higher ceiling set by the central bank.

Officials said Swiss Reinsurance was backing the bid by the Zambian bank, and would likely finance the transaction.

They said Finance Bank of Zambia consultants had already carried out a due diligence exercise on CFX Bank, and were expected to present their findings to their principals shortly.

According to PANA, The central bank in Zimbabwe, fearing possible collapse of banks in the face of tight competition in the sector, has raised the capital requirements for banks, forcing a number to look for new investors.

CFX Bank managing director Emmanuel Tagarira confirmed the talks and said the bank, which is listed on the Zimbabwe Stock Exchange, “will inform the market at the appropriate time.”

But Muponda told Fiannce bank Zambia in the letter that “It is important that your Organization avoids being a conduit to a money and asset laundering scheme.”

Muponda’s letter Finance bank is reproduced below:

The Managing Director
Finance Bank Zambia
Plot 226 Finsbury House, Buteko Avenue, Ndola Zambia

RE ; FBZ  INVESTMENT IN CFX BANK ZIMBABWE OWNERSHIP WRANGLE AND DISPUTE

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 CFX 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 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 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% 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 ;
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

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

Share this post