Source: Nicholas Vingirai flexes muscle within ZB | The Financial Gazette February 16, 2017
BANKER, Nicholas Vingirai, has embarked on a restructuring of financial services group, ZB Financial Holdings Limited (ZFHL), after assuming a 26 percent shareholding last year.
The transaction was compensation for the loss of Intermarket Holdings Limited (IHL) in 2004.
IHL had been bought by ZFHL with the transaction concluded in 2006.
This was after the Reserve Bank of Zimbabwe bailed out IHLs subsidiaries and later converted the debt into equity under a High Court scheme of arrangement.
Since then, Vingirai had been fighting to reclaim his lost assets. His battle to reclaim the shares intensified after externalisation charges against him were lifted in 2013.
ZFHL wholly owns ZB Bank Limited, ZB Reinsurance Limited, ZB Transfer Secretaries, ZB Capital and ZB Associated Services.
It has a 75,3 percent stake in ZB Building Society and 64 percent shareholding in ZB Life Assurance.
It also has interest in Mashonaland Holdings, Credit Insurance Zimbabwe and Cell Holdings.
Vingirai’s grand entry alongside two nominees of his investment vehicle, Transnational Holdings Limited (THL), has seen the reconfiguration of the board to reflect his interests.
THL is now the second largest shareholder in the group after the National Social Security Authority at 37,79 percent shareholding.
Vingirai appointed Mike Mahachi and Zororo Muranda as board members since assuming shareholding in the group. He is a non-executive board member of ZFHL.
Peter Nyoni, the husband to Minister of Small, Medium and Cooperative Development Sithembiso Nyoni, is currently acting chairperson of the group after Meikles Hospitality’s commercial director, Thamsangqa Mpofu, stepped down.
Muranda is a professor and dean at the School of Entrepreneurship and Business Sciences at Chinhoyi University of Science and Technology while Mahachi is a surveyor and property developer.
Other board members who have left since Vingirai gained shareholding in ZFHL are Eria Hamandishe, Tendai Chirisa, Tendai Mafunda and Elliot Munemo.
Group chief executive officer (CEO), Ron Mutandagayi, and finance director, Fanuel Kapanje, are executive directors.
Insiders said the two largest shareholders in the group — NSSA and THL — had agreed to make “gradual” changes to all ZFHL’s subsidiaries to create value for shareholders.
They said change at subsidiary and associate companies were likely to take place during the first half of the year.
So far there have been board changes at ZFHL.
“Competitive pressures after shareholder changes last year have compelled the group to have a serious look at the quality of their products and services, and adopt quality interventions. The changing nature of the economy and lifting of sanction on the group has also, to some extent, forced the business to adopt new strategies as well as alter their product mix,” an official at ZFHL said.
ZFHL was removed from the list of Specially Designated Nationals and Blocked Persons by the United States government last year. This move is expected to allow the banking group to transact freely in international financial markets.
“Expansion to an overseas market may require changes in the staff profile to better connect with the international market, and changes in work policies as such changes are inevitable,” another source said.
A source close to Vingirai said there was need to safeguard the ZFHL investment after what happened 13 years ago, hence the allowance for a smooth transition of the group.
Insiders said Vingirai wants to move the group and its subsidiaries in a direction he feels would improve its earnings while protecting shareholder value. He is also anticipating that the group pays a consistent dividend as he “creates structures and a team that would ensure that value is persevered”, one source said.
He is also understood to be laden with huge debts, which he hopes could be extricated if the companies perform well and declare dividends.
The debts are said to have been accumulated during his fight to gain control of the empire.
Late last year, ZFHL also appointed Obey Matizanadzo, a renowned legal practitioner and international banker, John Nhavira, as independent directors.
Matizanadzo is a partner in Matizanadzo and Warhurst Legal practitioners, while Nhavira is a lecturer at the University of Zimbabwe.
ZFHL also appointed Mike Manyika to a newly created position of chief operating officer. Manyika is said to be Vingirai’s top advisor.
Manyika joined ZFHL on November 7 last year. He is a former managing director at Dawn Properties. He resigned from the property firm after a protracted battle with his then counterparts at African Sun Limited over the terms of leases held by the hospitality group on Dawn’s hotel properties.
The fight spilled over into the courts but was later resolved after African Sun bought a controlling stake in Dawn Properties, putting paid to Dawn’s attempts to evict the hotel group. A re-organisation at the firm resulted in Manyika’s departure.
There has also been a shake-up at listed property investment and development concern, Mashonaland Holdings Limited where CEO, Manfred Mahari, and finance director and company secretary, Nodzo Matsangura were suspended over loans and allowances granted to staff.
This was after an audit revealed that the firm could have been prejudiced of millions of dollars through financial irregularities.
The company’s internal auditors unearthed the irregularities, which were also confirmed by an external audit instituted by the company at the instigation of the board.
CEO Mutandagayi is the current chairman of Mashonaland Holdings; he took over from Ambrose Chinembiri, a former managing director of ZB Life Assurance. Chinembiri’s predecessor was the late ZFHL CEO, Elisha Mushayakarara.
Vingirai confirmed the restructuring, saying he was building an empire that would stand the test of time. He said the institution should not only benefit shareholders and clients but should contribute to the growth of the country’s economy.
“It is not so much about the restructuring going on, but the spirit of the enterprise. That is what makes a business, when the right spirit is injected in the enterprise and the market responds positively, the entire nation benefits,” he told The Financial Gazette’s Companies & Markets.
Vingirai declined to give specific details on his restructuring plans, saying it was still premature to do so.
“There will be positive changes wherever I am invested,” Vingirai said.
A 2004 blitz on bankers and other business executives forced banking executives such as Vingirai to flee the country. Vingirai left the country for South Africa.
In 2013, High Court judge Justice Susan Mavhangira ruled in Vingirai’s favour, removing a caveat which covered most properties he owned. She ordered that caveat number 368/04 registered under Intermarket Banking Corporation and Intermarket Discount House Limited be lifted.
Vingirai’s THL made the application under case number HC4910/13 citing IBBC, IDH, Ngoni Kudenga, ZB Financial Holdings, the Registrar of Deeds and Registrar of Companies as respondents.
“All shares held by the applicant in any company, listed or unlisted in his name or through any legal personae that he has interest in, beneficial or otherwise is granted,” read part of the ruling.
Justice Mavangira also ordered that four residential properties — two in Greystone Park and the other two in Sentosa, Mabelreign owned by Vingirai be retained.
Vingirai was the first black Zimbabwean to form a discount house when he formed Intermarket discount house in February 1991 in response to government’s policy to open the banking sector ti blacks.
It broke a duo-poly that was in existence since 1959, with only Bard Discount House and the Discount Company of Zimbabwe operating then.
He has also helped to set up financial institutions in Ghana, Zambia and Nigeria.