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Shareholders challenge Magande over ZNCB's net asset value

Shareholders challenge Magande over ZNCB's net asset value
By Kabanda Chulu
Wednesday February 27, 2008 [03:00]

MINORITY shareholders in Zambia National Commercial Bank (ZNCB) have challenged finance minister Ng'andu Magande to disclose the net asset value of the bank. In April 2007, the government sold 49 per cent shares in ZNCB to Rabobank of the Netherlands at a cost of US$8.25 million and together with the new management, government appointed independent auditors to determine the net asset value of the bank within 90 days of the sale.

Speaking yesterday, ZNCB minority shareholders association chairman Andrew Kashita expressed displeasure at the developments relating to the operations at the bank since it was sold.

“We have been kept in the dark and we don’t know what is happening, we don’t even hold meetings. How come the net asset value of the bank is still a secret although we were told that within 90 days of the sale every transaction details will be disclosed? Now we challenge Magande to avail us the actual net asset value of the bank,” Kashita said.

But Magande said auditing of the bank to determine its net asset value was on course and the board would soon make it public.

“We are not trying to hide anything from the people. It is true the auditing process has taken long but ZNCB is a big bank and the process involves colossal sums of money and huge debt liabilities but we are making progress and soon the board will announce the findings of the audit report,” said Magande. ”And also there is need to clean the balance sheets so that by end of this year, government will offload 25.8 per cent shares at the Lusaka Stock Exchange,” said Magande.

During the handover of the bank, the government clarified that the US$8.25 million figure was the reserve price and the true value of the shares would only be known when auditors closed the financial books because the bank’s net position had improved.

Rabobank also made commitments to offload four per cent shares to the Zambia National Farmers Union (ZNFU) and a further 20 per cent to the public.

But Kashita questioned the criteria used to choose ZNFU for the four per cent shares by Rabobank and why the bank was not offloading the remainder of shares in order to conform to regulations.

ZNCB was sold to Rabobank amidst concerns that the transaction was against the provisions of the banking and financial services Act (BFSA) of 2000 that does not allow institution equity in a financial entity to exceed 25 per cent of its regulatory capital.

ZNCB was founded in 1969 and has a network of more than 50 branch offices, making it the country’s largest consumer bank. The bank has 1,100 employees and as of December 31st 2005, had net assets of US$384 million.

Labels: MAGANDE, PRIVATISATION, ZNCB

posted by MrK @ 6:14 AM