George Guvamatanga thwarted workers’ bid for Barclays takeover: Documents

Source: George Guvamatanga thwarted workers’ bid for Barclays takeover: Documents | The Financial Gazette June 22, 2017

BARCLAYS Bank Zimbabwe managing director (MD), George Guvamatanga, spent most of last year battling to block 81 low level managers from engaging Barclays Plc, to clarify a number of issues, including an interest to buy a stake in the local unit, internal bank correspondence has revealed.

This was after Barclays Plc announced in March 2016 that it would be rounding up its African exit with the disposal of its 67,68 percent shareholding in Zimbabwe.
The disposal was part of a broad strategy by Barclays Plc to hive off stakes from Africa’s struggling financial markets to focus on high return western markets.

First Merchant Bank (FMB) of Malawi, which would purchase a 41 percent interest in Barclays Zimbabwe a little over a year later, had not yet emerged as a suitor at the time.
But within the bank, staff were aware that something was going on.

This was revealed by a flurry of letters exchanged between Guvamatanga and members of the Barclays Managers Association (BMA), an ambitious group of executives who took him to task over job security, compensation, employment liability and the right to be consulted before new shareholders took over.
The BMA would later escalate their interest to include rights to buy a stake in Barclays Zimbabwe.
But the letters, which dispel rumours that the Barclays Zimbabwe top executive backed a High Court challenge by the BMA on May 22, 2017, instead reveal immense infighting between the two camps.
Executives aware of the intense manoeuvres that took place as rival suitors jostled for the Barclays Zimbabwe shareholding, said the BMA had at the time thought Guvamatanga had been asked by FMB to help them take over the bank because he was blocking their quest to engage Barclays Plc.
They said this infighting could have undermined the Zimbabwe bid.

The letters obtained by The Financial Gazette reveal that as late as May 4, 2017, when it had become clear that FMB had emerged as the frontrunner, BMA was still fighting to engage Barclays Plc with the hope of purchasing 15 percent of the shares the British bank was selling.

While Barclays Zimbabwe’s 500 non-managerial workers unsuccessfully demanded a works council meeting to register their concerns, the BMA consortium was determined to present their own case to Barclays Plc, through Guvamatanga.

But, in responses sent through the bank’s legal counsel Joseph Chilimbe, Guvamatanga challenged the workers through at least three letters, to justify why they wanted to delve into shareholder issues.
“Your interest is noted and we raise the following issues, in a bid to clarify matters, and possibly assist your clients review their approach to championing their cause and interest,” Barclays Zimbabwe legal counsel, Joseph Chilimbe, wrote to BMA’s lawyer, Rodgers Matsikidze on April 6, 2016.
This was after BMA had written to the Barclays Zimbabwe MD on March 29, 2016 requesting a meeting to iron out a number of issues including job security and pensions.

“Whilst the majority shareholder in Barclays Bank Zimbabwe has indicated an intention to dispose of its shareholding in the bank, the matter remains nothing more than an expression of an intention to dispose…There is therefore no shareholding disposal exercise underway. What is taking place are engagements between the shareholder and relevant stakeholders which, because of the confidentiality obligations, are necessarily restricted to the participants indicated. We request that the proposed meeting be deferred pending further developments. We also, in the interim request further clarity regarding the specific legal rights invested in your clients entitling them to participate in shareholder matters as envisaged in the case of this institution,” Chilimbe said.

Five days later, the BMA wrote to Guvamatanga spelling out their legal rights and noting that the Labour Act compelled employers to consult workers “with regards to partial or total plant closures and mergers and transfer of ownership”.

They said they were entitled to “greater details” regarding the Barclays Plc planned divestment and said they had the right to give their input “from day one” during the process of engaging a new shareholder.
Most importantly, BMA said, they wanted assurances that their contracts would be protected.
On April 27, Chilimbe wrote back to BMA, maintaining the position that the matters were “purely within the shareholder’s domain…and your client has no right to participate in such discussions”.
He said the issues raised by BMA had already been addressed and there was “no basis for such” meeting.
“Your request for a meeting with the (Barclays Plc) is therefore declined,” he said.

The letters indicated that as late as May 4, 2017, BMA was insisting on being consulted on the planned sale of Barclays Plc’s stake in the Zimbabwe unit.

By this time, the BMA’s interests had switched to a stated intention to buy a stake in the bank.
It was during this time that reports were also emerging that a Guvamatanga-led consortium had tasked Msasa Capital to present its own bid to Barclays Plc.

In the meantime, FMB was said to have made significant progress in its negotiations with Barclays Plc.
FMB’s bid was bolstered by support from the bank’s 500 non-managerial workers. The Banks and Allied Workers Union of Zimbabwe (ZIBAWU) has also come out in support of FMB.

“The union made numerous overtures to the local management with a view of working together on crafting an empowerment employee share ownership scheme. At all times, local management made it clear that they were not keen to work with us,” wrote ZIBAWU secretary-general, Peter Mutasa.


  • comment-avatar
    biggus dickus 5 years ago

    Certainly hope Barclays Zimbabwe does the right thing by its pensioners as its exits the failed state .
    Many years of ducking and diving by Barclays Zimbabwe in order for the parent to not have to help its subsidiary to pay reasonable pensions to its long suffering and loyal employees left some former employees of 40 years service receiving a pension of US$ 30 p month.
    Barclays Zimbabwe has over decades not had an arms length transaction between itself and its pension fund – one example – the buildings it uses to conduct its banking operations. The pension fund owns the land and buildings and rents them to Barclays Zimbabwe. Trustees of the pension fund are of course employees and cowed into agreeing easy terms for the bank – thus hurting the pension fund. Tame actuaries always seem to find in the banks favour and insist all is well.
    So final result – work your entire life for Barclays Zimbabwe – 40 years – and receive US$ 30 p month.This example is of some senior people retired from the bank.Folks who worked less than 40 years are already in the very poor house !
    How do we reconcile this fine piece said by James Staley – CEO – of Barclays about itself :- ” I want Barclays to be a bank where our employees choose to work here because they believe in the institution, and its intrinsically valuable role in society. This is a mind-set I want to reinvigorate in everyone, from branch colleagues working on the high street in Manchester, to the M&A banker in New York.”
    Why would anyone in Africa feel sad for Barclays PLC as the curtain comes down on its African safari as it has acted in such a heartless manner, in this small and once dynamic country, towards its faithful employees