Rupiah and his fears
By The Post
Fri 16 Mar. 2012, 12:00 CAT
RUPIAH Banda says he feels he is being persecuted by Michael Sata's government. And Rupiah says there is need to give each other respect so that the country moves forward and a way of resolving matters with him must be found before removing his immunity.
There is no one persecuting Rupiah and members of his family. Michael's government has treated Rupiah with a lot more respect than he had treated them when they were in opposition. Rupiah was ruthless and merciless with those who opposed him, those he detested.
But there is no element of revenge on the part of Michael and his government and others who Rupiah mistreated, persecuted. We can with all honesty and sincerity say we are part of the people Rupiah persecuted. Rupiah abused our country's judicial process to fix us, to punish us and destroy us.
And there were judges of our High Court and our Supreme Court who connived with him, who allowed themselves to be used in this attempt to crush us. And the Chief Justice of this Republic, Ernest Sakala, cannot in all honesty deny what we are saying. But there is no bitterness in us, there is no element of hatred or revenge in us. This can also be said about Rajan Mahtani.
Rupiah and his judges connived to finish off this man and his bank. These are also matters that can be proved. Rajan is lucky to be among the living today.
The pursuit of justice must be a fundamental norm of the state. And the rule of law requires equality before the law. If Rupiah and his sons did something wrong, the law, as Michael has correctly pointed out, should take its course.
We have adequate laws that govern the prosecution of a former president. Those laws should be followed if need be. If investigations reveal that Rupiah abused his office to enrich himself, his sons and his friends, he should be prosecuted. Doing this is not setting a culture that will follow every president after he leaves office.
Doing this is setting a culture that does not allow impunity among those elected to govern and administer the affairs of our country. Taken to the extreme, if we were left with only two choices to prosecute every former president for corruption or to allow impunity, a situation where a president steals from his people and goes scot-free, we would not hesitate to choose the former.
The need to respect each other also extends to respect for public property, for the rights and dignity of others. Stealing public resources or abusing public office is disrespect for others, for the rights and dignity of fellow citizens, people one is elected to lead.
Rupiah is suggesting that the government must find ways of resolving matters with him before removing his immunity. What matters? Let him give his suggestions on how these matters he is talking about can be resolved with him.
Let him state what he is offering on this score. But is this the way everybody who has committed a crime or who is suspected of having committed a crime should resolve matters? All of us should be given an opportunity of finding ways of resolving matters with the state before we are prosecuted or sent to prison! We are saying this in the light of the right to equality before the law or equal protection of the law, which every citizen should enjoy.
If Rupiah and his sons are innocent as he claims, let them do what people who feel they are innocent do: subject themselves to investigations and prosecution. When there were claims of Rajan having done something wrong at his bank and threats were being issued for his arrest, Rajan, who was in the United Kingdom attending medical treatment, abandoned that and came back home, against the advice of most of his friends, to face his accusers.
He didn't run away. His prayer was that if he had done something wrong, let him be taken to court so that he can have his day and clear his name. He was more concerned about clearing his name in court and not about the persecution he was indeed subjected to. Equally, when Rupiah was accusing us of having pocketed US$30 million from state institutions, our cry was: arrest and prosecute us if we have stolen anything from anyone.
Rupiah and his friends investigated us and found nothing. But they had no sense of honesty and dignity to tell the Zambian people that they had found nothing and kept on telling lies and insinuating all sorts of things. This is the man who today is talking about the need to give each other respect so that the country can move forward. What respect for others?
Rupiah has made it very clear that he knows where his son Henry is and he talks to him. Rupiah knows that Henry is wanted by the police here. If the Bandas are as innocent as they want to make us believe, why can't they ask Henry to come back and answer police questions? The truth is, in their heart of hearts, Rupiah and his sons know that they are not as innocent as they are claiming. They also know that nobody is persecuting them.
What they simply don't want is to be made accountable for the wrong things they did, for the crimes they committed. We all know that Rupiah has been working toward this impunity line for some time. In collusion with our discredited judiciary, Rupiah freed Chiluba from going to jail for corruption in order to establish a precedent, a culture where no president who steals goes to jail.
This was denounced long before Michael became president. This has nothing to do with Michael being president. And it doesn't matter who is president, the rule of law must always prevail and reign supreme.
It's clear that to Rupiah, what matters is his personal welfare and that of his close associates. He says he shed tears after his defeat in last year's presidential elections because his colleagues would lose jobs and their children would not go to school. But why should electoral defeat be so painful, so bitter and make an old man of Rupiah's age cry? As Joseph Clark observed, "defeat is not bitter unless you swallow it." It seems Rupiah swallowed it and it made him cry.
Jobs for Rupiah and his colleagues was all that mattered to them and not the plight of the 12 or 13 million other Zambians who did not have jobs in his government. Everything was about themselves and for themselves and by themselves. This is not behaviour that can attract respect for a leader or former leader.
If anyone has in his heart a vestige of love for his country, love for his people, love for justice, one cannot say the things Rupiah is saying. To save his job as president of our Republic and those of his colleagues, Rupiah was shameless and ruthless on those who opposed his rule.
He poured endless streams of lies and slander, poured forth in his crude, odious repulsive language all sorts of malice on his opponents, real and perceived. But the people of Zambia saw through him and refused to swallow his lies, insults and malice and voted him out.
To have believed him for a single moment would have sufficed to fill a man of conscience with remorse and shame for the rest of his life. Rupiah did not even attempt to cover up appearances. Rupiah and his men in our judiciary and other agencies of the state did not bother in the least to conceal what they were doing. They thought they had deceived the people with their lies and they ended up deceiving themselves.
They felt themselves lords and masters of the universe, with power over life and death. Of course, in every society there are men of base instinct - the sadists, brutes who guise themselves as human beings when they are nothing but monsters, only more or less restrained by discipline and social habit.
If they are offered a drink from a river of blood, they will not be satisfied until they drink the river dry. At their hands, and at the hands of their accomplices in robes, the best and noblest, the most valiant, the most honest Zambians suffered.
These tyrants, these corrupt elements called them crooks.
If respecting each other means allowing criminals of all hues to abuse our people, then there is a problem because the man who permits any man to trample and mistreat the country in which he was born, his people is not an honourable man, he is not a self-respecting man and one cannot respect others if one does not respect oneself. There must be a certain degree of honour.
And honour dictates that those who commit crimes against the people, those who steal the people's honour be tried for their crimes.
It is understandable that honest men had to suffer in a Republic where the president is a criminal and a thief.
Probably Rupiah knows very well what type of judiciary he has left behind and he knows that he will not receive a fair trial before it.
This is why he and his children are probably so scared of being prosecuted.
Labels: CORRUPTION, ERNEST SAKALA, FINANCE BANK, MICHAEL SATA, RAJAN MAHTANI, RUPIAH BANDA
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My cases were politically motivated, says Mahtani
By Maluba Jere
Tue 17 Jan. 2012, 13:57 CAT
MY court cases were politically motivated, says Finance Bank chairman Dr Rajan Mahtani.
Speaking after the Director of Public Prosecutions entered a nolle prosequi in a matter where Dr Mahatani and another were charged with obtaining credit by false pretences involving K6.5 billion, Dr Mahtani said all his cases had no substance because they were politically motivated.
He said he was grateful that justice had prevailed over offences he was accused of having committed.
Asked whether he expected yesterday's outcome in the matter, Dr Mahtani said, "I expected there was no case and I was looking forward to trial to hear what the prosecutors would say."
"As a born again Christian, I just wish to say to those who were accusing me that I have forgiven them," he said.
"The state has realised that there is no substance in the case hence the discharge."
Dr Mahtani said although he and his co-accused were harassed for two whole years, he had no intention of suing for wrongful prosecution, saying he was leaving that to God.
In this case, Dr Mahtani and David Peter Kamalarajan Kanaganagam pleaded not guilty to a charge of obtaining credit by false pretences involving K6.5 billion.
The duo first appeared before senior resident magistrate David Simusamba where they both denied the charge against them and the court entered plea in that respect.
After sometime, they were discharged through a nolle prosequi but were later that same day re-arrested on the same charge.
They then appeared before magistrate Mwaka Mikalile where they again pleaded not guilty to the charge.
Particulars of the offence alleged that on dates unknown but between February 1, 2008 and February 29, 2008, in Ndola, Mahtani and Kamalarajan jointly and whilst acting together with other persons unknown, in incurring a debt did obtain K6.5 billion from Finance Bank by falsely pretending that the money was working capital for Cladava Mining Limited when in fact not.
When the matter came up for commencement of trial yesterday, magistrate Mikalile was informed by the state that the DPP had entered a nolle prosequi in the matter.
Magistrate Mikalile then discontinued the matter.
Dr Mahtani was represented in the matter by Michael Mundashi and John Sangwa.
Labels: DPP, FINANCE BANK, RAJAN MAHTANI
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No injustice will prevail - Mahtani
By Maluba Jere
Wed 11 Jan. 2012, 13:59 CAT
FINANCE Bank chairman Dr Rajan Mahtani says no injustice will ever work out against him. In an interview at the Lusaka magistrates' court after criminal proceedings against him were discontinued yesterday, Dr Mahtani said he felt somehow relieved in that justice had been done.
He said he had forgiven those that made false allegations against him. Dr Mahtani said that he needed to make sure that his international reputation which he said was at stake was cleaned.
He said vengeance was not his but for God and that he now seriously needed to consider how to get redress.
"There is the rule of law, justice will prevail and above all, we have the Creator who is the main judge," he said. "No injustice will prevail."
President Michael Sata's government recently gave back Finance Bank to Dr Mahtani and other shareholders after the Rupiah Banda's regime forcibly took over and sold it to First Rand National Bank of South Africa.
Lusaka Chief Resident Magistrate Joshua Banda yesterday discharged Dr Mahtani who was charged with two counts of unlawfully acquiring 25 per cent voting shares in Finance Bank Zambia Limited and money laundering activities involving the same bank.
When the matter came up yesterday, the state told the court that the case was scheduled for commencement of trial but that they had an application to discontinue the criminal proceedings against Dr Mahtani.
After the state made their application, magistrate Banda discharged Dr Mahtani.
Dr Mahtani, a 62-year-old businessman, was in the first count charged with the offence of acquiring beneficial interest in voting shares of a bank without prior approval in writing of the Bank of Zambia.
The offence is contrary to section 23 (1) (2) (a) and (6) of the Banking and Financial Services Act number 21 of 1994.
It was alleged that Dr Mahtani, on dates unknown but between January 1, 2003 and December 31, 2009, in Lusaka, without prior approval in writing of the Bank of Zambia acquired beneficial interest in voting shares of Finance Bank Zambia Limited to enable him to control more than 25 per cent of the votes that could be cast on any general resolution at general or special meetings of the bank.
In count two, Dr Mahtani was charged with money laundering contrary to section 7 of the prohibition and prevention of money laundering Act.
Particulars of the offence were that Dr Mahtani on dates unknown but between January 1, 2003 and December 31, 2009 in Lusaka jointly and whilst acting together with other persons unknown engaged direct or indirectly in a business transaction that involved the acquisition or retention of more than 25 per cent shares in Finance Bank Zambia Limited whereby K81, 700, 253, 230 was realised from the said illegal activity.
Labels: FINANCE BANK, RAJAN MAHTANI
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MMD under Rupiah Banda externalised K50bn — Mahtani?
TIME PUBLISHED - Wednesday, December 7, 2011, 9:15 am
FINANCE Bank Zambia (FBZ) Limited chairperson, Rajan Mahtani, has alleged that the former regime under president Rupiah Banda, externalised over K50 billion to the United Kingdom and South Africa at the time the bank was under seizure. Mr Mahtani claimed that a total of K52 billion was externalised through the Bank of Zambia (BoZ) to named UK and South African-based companies.
He made the allegations at a media briefing in Lusaka yesterday, saying the previous regime separately externalised K17 billion to a London-based company and US$7 million (about K35 billion) to South Africa.
Mr Mahtani alleged that the K17 billion was transmitted to a company in London that was contracted to audit the bank shortly after it was repossessed while a named forensics company from South Africa was specifically contracted to investigate Dr Mahtani and was paid an equivalent of K35 billion ($7 million).
The FBZ chairperson said steps had been taken to ensure that the bank recovered the money because the fees were unjustifiably too high.?
Dr Mathani displays stitches from his open heart operation in South Africa recently. This was during a press briefing in Lusaka.
Mr Mahtani said what was even more worrying was that the audit was undertaken after the bank obtained a court order to restrain the company from going ahead.?
Dr Mahtani also said the decision by the previous government to repossess and sell the bank was ill-conceived and was done to punish him because of the long-standing differences the bank had with a former government official before he joined the government.?
He alleged that the official borrowed a substantial amount of money from the bank to purchase a house and never paid back until the board decided to grab a house situated in Lusaka’s Kabulonga area.?
On the audit, Dr Mahtani said there had been no firm which had ever charged K17 billion for such services and wondered why the BoZ did not engage a local international audit firm.
He said as board chairperson, he was not involved in the whole transaction about the Kabulonga house and there was nothing legally wrong with the decision by the FBZ.
Dr Mahtani claimed that the sale of the bank to First National Bank at K27 billion was purely a political decision and that within the few months it operated under its original shareholders, the bank had made K60 billion profit.?
According to Dr Mahtani, FBZ made minor mistakes because the officials were human beings but such did not warrant the closure of a viable business.?
He said FBZ shareholders, Credit Suisse have resolved to fund the 500 million Euro bonds the Government intended to float and hoped to act as an agent to resell the bonds as a way of showing appreciation to the Zambian Government which had reversed the transaction.?
Dr Mahtani also said FBZ planned to commence the process of listing on the Lusaka, London and Johannesburg stock exchanges and that 40 per cent shares would be off-loaded by 2014.
He said he faced hardships to seek medical treatment when he was operated on at Milpark Clinic in South Africa while officials from the Drug-Enforcement Commission (DEC) followed him without good reasons.
Dr Mahtani said the bank was expected to pay K20 billion in taxes by the end of the year while the number of workers would rise to around 1,000 before the end of next year.?
Meanwhile, FBZ has, with immediate effect, increased salaries for its 734 workers by K2 million across the board with the lowest paid getting at least K4.5 million per month.
[Times of Zambia]
Labels: CORRUPTION, FINANCE BANK, MMD, RAJAN MAHTANI
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God is great, says Mahtani
By Chibaula Silwamba
Tue 04 Oct. 2011, 15:40 CAT
DR Rajan Mahtani says the Rupiah Banda-government grabbed Finance Bank from him and other shareholders in a politically-orchestrated manner out of jealousy, greed and pettiness but God is great that President Michael Sata has given it back.
Reacting to President Sata's reversal of the sale of Finance Bank to South African firm - FirstRand, Dr Mahtani told journalists at State House yesterday that he was grateful to the new President.
"I believe the truth has finally prevailed and I am very glad that
Zambian investment has been restored to Zambians for the benefit of
Zambia. And, at least, it safeguards a thousand employees that were
threatened with losing their jobs. Their jobs are now secure," Dr
Mahtani said. "The focus will be to take the bank to greater levels.
We were very fortunate that we had Credit Suisse as a 40 per cent
shareholder and they have continued to support us; they will come in
with us and I think it Finance Bank will end up being the number one
bank in Zambia."
He said former president Banda's government was unfair to the shareholders.
"It was all politically motivated with intentions to extort something
that didn't belong to them. I think it was just from envy, jealousy
and pettiness and greed on the part of those that were working at it,"
he said.
He explained that institutions such as Zambezi Portland Cement,
Odyssey and others that got loans from Finance Bank did not want to
pay back, hence made a lot of allegations which had now been proven to
be false.
He explained to reporters that he had had open heart surgery.
Dr Mahtani removed the lower part of his trousers and shirt to show
the wounds of where doctors cut the arteries from the leg to put on
the heart when they conducted the surgery on him.
"All the arteries were cut on both legs... For the previous regime to
have said that I had run away when there is this evidence could show
what orchestrated agenda they had, but God is great. It's God
Almighty's intervention," said Dr Mahtani.
The Banda-administration grabbed Finance Bank from Mahtani and other
shareholders and sold it to FirstRand for only K27 billion.
Labels: CORRUPTION, FINANCE BANK, RAJAN MAHTANI, RUPIAH BANDA
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Mahtani gets back Finance Bank
TIME PUBLISHED - Monday, October 3, 2011, 3:17 pm
Republican President Michael Sata has instructed Finance minister Alexander Chikwanda to with immediate effect return Finance Bank Zambia Limited to the rightful owners.
Finance bank had been sold to First Rand Bank of South Africa by the previous government for alleged breach of the Banking and Financial services Act
President Sata says after carrying out a research, he has noted that they are no proper documents for the sale of Finance bank.
The president was speaking at State house this morning during the swearing in ceremony of Amos Malupenga as new Information and Broadcasting services permanent secretary.
The Bank of Zambia, last year, seized Finance Bank from its shareholders for violating the law through unsound practices, including insider borrowing.
The Central Bank last month announced the sale of Finance bank to South Africa’s First Rand at a cost of $5.4 million, a move that raised a lot of concerns from various stakeholders.
And former Finance bank chairman Rajan Mahtani says the truth on the sale of the bank has finally prevailed.
Dr. Mahtani says Zambian investment has been restored to Zambians adding that at least a thousand jobs that were at stake have been secured.
Speaking to journalist at State house this morning, Dr. Mahtani said the sale of the bank was politically motivated by the previous MMD government for reasons known to themselves.
[QFM]
Labels: FINANCE BANK, MICHAEL SATA, RAJAN MAHTANI
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Sale of FBZ saddens Mahtani
By Amos Malupenga
Fri 16 Sep. 2011, 13:55 CAT
DR Rajan Mahtani yesterday said he is saddened to read about the government's sale of Finance Bank, the bank he struggled to build for over 20 years with other stakeholders.
And Finance Bank Zambia (FBZ) employees have expressed displeasure at the bank's new owner, South Africa's First National Bank (FNB), decision to force them to resign and re-apply for jobs without getting their redundancy packages for the many years they worked.
In an interview from Johannesburg where he has been recuperating after undergoing open-heart surgery over a month ago, Dr Mahtani, a former Finance Bank executive chairman, said he had decided to return home against the doctors' advice because he wants to continue his legal battles and prove his innocence. He said no matter how long it would take, the truth about Finance Bank will eventually come out.
"Contrary to the advice of the physicians and specialists who insist on my recuperating for eight weeks after surgery in Johannesburg, I have decided to return to Zambia and recuperate at home instead (in the fervent prayer that there would be no complications)," Dr Mahtani said.
"This will give me the opportunity of continuing the legal battles to prove my innocence to the many allegations made against me and to regain my integrity and dignity. I believe in the rule of law in Zambia and the judiciary's ability to maintain the highest ethics in the legal profession.
"I am indeed saddened to read about the sale of Finance Bank Zambia Limited which took twenty three years to establish through the hard work and dedication of all stakeholders and the employees who built a Zambian institution of pride and to whom I salute with gratitude. These matters are in court and since that makes it subjudice, I will refrain from expressing my sentiments except to assure my colleagues that ‘truth and justice will finally prevail' and that is a Biblical principle."
Dr Mahtani said he was grateful for the mercy and grace of Jesus Christ, the government of Zambia, the churches, the staff at Care for Business in Lusaka and the University Teaching Hospital, all friends and family for the support, prayers, and kindness during his ordeal of a major cardiac open heart surgery.
The surgery consisted of a quintuple coronary artery by pass grafting following his heart attack in Zambia.
"It is sad that this medical condition could have been avoided had I been allowed to seek medical reviews on a regular basis," Dr Mahtani, who was expected in Lusaka last evening, said. And over 1,000 FBZ employees are affected without government's intervention forthcoming.
According to sources at the bank, FNB officials addressed the workers on Wednesday where they told the workers to resign.
"FNB announced during a meeting at Mulungushi International Conference in Lusaka that the only way they could accept to employ us under FNB was if we could write letters to resign our positions under Finance Bank," the source said.
"But workers feel aggrieved because most of them had no plans of resigning, perhaps throughout their work career. It's very unfair for First National Bank to run away from its obligations of paying us our benefits. This situation was not caused by the workers, so there is no way we can lose our benefits which we have worked for, for as long as Finance Bank has been in existence. Some of us have worked for up to 20 years."
The sources said the government had not disclosed the details of the sale of FBZ to FNB and how it would affect the workers.
The sources said the government had not even met the workers to address their problems, particularly the resignation and reapplication process.
"According to a bit of knowledge we have is that labour laws in Zambia do not allow someone to move from one employment to another, like it is happening with FBZ and FNB, without the involvement of the union and the labour commissioner," the sources said.
"Workers don't even know their future under this circumstance. We need to understand the nature of transaction and how it affects us. FNB asked the workers to resign and accept new employment. But the workers are asking, ‘what about the years we have worked? Where are our benefits?' Let FNB declare us redundant or put us on early retirement and then pay us our money after which we decide whether to take up the job offers they are giving us or not."
The sources said FNB was only ready to pay leave days to workers, which was unfair to the employees.
"They are asking us to resign from an organisation that had conditions of services and that we should join an organisation without a signed collective agreement…no signed conditions of services, it's like verbal agreement."
The sources explained that throughout the period, December 2010 to date, workers had not been given a salary increment because the Bank of Zambia (BoZ) refused to do so under the pretext that the FBZ was under repossession.
BoZ this week announced the sale of FBZ to FNB for about K27 billion.
Labels: FINANCE BANK, FIRST RAND GROUP, RAJAN MAHTANI
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COMMENT - Another question is - what did First Rand do to get this bargain? Is any company in Zambia at risk of government seizure and sale to a foreign competitor, or just the ones suspected of financial ties to the political opposition? Or when it is election time?
Sale of FBZ will be reversed next week - Nawakwi
By Chiwoyu Sinyangwe
Thu 15 Sep. 2011, 13:55 CAT
FIRSTRAND is risking its money by buying Finance Bank Zambia Limited as the "haste" transaction will be reversed next week when a new government takes over, says Edith Nawakwi.
And Nawakwi has warned that some people close to the transaction may end up in prison for hastily selling FBZL even in the absence of a functioning Cabinet. FNB Zambia is a subsidiary of FirstRand, the bank whose top officials were appointed to manage FBZL after it was forcibly taken over by the Bank of Zambia (BoZ) last December.
FirstRand will operate all 34 branches and 16 agencies of Finance Bank, while the BoZ would continue to run its problematic assets, such as those which were currently under litigation, the central bank said.
Finance Bank has the largest rural network among Zambian commercial lenders.
Commenting on BoZ's decision to sell FBZL to First National Bank Zambia for K27 billion, Nawakwi said the transaction of the nature of FBZL only heightened locals' resentment of foreign capital and calls for nationalisation of foreign companies.
"This is complete mayhem and rubbish and I warn them that we will use uncle Robert Mugabe's tactics, and because of this, that is why you have leaders who are seen as anti-international investments," said Nawakwi, who is the president of Forum for Democracy and Development (FDD).
"No one is anti-international investments. We want the private sector to take root in this country. We want Zambians to participate fully for wealth creation of this country together."
Nawakwi wondered why government was so in a hurry to close the FBZL sale deal before elections next Tuesday.
"I take strong exception to selling an asset of this magnitude to a foreign company at the eve of an election. Caleb Fundanga should stop it because this is what makes people go to Chimbokaila Lusaka Central Prison," she said.
"What is the haste? It is just the civil service which is concluding this transaction? Since there is no Cabinet sitting, then who is making the decisions? Is it the one minister left there - President Rupiah Banda and this super minister of legal affairs ‘sir' George Kunda? You cannot behave in the manner they want to behave. FirstRand Bank should understand that this election is anybody's win. They should not comfort themselves to think that their friends are winning. They should understand that they are putting their money at risk."
Nawakwi said the whole transaction on FBZL, which was built with the toil and sweat of savings of ordinary Zambians, lacked prudence.
"They (FirstRand Bank) were the consultants; they cannot be the best bidders. We cannot ask a frog to empty its own pond," said Nawakwi.
"And the worst part of this transaction is that there is no government. Who has authorised this? I am so passionate about Zambian ownership and Zambian empowerments, for me I will reverse this sale."
Nawakwi, the sole female finance minister in Zambia's history, said if BoZ found that ex-FBZL shareholders led by Dr Rajan Mahtani had committed heinous banking offences, the bank should have been sold to Zambians.
"Even the Banda brothers President Banda's children are Zambians "if they do it legally, why not? We have super bankers here, Zambian ladies are managing these international banks, sure we can put a team together to manage Finance Bank on behalf of the Zambian savers and the wealth will remain here," said Nawakwi.
"You want to export our wealth to South Africa so that we continue printing our ballot papers in South Africa so that we continue going for cleaning our noses in South Africa… this is totally unacceptable, especially at the eve of an election. Tell all directors and everyone who is a shareholder in FirstRand Merchant Bank in no uncertain terms that this election is anybody's win and they should stop the transaction. And Caleb Fundanga, if he thinks he can conclude such a transaction without ministers in office, he should know that this is why many people end up in Chimbokaila."
Labels: EDITH NAWAKWI, FINANCE BANK, FIRST RAND GROUP, RAJAN MAHTANI
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Rupiah instructed Oddysseas to complain about Mahtani - Sangwa
By Maluba Jere
Mon 18 July 2011, 11:20 CAT
LUSAKA lawyer John Sangwa has testified that Odys Works managing director Oddysseas Mandenakis told him that President Rupiah Banda instructed him to complain to the Drug Enforcement Commission over problems he was having with Dr Rajan Mahtani.
Opening his defence before deputy director for subordinate courts Charles Kafunda who sat as magistrate in a case where he and Dr Mahtani are facing five counts ranging from forgery, uttering a false document and fabricating evidence, Sangwa testified that Mandenakis told him that he met President Banda with the help of his lawyer Sakwiba Sikota.
Sangwa said Mandenakis told him that at that meeting, he explained to President Banda the problems he had with Dr Mahtani regarding the completion of a hotel project Radisson Blue near the Arcades roundabout in Lusaka.
“Mr Mandenakis confirmed to me that on the instruction of the President, he went and made a complaint to the Drug Enforcement Commission,” Sangwa said.
“With this background in mind, I told Mr Mandenakis that it was impossible for him and Dr Mahtani to work together in that trust between them had been eroded and I explained to him that the way forward in resolving the impasse was for either Dr Mahtani or himself to exit from hotelier.”
He also said after giving him that advice, Mandenakis informed him that there had been earlier attempts to resolve the matters but that the discussions had collapsed.
Sangwa said his advice to Mandenakis was that it was in his interest to find a solution to the problem in that his company had already borrowed heavily from financial institutions and that interest was still accruing.
He said Mandenakis said he was not in a position to buy out Finsbury Investments and that the only option was for Finsbury to buy out Oddys Works.
Sangwa said when Mandenakis learnt that he Sangwa was Dr Mahtani's lawyer, he asked if he could intervene in their problem, adding that it was clear that Mandenakis wanted an exit from hotelier deal provided there was an improved offer from Dr Mahtani.
He told the court that after several meetings about the project, Mandenakis was offered US $2.5 million from the initial offer of US$2 million, although Mandenakis was demanding US $3.5 million.
Sangwa said Mandenakis told him he would arrange for a meeting which was to be attended by himself, Mohammed Salama and Sikota.
He said at that meeting of July 25, 2010, Salama asked what offer Sangwa had from Dr Mahtani and that he Sangwa said he had none, adding that the objective of the meeting was to explore whether or not they were willing to settle the differences amicably.
Sangwa said at the meeting, Salama turned out to be vulgar and abusive in his language. He testified that he was shocked to learn during trial in this case that the meeting of July 26, 2010 was recorded.
“I was doing my job as a lawyer and I can't think of any reason why anybody would record such a meeting and in a clandestine manner,” Sangwa said. “It can only be with a view of entrapment.
There was no indication that there was a recording. I have known Mr Mandenakis for 20 years and my involvement with Dr Mahtani was at his instance. It was therefore shocking for me to learn that the meeting was recorded and that is why I had no problem having it played before this court.”
Earlier, Sangwa testified that he was alarmed when he received a letter dated July 12, 2010 purported to have been written by Dr Denny Kalylaya from Bank of Zambia (BoZ).
He said he was alarmed by the contents of the letter because it was talking about taking over shares in Finance Bank and that it also made reference to Sikota, Dr Mahtani, Mandenakis and Mohammed Salama.
“I was also alarmed in that the letter made reference to instructions from the President. The mere mention of the name of the President is not something to be taken lightly,” he said.
Sangwa further testified that in that letter, there was also mention of Zambezi Portland Cement and Credit Suisse, among other issues.
He said in the course of his dealings, he had an occasion to meet with officers of Credit Suisse in London who confirmed that they had been interviewed by officers from BoZ in relation to their interest in Finance Bank Zambia (FBZ).
Sangwa told magistrate Kafunda that officers from Credit Suisse also told him that they had discussions with the president in Dubai over their interest in FBZ. He said he then decided to write to the BoZ governor in his effort to protect his client's interests and attached the July 12, 2010 letter as well.
Sangwa said he copied the letter to all the interested parties for information purposes so that in an event of possible litigation, they would have known the basis for such litigation.
He said he finally had a meeting with BoZ governor where the contents of the letter were discussed.
Sangwa added that on July 29, 2010, he wrote thanking the BoZ governor for seeing him at such short notice and also noted the positive environment that characterised the meeting.
He said the governor responded to both his letters and that in relation to the first letter in which he sought the bank's confirmation, the bank responded that the July 12, 2010 letter was a forgery and that it did not emanate from BoZ.
Defence continues
Labels: COURTS, JOHN SANGWA, RAJAN MAHTANI, RUPIAH BANDA
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Lawyer did not betray me, says Mahthani
By Ernest Chanda
Wed 13 July 2011, 11:59 CAT
DR RAJAN Mahtani’s office says one of his lawyers, Steven Malama did not betray him but simply recused himself from a forgery case.
Disputing Monday’s story from an online publication The Zambian Watchdog entitled ‘Another lawyer betrays Rajan Mahtani’; which has since been removed from the website, Dr Mahtani’s office said in a statement yesterday that the story was a complete falsehood.
The office has since demanded an apology from the author of the story, saying the article was meant to defame Malama’s character and integrity and lower his standing in the legal profession.
“It is sad that the author of the previous article abused the Watchdog by presenting a false and deliberately distorted article on the court proceedings of today Monday! It seems this mischief has been in play from the time Rajan Mahtani has had many allegations made against him none of which have yet been proven,” the statement read.
The statement further said Malama did not betray Dr Mahtani, but simply recused himself because the state indicated that it would consider him as its witness.
The statement said at the time the state indicated on June 1 this year that it would consider calling Malama as its witness, the court advised it to make a formal application which had not yet been done.
“Mr Malama SC is a very senior lawyer in the profession and the legal fraternity. He expressed disappointment at the lack of courtesy on the part of the prosecution of advising him of their intent earlier since the case has progressed considerably.
He awaited a formal application but this was not as yet presented to the court. He decided consequently, to recuse himself from this case in the interest of the trial being free and fair,” read the statement.
“Dr Rajan Mahtani is charged with Parvathi Nachimuthu and Chisha Mutale. This relates to Zambezi Portland Cement Limited where Mr Steven Malama SC is chairman. This case was initiated by the DEC Drug Enforcement Commission whose ambit does not cover prosecutions of such charges and the only proper authority would be the police.”
Labels: RAJAN MAHTANI
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Mahtani's trial fails to take off
By Namatama Mundia
Fri 06 May 2011, 04:01 CAT
TRIAL in a case where Dr Rajan Mahtani and co-accused are charged with obtaining credit by false pretences yesterday failed to commence because the State was not ready. Dr Mahtani and co-accused David Peter Kamalarajan Kanag-anayagam are charged with one count of obtaining credit by false pretences contrary to the Laws of Zambia.
It is alleged that on dates unknown but between February 1, 2008 and February 29, 2008 in Ndola, Dr Mahtani and Kanaganayagam jointly and whilst acting together with other persons unknown, in incurring a debt obtained K6.5 billion from Finance Bank by falsely pretending that money was working capital for Cladava Mining Limited (CML) when in fact not.
When the case came up yesterday, the state told principal resident magistrate David Simusamba, that they were not ready to commence trial and applied for an adjournment to next month.
Magistrate Simusamba subsequently adjourned the case to June 15.
Labels: COURTS, RAJAN MAHTANI
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How State House ´fixed´ Rajan Mahtani
* Thursday, March 17, 2011, 13:15
* Opinion Editorials
In or about October of 2009 a Mr. Kelvin Sampa held a press conference at the Intercontinental Hotel in Lusaka at which he made numerous allegations about Dr.Rajan Mahtani and the Companies in which he is involved. Immediately after the said press conference, Mr. Sampa, using the ‘Watchdog’ internet service, published a 13 page Article which was totally defamatory, malicious, libelous and scandalous.
An appropriate complaint was lodged with the Police and Dr. Mahtani’s Advocates applied for an injunction against the said article which injunction was refused. Mr. Kelvin Sampa boasted that his authority emanated from the political front and that no actions taken out by Dr. Mahtani would ever succeed.
Some of the alleged initiators of the said article was Mr. Antonio Ventriglia and Mrs. Manuela Sebastiani Ventriglia (the Ventriglias), Directors in Zambezi Portland Cement Limited (ZPC) who engaged Mr. Kelvin Sampa (presently also their Public Relations Manager). It is believed that Mr. Sampa used his political connections to allow the Ventriglias meet a number of Politicians and Government Officials in order to fabricate allegations on what is a commercial transaction and subjudice.
The other known instigator is a Mr. Odysseas Mandenakis from a company called Hotellier Limited, whose main contractor is a Mr. Mohamed Salama of Flame Promotions and Procurements Limited (second and third instigators). Mr. Salama engaged Mr. James Banda, the President’s Brother, around July 2009 on a ‘retainer’ to obtain political advantage. Mr. Salama also induced a number of politicians with construction and renovations favours.
Hon. Sakwiba Sikota, S.C. used his political platform for a meeting with the instigators and other Government Officials at State House. Allegations fabricated at that meeting caused complaints to be lodged with the Drug Enforcement Commission (D.E.C.) and Hon. Sakwiba Sikota, S.C. was unethically appointed an agent for the DEC and the Bank of Zambia.
The ‘Watchdog’ informed the public at large and alleged that Dr. Mahtani had fled the Country and further alleged that there was an international warrant for his arrest. In view of Dr. Mahtani’s fiduciary responsibility he stepped down as Chairman of the Board of Finance Bank Zambia Limited on 19th February, 2010 to enable him defend his dignity and integrity.
All instigators are represented by Hon. Sakwiba Sikota, S.C. On or about 18th February, 2010 Mr. Odysseas Mandenakis requested Mr. Dick King, then Managing Director of Finance Bank to attend an urgent meeting at his home at approximately 18.00 hours. At that meeting Hon. Sakwiba Sikota, S.C. was present and presented Mr. King with a letter addressed to Dr. Mahtani’s Advocate Mr. Michael Mundashi, S.C. of Mulenga Mundashi & Co., making numerous allegations and claims. Mr. Salama then appeared at this meeting and put his revolver on the table, claiming that his briefcase contained tapes and recording equipment. A frightened Mr. King requested for time to study the contents of the unsigned letter. At approximately 20.00 hours the next evening (19th February 2010) His Excellency the President phoned Mr. King informing him of his knowledge of the meeting and requested for an urgent audience with Credit-Suisse, and advised Mr. King not to divulge any information to Dr. Mahtani. Hon. Sakwiba Sikota, S.C. readdressed the letter (handed over to Mr. King) to Credit-Suisse which letter also was unsigned and marked ‘Without Prejudice’.
Copies of the said letter were given to the Attorney-General, Minister of Finance, Special Assistant to the President (Economy) Dr. Richard Chembe and Special Assistant to the President (Press) Mr. Dickson Jere and e-mailed to Mr. King.
A meeting was convened in Dubai whilst His Excellency the President was in transit to China on Tuesday, 23rd February, 2010 and attended by His Excellency the President, the Attorney-General, The Honourable Minister of Finance, Dr. Richard Chembe, Mr. Dickson Jere, Mr. Dick King and Credit-Suisse Officials.
In the third week of March, 2010, Mr. Dick King was invited to State House at a meeting chaired by His Excellency the President and attended by the Attorney-General, Dr. Richard Chembe, Special Assistant (Economy), Mr. Dickson Jere, Special Assistant (Press) and Hon. Sakwiba Sikota, S.C. Mr. King was directed to provide Hon. Sikota, S.C. with any information he required. By this time Bank of Zambia entered into a Memorandum of Understanding with the DEC and other agencies of Government in relation to all or any matters related to Dr. Mahtani and his Companies.
Dr. Mahtani voluntarily returned to Zambia on Wednesday 24th March, 2010 and held a very short press conference on that day. He asserted his confidence in His Excellency the President and advised that all allegations were really of commercial natures and that he (Dr. Mahtani) was confident that he would be vindicated by the Rule of Law.
In May, 2010, a South African firm ENS Forensics (Pty) Limited, part of Edward Nathan Sonnenbergs was appointed by the Attorney-General, Bank of Zambia and DEC to investigate any criminal activity on the part of Dr. Mahtani. In June 2010 Deloittes London was engaged by the Bank of Zambia at a cost in excess of One Million five hundred thousand pounds sterling to audit Finance Bank Zambia Limited.
All Executives of Companies associated to Dr. Mahtani have been interrogated under harrassment by the DEC. Dr. Mahtani was interrogated on the 4th of June, 2010 when his passport was seized purportedly under Section 15 of the Prohibition and Prevention of Money Laundering Act of 2001.
On the 4th of August, 2010 Dr. Mahtani was arrested and charged with the offences of:
1.
Having control of more than twenty-five percentum (25%) votes cast in Finance Bank Zambia Limited without prior approval of Bank of Zambia contrary to Section 23(2)(b)(4) as read with Section (6) of the Banking and Financial Services Act Cap 387 of the Laws of Zambia; and
1.
Money Laundering contrary to Section 7 of the Prohibition and Prevention of the Money Laundering Act 14 of 2001 involving dividends paid into Finsbury Investments Limited’s Bank Accounts.
The Chairman of Finance Bank Zambia Limited from the first week of March 2010 was Dr. Jacob Mwanza and the previous Board of Directors resigned then. Bank of Zambia only approved the new Board of Directors in November 2010 leaving the affairs of the Bank under the Chairman and the Managing Director Mr Dick King.
It is apparent that Bank of Zambia moved from its regulatory role to a ‘politically motivated role’ since the three instigators were protected politically from settling their debts with the Bank on the assurance that if the Bank goes under they would be saved from settling legally binding debts and could share the ‘spoils’ with them. It is alleged that old ‘scores’ by former President F.J.T. Chiluba with consent from the present administration masterminded his vengeance with this well orchestrated scheme.
Three subsequent charges were made on Dr. Mahtani covering:-
1.
A fraud and forgery charge on 1st Ocotber, 2010, jointly with one of his lawyers Mr John Sangwa over a letter purported to have been written by the Bank of Zambia on 12th July 2010 and which Mr Sangwa sent under a covering letter to Bank of Zambia on 27th July 2010 enquiring the Bank of Zambia’s position on this document which allegedly directed the investigation authorities to convict Dr. Mahtani and his associates even under ‘ghost charges’.
1.
On 13th October 2010 Dr. Mahtani was charged with Mr. Mr. Peter Kanaganayagam one of the Directors of Cladava Mining Limited for “obtaining credit facilities under false pretences. The only other Director of Cladava Mining Limited is Ms Maria De Rosa (now a wife of Daniel Ventriglia) who, for reasons best known to the authorities, has not been charged for any offence. Dr. Mahtani is neither a shareholder nor a Director of Cladava Mining Limited.
1.
On 26th January 2011 Dr. Mahtani was charged with Mrs Parvathi Nachimuthu and Ms Mutale Chisha for ‘forgery’.
The Media has inferred in the many reports that matters pertaining to Dr. Mahtani, a Zambian Citizen in business for over forty years but as a family covering over one hundred years, that the plan is well ‘orchestrated’ to satisfy the evil desires of the politicians and their accomplices. This is a manifestation of ‘pull him down’ a ‘PHD’ of many Zambians envious of success.
Bank of Zambia initially portrayed that Finance Bank was ‘insolvent’ in an endeavour to create ‘panic’ in the market and to justify their role. Instead of assisting Dr. Jacob Mwanza to ensure the loans of the ‘instigators’ were paid back BOZ with Government machinery prevented such repayments. Despite this manoeuvre, they have finally conceded that Finance Bank is solvent. They now suggest that there may be an ‘adequacy ratio’ deficiency! Who has created this from the time Dr. Mahtani stepped down as Chairman? Is this not a successful plan on the part of Bank of Zambia and the State machinery to take away a successful Bank with over a thousand employees from the ‘founder’ and his co-shareholders? Is this a form of Nationalization to settle scores?
What scores?
1.
An untrue allegation that Finance Bank lent money to the Post!
2.
An untrue allegation that Dr. Mahtani financially supported the opposition PF?
3.
An untrue allegation that Dr. Mahtani, when Chairman of Finance Bank took one of the properties of the President under collateral of the borrowing by the President’s company?
4.
An untrue allegation that the friendship with the Mwanawasa family is a threat to the MMD?
5.
The fate of over 1000 employees and their extended families just to punish one innocent Zambian?
6.
Is this Government’s philosophy of how to deal with Zambian investors whilst wooing for foreign investors? Why does Government get involved with Zambian private institutions?
The truth will finally prevail in all these situations but at what cost and damage? In whose hands is vengeance when you cannot rely on your Government and its machinery to protect its citizens and their human rights? Posterity will prove the ‘metal’ of our leaders and their honesty.
CREDIT SUISSE SENDS HIGH POWERED DELEGATION TO ZAMBIA TO CLAIM ITS 40% SHAREHOLDING IN FINANCE BANK ZAMBIA LIMITED.
Credit Suisse delegation consisting of Mr. Christopher Colson and Mr. Markus Niemeier arrived in Zambia on Tuesday 8th March, 2011 to make representations at the Bank of Zambia ‘hearing’ at Mulungushi Conference Centre claiming the ownership of 40% (forty) of the equity of Finance Bank Zambia Limited. Their lawyers in London D.L. Piper have appointed Chibesakunda & Co., to represent them.
They also met Bank of Zambia on Thursday at 9.30hrs and are delighted to hear that Finance Bank Zambia Limited is ‘solvent’ and any deficit in adequacy capital is not beyond the means of Credit Suisse.
Credit Suisse is a Swiss International Bank represented throughout the World but their first interest in Africa was in Finance Bank Zambia Limited.
Editor´s Note: The Watchdog takes the assertion made inhere regarding the Watchdog as opinions of the author as the Watchdog has never had any dealing with the people mentioned above. We only publisheed the news we gathered.
Labels: FINANCE BANK, MMD, RAJAN MAHTANI
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Court stops BoZ from selling FBZ
By Chibaula Silwamba
Thu 30 Dec. 2010, 04:02 CAT
THE High Court has granted an injunction restraining the Bank of Zambia from selling Finance Bank Zambia Limited or interfering with its shareholding.
According to a ex-parte order for injunction granted to shareholders – Finsbury Investments Limited (first petitioner), Clarkwell Limited (second petitioner), Job Albert Samuel (third petitioner), Chewe Kanyanta Puta (fourth petitioner and administrator of the estate of Pat Bwalya Puta) and Patrick Chamunda (fifth petitioner) – against the Bank of Zambia (first respondent) and First Rand Limited (second respondent), Ndola High Court judge Munalula Lisimba restrained the central bank and First Rand Limited from interfering with the petitioners’ shares in Finance Bank.
“It is ordered and directed that the respondents Bank of Zambia and First Rand Limited be restrained and an injunction is hereby granted restraining them, whether by themselves, or by their servants or agents or any of them or otherwise howsoever from: (1) interfering with or dealing with in any manner whatsoever with the petitioner’s shares in FBZL; (2) selling FBZL whether as a going concern or its assets until after the inter-parte hearing of the application for the injunction on the 4th day of January, 2011 at 09:00 o’clock in the forenoon or until further order,” the injunction order dated December 28, 2010.
“Penal notice, if you the within named the Bank of Zambia neglect to obey this order, you, Dr Caleb Fundanga, the governor of the said Bank of Zambia will be liable to the process of execution for purposes of compelling the said Bank of Zambia to obey the same.”
In his affidavit, Finsbury Investments Limited chairman Dr Rajan Mahtani on behalf of the four other petitioners, stated that on December 10, 2010, the Bank of Zambia took possession of Finance Bank and terminated the services of the board, chief executive officer and senior managers and the central bank assumed the full and exclusive powers of management and control of the commercial bank.
He stated that the reasons for this action were never communicated to the shareholders. Dr Mahtani stated that on December 11, 2010, he sent a letter to Dr Fundanga expressing concerns over the decision taken by the Bank of Zambia and informed him that the shareholders were ready to meet and discuss with him whatever problems existed at Finance Bank.
Dr Mahtani stated that in the same letter, he indicated that if there were financial problems and breaches of the laws at Finance Bank, shareholders were willing to inject capital and put in measures to ensure the commercial bank complied with the relevant legal provisions.
Dr Mahtani stated that the Bank of Zambia sent a brief to shareholders dated December 22 titled ‘enforcement decision and order’ in which it had purported to terminate their shareholders’ interest in Finance Bank with immediate effect.
“The first respondent BoZ has indicated therein that each shareholder (petitioner) will be compensated for their shares at a value (as at the date of possession of FBZL) to be determined by the court pursuant to Section 84A (g),” Dr Mahtani stated.
“The First Respondent has also indicated that for the avoidance of doubt, each shareholder ceases to be a shareholder in FBZL forthwith and will be given notice when the First Respondent makes an application to court for the determination of the value of the shareholder interest in FBZL.”
He stated that BoZ had tried to justify its decision and that, according to the brief to the minister, the next step in the plan of action was to vest all the shares of Finance Bank in the Zambian government as a temporary measure.
Dr Mahtani stated that the ultimate goal was to split Finance Bank into two – the good bank and bad bank.
He said the good bank would be placed under a different entity and would be available for sale to interested parties with priority given to First Rand Limited.
Dr Mahtani stated that it was necessary to grant the application ex-parte with a return day of the inter-parte hearing because it was highly likely that once aware of this application, BoZ would take steps to frustrate this application.
“There is good reason for this apprehension,” Dr Mahtani stated.
He explained that on December 9, 2010 when he became aware that the Bank of Zambia was going to take possession of Finance Bank in a manner that would be in violation of the provisions of the banking and financial services Act, he applied for an injunction to stop the possession until after the hearing of the matter.
He stated that the court set December 14, 2010 as date for inter-parte hearing but the Bank of Zambia took possession of Finance Bank on December 10, 2010.
Dr Mahtani stated that the shareholders, therefore, started another case in court on December 13, 2010, demanding that the central bank show cause why possession should not be terminated but the ruling had not been delivered as at December 27, 2010.
According to the petition, current shareholders of Finance Bank - the sixth largest bank out of 20 banks in Zambia - are Finsbury Investments Limited (25 per cent), Credit Suisse Investments (40 per cent), JAT Samuels (6.5 per cent), Clarkwell Limited (25 per cent), Pat Bwalya Puta (2.5 per cent) and Patrick Chamunda (one per cent).
Labels: BOZ, CALEB FUNDANGA, FINANCE BANK, RAJAN MAHTANI
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COMMENT - Hmmm... Something tells me there is a defection in the works. Not that I disagree with anything that is said, of course.
Fixing Mahtani amounts to witchcraft - Shakas
By Chiwoyu Sinyangwe
Sat 25 Dec. 2010, 04:01 CAT
MANOEUVRES to fix Dr Rajan Mahtani through the BoZ takeover of Finance Bank amounts to witchcraft, says Jonas Shakafuswa. And Shakafuswa has charged that it was wrong for the government to take over Finance Bank simply because of suspicions that its former board chairman Dr Mahtani is suspected to be a financier of the Patriotic Front.
Shakafuswa, who is also Katuba MMD member of parliament and former deputy Minister of Finance, condemned what he termed as manoeuvres by the government to fix Dr Mahtani through the BoZ.
“This is very unfortunate and very wrong for this country and if somebody is dancing, then I think ni muloshi ‘a witch’ and we don’t need such kind of a person in this country and the time will come when we will speak loud through the vote,” Shakafuswa said.
He said Finance Bank should not be killed simply because of suspicions that its former board chairman Dr Rajan Mahtani was suspected to have been one of the key financiers to the Patriotic Front.
“This is not a one party state. If Mahtani was funding Michael Sata…anyone even if they want to fund anyone, they have the right to do so,” he said.
He said the Zambian would have the last laugh next year.
“I want to tell the Zambians that if that thing government’s takeover of Finance Bank is out of malice, they shouldn’t be scared because people doing that, their days are numbered,” he warned.
“Because you can’t kill a bank like Finance Bank…where are you going to take all those employees? Where are you going to take their children? Is BoZ going to employ them? The Bank of Zambia should have come up with the solution than rush into running down a very solid bank like Finance Bank.”
And Shakafuswa has said money laundering offence has become laughable due to the selective nature with which Drug Enforcement Commission was applying the law.
“We are told of ministers with over US $600,000 in their accounts, then you go for someone who is got US $100,000 in an account,” said Shakafuswa.
“This is our country and DEC doesn’t belong to a few individuals. It is an institution which belongs to the people of Zambia. The Zambia Police doesn’t belong to a few guys, it belongs to the people of Zambia.”
He was commenting on the recent interrogation of PF chairman of elections Geoffrey Mwamba and party president Michael Sata over US$100,000.
Labels: FINANCE BANK, JONAS SHAKAFUSWA, RAJAN MAHTANI
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Finance Bank shareholders face arrest
Wednesday, December 22, 2010, 8:23
THE Bank of Zambia (BoZ) says some Finance Bank Zambia Limited (FBZ) directors face arrest after revelations that they allegedly awarded themselves huge loans running into billions of Kwacha without board approval.
And assistant director Bank Supervision Department Mbinga Kafunya said on Zambia National Broadcasting Corporation’s (ZNBC) open line live programme on December 21 that part of the bank’s findings were that some shareholders and directors obtained huge non-performing loans in billions of Kwacha.
Mr Kafunya said BoZ had been engaging FBZ since 2007 to try to normalise the situation but its efforts were in vain.
“What used to happen was that the directors would give each other loans without the board’s approval.
In some cases, a shareholder or director would direct that a loan be given to them. It reached a point where the bank was unable to pay its depositors,” he said.
And BoZ bank Supervision director Lameck Zimba said the central bank is studying breaches in the running of Finance Bank with a view to bringing culprits to book.
Mr Zimba said no-one should think they are untouchable and above the law. Mr Zimba said the decision by BoZ to take over FBZ was made in good faith and within the powers vested in the central bank.
He said BoZ had to protect the economy and the financial system.
Mr Zimba assured the nation that BoZ will not allow FBZ to close as it has solicited for government support to keep the bank afloat.
“The bank will continue operating normally and after the 90 days provided for in the law, we will make a decision. We will not allow Zambians who save with Finance Bank to suffer. We did our homework before taking over the bank,” he said.
Mr Zimba urged depositors to continue transacting normally. He thanked the people of Zambia for showing confidence in BoZ. Mr Zimba said the BoZ is only mandated to manage the institution and not to nationalise it. He also refuted media reports that the takeover of FBZ is intended to victimise one of the shareholders, Rajan Mahtani.
“How can we victimise one person when there are six shareholders of Finance Bank? We can’t take such drastic action to punish one individual because according to the law, no- one can own more than 25 per cent shares in a bank,” he said.
He said FBZ is a very strategic institution that should be maintained.
Mr Kafunya urged the people of Zambia to distinguish who is acting in public interest and good faith between the BoZ and some media institutions which have engaged in irresponsible reporting.
“Since December 10 when we took over the bank, not a single depositor has failed to get their money. So far, we are comfortable with the situation because we made projections before we took over and we are still within what we projected,” he said.
He also said the law allows the BoZ to appoint agents to manage a bank that has been taken over.
He said BoZ chose First Rand Company because it has handled such cases in Botswana, Namibia and South Africa.
[Zambia Daily Mail]
Labels: FINANCE BANK, LAMECK ZIMBA, MBINGA KAFUNYA, RAJAN MAHTANI
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COMMENT - " Rupiah doesn’t know that the exercise of power must be the constant practice of self-limitation and modesty " - and he shouldn't. This is why the 'good fellow hypothesis' doesn't work, and why the only way forward is to have a proper separation of the powers of state, spelled out in the highest law in the land, the Zambian Constitution. People who spend most of their lives getting to the top don't voluntarily put limits on themselves. Only the courts and the law can do that.
Reckless bravado
By The Post
Wed 15 Dec. 2010, 04:00 CAT
The government and its central bank, the Bank of Zambia, have caused the run that Finance Bank is today experiencing. Whatever the problems at Finance Bank were there were better ways of dealing with that bank than what they have done. What they have done amounts to an assassination of the bank.
Today, Finance Bank is seriously bleeding and may die. Why? In the face of many alternatives
Rupiah Banda’s vindictive government chose to use a nuclear bomb to get rid of one individual, when one shot from a pellet gun could have done the job.
It is clear that the decision making process that has brought Finance Bank where it is was driven by emotion and strong feelings of hatred for whatever reasons. We say this because it does not make sense for someone to bomb the whole country just to destroy one person who one has problems with. But this is what they have done. There is no doubt that Rupiah has problems with Rajan Mahtani and in the quest to destroy him he has gone for the whole bank.
Yes, Rajan is the major shareholder and founder of this bank but today this bank is far bigger than him. And Finance Bank, strictly speaking, does not belong to Rajan – it belongs to all those who use it, to all those who earn a living from it, to all those who have deposited their money in it, to all those who work for it. Rajan does not own Finance Bank, he only holds shares in it.
And because of this the effects of the destruction of this bank will go far beyond Rajan. And this is what those who decided to use such excessive force to settle personal differences should have thought about before deploying the means that they chose.
Today, our people have the option of withdrawing all their money from Finance Bank and they are doing so amass – causing a run on the bank. But this is not the end of the story. The story does not begin and end with their deposits being withdrawn. They are so many things that will arise from this reckless decision and action that will follow our people for some time. And it doesn’t matter whether one banked with Finance Bank or not.
Already close to half a trillion of taxpayers money has to be deployed to meet the consequences of this reckless adventure. We say this because it is not possible for Finance Bank, which they have nationalised because of alleged liquidity problems, to be able to meet such unprecedented gigantic withdrawals. The money is coming from public coffers.
And even public coffers cannot meet such a huge requirement of cash without unhealthy fiscal policy compromises. Many social services will have be sacrificed. Soon there will be cholera everywhere because the government has no money to provide people with clean water and decent sanitation. There will be potholes everywhere which the government will fail to mend. The list of what the government will fail to do as a result of this reckless adventure is endless. And to this endless list we may have to add inflation.
We have no doubt that at some stage Rupiah’s government will resort to printing cash to finance their hatred for Rajan. The result of this is very simple to discern – inflation will rise and our poor people will be saddled with a subtle tax to finance Rupiah’s ego. We say this because the whole move against Finance Bank is being pursued to satisfy Rupiah’s desire to finish Rajan. But at what cost? Even in a war one has to measure the cost of trying to seek a total annihilation of an enemy. The cost may be too high to oneself and to the enemy to justify finishing him off. For this reason, when one has obtained a strategic advantage the war stops to save oneself unjustifiable costs.
If banking regulation was what was the issue in the Finance Bank debacle we do not see how the central bank could have chosen the methods that they have chosen. In many ways, their behaviour contains elements of reckless bravado, triumphantalism which does not seem to be benefiting them. We say this because with one single reckless act the central bank had totally erased the appearance of professionalism and competent handling of the financial sector which they carried. It does not make sense that they did this on their own.
It is very clear that this was foisted on them, their independence has been compromised and completely obliterated. This is also clear because by doing what they have done, Caleb Fundanga’s central bank has opened the market to open-ended system-wide risks that they cannot easily control. In other words, in attacking Rajan they have attacked all the banks in our country. And the weak banks, especially those whose ownership is predominantly Zambian, are going to feel the consequences of this recklessness for a very long time to come.
We should not forget that our financial sector is still very small and fragile. Ours is a very small economy. And the destruction of the banking sector during the Frederick Chiluba years when banks where collapsing like dominos has not been forgotten by our people. That period coincided with Chiluba’s reckless neo-liberal wanton destruction of the economy which left many of our people on the streets without jobs.
Some of those who lost jobs put the little they where paid in some of these banks which collapsed. And Rupiah was a shareholder and director in Africa Commercial Bank which went under with many Zambians, including this newspaper, losing their money. Against this background, how can Caleb agree to preside over the destruction of a nascent banking sector that has taken so much effort to nurse back to health.
They should have known that the measures they have taken on Finance Bank will lead to a run on the bank, would impair the bank’s capacity and bleed it to death. Was this their intention? Or can they tell us that what is happening to Finance Bank today was not foreseen or could have not been foreseen?
What then was so important which necessitated the clearly reckless measures which they have taken? What justifies Caleb’s deployment of the equivalent of a nuclear bomb on our financial sector? We say this because in financial terms what they have done is to destroy the fibre that constitutes the fabric of banking.
They have destroyed confidence in their ability to fairly regulate the banking sector without bowing to political pressure. And once confidence is lost in a market it takes many years to restore it if at all.
And in the meantime the economy is dragged down by a skittish banking sector which is too scared to do its work properly for fear of political reprisals. Every activity that they undertake has to be looked at through the extra spectacles of political correctness. The banks start behaving like bad newspapers, they engage in unhealthy self censorship.
Confidence is a foundation upon which a healthy banking sector is built. If you destroy confidence you make it very difficult for the banking sector to make meaningful contribution to the economy. And this is what Caleb, at the behest of his political masters has done to our country.
Surely, whatever problems Finance Bank had could have been resolved at a cheaper cost to the taxpayer than what the government is today pumping into it. When one thinks that this was just to fix Rajan then the price becomes even more obnoxious. Why risk the whole banking sector just to fix an individual? But this is consistent with the way Rupiah behaves and operates. It seems to him cost does not really matter.
What matters is his getting what he wants. To him, power is there to be used to crush his enemies, real or perceived. Rupiah doesn’t know that the exercise of power must be the constant practice of self-limitation and modesty.
Labels: BOZ, CALEB FUNDANGA, CORRUPTION, FINANCE BANK, RAJAN MAHTANI
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Govt scheme to grab finance bank exposed
By George Chellah
Thu 09 Dec. 2010, 04:01 CAT
PRESIDENT Rupiah Banda’s government is planning to nationalise Finance Bank Zambia Limited (FBZL) in a bid to cut off Dr Rajan Mahtani’s influence on the institution and make sure he gets nothing. But sources say the bank is currently doing very well and it would be madness for the authorities to take such an extreme move just to fix Dr Mahtani.
Sources at the Ministry of Finance and National Planning (MoFNP) have revealed that government through the Bank of Zambia (BoZ) is expected to move on the bank in an operation code named Project Water.
The sources, however, say that the move has attracted some opposition from experts within MoFNP and the Central Bank who strongly feel that there are better ways of dealing with Finance Bank than through nationalisation.
“It’s madness to nationalise a bank, which is doing fine just to punish Mahtani. Actually, the take-over process would have taken place earlier on, but finance minister Dr Situmbeko Musokotwane seems to have problems with the idea of using taxpayers money in such a manner. There is a lot of political maneuvering to make sure that Mahtani is brought down,” the sources said.
“And this is being planned from State House. A joint team including senior officials from State House, Ministry of Justice and Bank of Zambia has been pushing the agenda. This team has been frequenting South Africa to prepare for the nationalisation of Finance Bank. And people have been shifted around to make sure this project is implemented.”
The sources revealed that the operation was intended to make it look like a normal BoZ activity when in fact the architects of ‘Project Water’ were just politically motivated.
“The real issue is that State House suspects that Mahtani is financing the opposition through the bank and to cut off this life line, they need to remove him from the bank completely through this take over,” the source said.
The sources disclosed that the scheme is that BoZ would be used to try and make the nationalisation acceptable to the public.
“It is now abundantly clear that there were no issues or problems of any serious nature in the bank except for the politically motivated actions,” said the source.
The source added: “This is wrong for our country, how can someone be so reckless and start tampering with the banking industry for political reasons. It seems whatever political fears they have, have blinded them to the dangers of destroying the Zambian financial sector. We just privatised Zanaco, how can people now be thinking of nationalising a private bank?”
Labels: BOZ, CORRUPTION, FINANCE BANK, PROJECT WATER, RAJAN MAHTANI
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Saki testifies in Mahtani case
By Mwala Kalaluka
Thu 09 Dec. 2010, 04:01 CAT
A WITNESS told the court that he engaged in some untruths to access the letter allegedly authored by the central bank in which he was said to have misled the President over Finance Bank and Rajan Mahtani.
Sakwiba Sikota, a Lusaka lawyer, said this during proceedings on Tuesday in a case where another lawyer John Sangwa and his client former Finance Bank chairman Dr Mahtani are charged with forgery, uttering a false document and fabricating evidence.
In his testimony before Lusaka chief resident magistrate Charles Kafunda, Sikota said he heard about the purportedly forged letter from his client Odysseus Mandenakis, the director of Ody’s Works Limited.
Sikota said Mandenakis told him that Sangwa availed the letter purportedly authored by immediate past deputy governor Dr Denny Kalyalya to him.
Sikota, intrigued about what Mandenakis told him, asked the Ody's boss to set up a meeting with Sangwa.
“I told him that as bait perhaps he could state that in view of the letter, he was now willing to discuss a settlement,” Sikota said.
He said the meeting took place at Mandenakis’ residence on July 25, 2010.
Sikota said during the meeting, he asked Sangwa about the letter and the latter confirmed what Mandenakis said earlier.
Sikota said he then suggested to Sangwa that the letter in question was obviously fake since part of the contents stated that President Banda wanted to somehow acquire the shares in Finance Bank and Zambezi Portland.
“The other aspect was that which stated that I together with my clients misled the President over these issues,” Sikota said. “I pleaded with Mr Sangwa to look at these various aspects and concede that this was a forgery or a fake.”
Sikota said Sangwa remained adamant that he had done his investigations and he was confident the letter was genuine.
Sikota said he only got hold of the said forged letter dated July 12, 2010, about July 27.
During cross-examination by defence lawyer Mumba Kapumpa, Sikota said it was his understanding that the said letter showed that Dr Mahtani had been cleared of all the charges against him.
When asked why he had to set a trap that Mandenakis was willing to settle his disputes with Dr Mahtani in order to get the said letter from Sangwa, Sikota said he had to tell a lie to get to the truth by whatever means.
Asked further why the court should not classify his testimony as little untruths given the position, Sikota said he had now sworn on the Holy Bible to tell the truth.
Sikota said getting the letter from Sangwa required a bit of subtlety.
Labels: COURTS, FINANCE BANK, RAJAN MAHTANI, SAKWIBA SIKOTA
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COMMENT - They need to bring back The Post, immediately.
Ex-Finance bank bosses face arrests as Bank pursues Post newspaper for K36b debt
Monday, December 13, 2010, 8:34
Shareholders of Finance bank and former senior directors are likely to be arrested for raft of criminal offences, it has emerged. And the new Finance Bank team is set to recover a K36 billion overdraft by the Post newspaper.
Last week on Friday, The Bank of Zambia (BoZ ) took possession of operations of Finance Bank, saying the action was aimed at protecting the interests of depositors and other stakeholders.
BoZ has since appointed First Rand of South Africa to oversee the operations of the bank and specialists led by Leornard Hane as acting CEO on Saturday took over management of the Bank. There was jubilation from workers as the new team introduced itself at the head office.
The Watchdog has been informed that the immediate task of the new team is to recall outstanding loans, overdrafts and obligations to avoid impairments.
Insiders have disclosed that the Post Newspapers limited is one of the major debtors with an overdraft of K36 billion. The new team is said to be planning to move to recover this money immediately.
A report by Boz on Finance Bank inspection department exposed scandalous acts of fraud, theft and unsound banking practices by shareholders, directors and senior management.
Criminal charges are therefore to follow shareholders, former directors and senior management of the bank.
The charges will include theft, fraud and unsound banking practices and for breach of the the banking Act of Zambia.
Labels: CORRUPTION, FINANCE BANK, FIRST RAND GROUP, NATIONALISATION, RAJAN MAHTANI, THE POST
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More condemn Finance Bank takeover
Tuesday, December 14, 2010, 8:19
Opposition UPND president Hakainde Hichilema has said the takeover of Finance Bank Zambia Ltd by the Central Bank is bad news for investment in the country. Mr. Hichilema has since accused the government of orchestrating the move to bring down Finance Bank chairman Dr. Raja Mahtani because he was not in good books with the ruling party.
He said the possible nationalization of Finance Bank is a sign that any indigenous Zambian investor who has differences with government would risk having their business takeover by the powers that be. Mr. Hichilema told Radio Phoenix in Lusaka that local business operators in the country would now be operating in fear of their businesses being ceased seized.
“This is bad news for the country, and it is bad news for democracy because it means anyone who has a different opinion from the MMD they can take over your business, that is not how you run a country.
We are going back to the one-party state dictatorship. We are threatening democracy because people will not say what they think because if it’s different from the MMD, then you lose business. We are way into one-party state dictatorship where if you are a farmer and you differed with Kaunda, your farm is taken away from you,” said Hichilema.
And business consultant Bob Sichinga says government would have used a better alternative in handling the shareholding in Finance Bank. He said the move of nationalizing the bank would put the institution in an awkward position.
“It seems to me that this was an orchestrated move to put Finance Bank in an awkward move to ensure that the bank is in this situation. There are many people in the industry who do not like Mr. Mahtani’s style of doing business. But in terms of the actual actions against a bank, which is separate from Mr. Mahtani, I think that another process should have taken course. The whole process to me is a plan to sort out Finance Bank,” he said.
Meanwhile, Change Life Zambia Executive Director Fr Frank Bwalya has condemned government’s decision to take over Finance Bank.
Father Bwalya says the move by government showed how scared the ruling party was ahead of next year’s elections.
Speaking to Qfm in an interview, Fr. Bwalya said the takeover of the bank was a political scheme arising from the Drug Enforcement Commission’s investigation of PF leader Michael Sata on allegations of money laundering.
He said it was regrettable that government could not even give a satisfactory explanation to justify the takeover of Finance bank.
Fr Bwalya added that the takeover was political, it was clear that money laundering allegations against Mr Sata emanated from Finance Bank.
Labels: CORRUPTION, FINANCE BANK, FRANK BWALYA, HAKAINDE HICHILEMA, NATIONALISATION, PRIVATISATION, RAJAN MAHTANI, ROBERT SICHINGA
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