Vingirai demands $2,7m from ZB

Source: Vingirai demands $2,7m from ZB – DailyNews Live

BUSINESS EDITOR      15 May 2017

HARARE – Businessman Nicholas Vingirai has demanded $2,7 million from ZB
Financial Holdings (ZBFH) in accruing dividends for the past 11 years.

In a letter written to ZBFH company secretary Charles Kathemba, Vingirai –
who was ousted from the financial services group’s board at a
tension-filled annual general meeting on Friday – said his investment firm
Transnational Holdings Limited (THL) was being prejudiced by the listed

“ZBFH has caused Intermarket Holdings Limited (IHL) (where THL has a 16
percent stake) or its subsidiaries to pay excessive and baseless
remuneration which payments we contend are, in fact, de facto dividends
exclusively paid to ZBFH,” he said in the May 10 missive.

“The de facto dividends paid over the years amount to about $13,4 million
of which THL’s share should have been about $2,55 million, subject to
verification,” Vingirai added.

This was after the veteran banker was last year given a 19,7 percent
shareholding in ZBFH by the government as compensation for the loss of IHL
more than a decade ago.

Vingirai’s IHL was bought by ZBFH, with the transaction concluded in 2006.
This was after the Reserve Bank of Zimbabwe had bailed out IHL’s
subsidiaries and later converted the debt into equity under a High Court
scheme of arrangement.

The banker was alleged to have fled the country, with the central bank
accusing him of externalisation at the height of former central bank
chief, Gideon Gono’s crusade to weed the sector of “errant bankers”

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, bringing to an end one of the longest
corporate fights since independence.

Vingirai said ZBFH has caused IHL to pay dividends at the exclusion of
THL. He added that his company should have been paid $168 332 out of the
total $883 743 paid to the financial services group between 2012 and 2016.

“ZBFH has over the years diverted business from ZB Building Society to ZB
bank thereby prejudicing IHL minority shareholders of potential dividends.
In the same manner ZBFH also diverted business from Intermarket Banking
Corporation Limited with the same prejudicing effect.

“The payments and business unfairly extracted by ZBFH from IHL or its
subsidiaries have had the net effect of systematically decimating IHL
while at the same time starving THL of dividends,” he added.

Meanwhile, Vingirai’s return to the Zimbabwean banking industry was cut
short by shareholders who voted him out of the ZBFH board.

On the day, the banker was also ordered to pay back the $$658 699 dividend
that was paid to his investment firm by ZBFH last year.

This was after the National Social Security Authority (Nssa), the majority
shareholder in ZBFH with a 37,79 percent stake, had argued that the
company erred in paying the dividend to THL after it had already paid the
dividend to government.

To compound his woes, Vingirai’s plans to increase his shareholding in
ZBFH to 26 percent – as per initial agreement with government – also hit a
brickwall after it was rejected by shareholders.