CBZ boss Nyemudzo fired?

CBZ boss Nyemudzo fired?
Zimbabwe's largest financial services group, CBZ Holdings (CBZ), has severed ties with its chief executive officer, Never Nyemudzo.

The veteran banker - who has since been replaced by Peter Zimunya on an acting capacity - was on Wednesday sent on forced leave pending his "resignation" by end of year.

However, sources within the banking industry yesterday said Nyemudzo was pushed out of the diversified financial group for failing to reign in massive insider loans, among other allegations against him.

In a note yesterday, research firm, Econometer Global Capital, said "fraud allegations and other cases, including insider loans, are among the issues haunting...Nyemudzo".

"It might be early to get full details concerning his departure, but it's clear he has been pushed out," said sources familiar with operations at the country's largest local financier.

Efforts to get Nyemudzo's comment were unsuccessful as his mobile phone was unreachable.

According to financials for the half year to June 2017, CBZ - which boasts of a $1, 2 billion-plus asset base - disbursed $57 million in loans to staff out of a total $385 million, translating to 5,2 percent of the group's total loan book.

Curiously, Nyemudzo's shock departure comes hardly seven months after the resignation of the group's non-executive chairman Elliot Mugamu.

Mugamu resigned in March this year after the National Social Security Authority (Nssa) had besieged CBZ executives demanding to know their remuneration packages and more financial disclosures against the backdrop of paltry dividends remitted to shareholders.

Government, a significant shareholder in CBZ, reportedly weighed in demanding improved board oversight and accountability and proposed to put a cap on quarterly board fees and sitting allowances for directors, which government considered hefty and unsustainable.

Government also demanded that the bank's "fat cat" executive salaries and "extortionate" perks were not above board and needed to be reviewed downwards given the prevailing economic environment in Zimbabwe.

Mugamu was believed to have received hefty board fees to the tune of $40 000, perks as much as $18 900 including medical aid, security guards, fuel, Internet, newspaper subscriptions and DStv subscriptions and motor vehicle expense allowances in 2016.

Nssa, which has 70 percent of its investments in the equities market, has interests in over 50 companies listed on the ZSE, holding at least 10 percent shareholding in 12 counters, also called for a forensic audit into some CBZ subsidiaries.

Since then, CBZ has issued six cautionaries advising shareholders that "the regulatory matter, which one of the company's subsidiaries is involved in, is still under discussion and may, on finalisation have an impact on the value of the company's shares".

The recent cautionary was published on Friday, three days before Nyemudzo was pushed out.

In a statement, CBZ's group legal corporate secretary, Rumbidzayi Jakanani, said: "Never created immense value as he continued with the growth of the Company to its current position of being the leading financial institution in Zimbabwe. The board, management and staff extend their appreciation to Never for his commitment and dedication during his tenure as group chief executive officer and wish him well as he embarks on new interests after an illustrious career within the group".

CBZ registered an $11,95 million profit of in the half year to June 2017, marginally up previous comparable period's $11,92 million.

Analysts, were however, quick to point out some discrepancies in the group's otherwise stellar financial results.

"The results make for interesting reading though. On the one hand, total income and earnings per share both increased but the taxation charge was low because of high deferred tax income. If the current tax charge had been deducted, the profit after tax would have been much lower, obviously," equities analyst, Leonard Sengere, said.