News / Local
RBZ boss appointment challenged in court
07 Apr 2024 at 05:33hrs | Views
PRESIDENT Emmerson Mnangagwa's appointment of veteran bank John Mushayavanhu as the new Reserve Bank of Zimbabwe (RBZ) governor has been challenged by two university students, who allege that it contravenes the law.
Mnangagwa was forced to retire former RBZ governor John Mangudya a month before he finished his term after the local currency suffered a sharp fall.
Mushayavanhu on Friday introduced a new currency as part of his basket of measures to stem raging economic chaos reminiscent of 2008.
Mangudya's term was due to end on April 30 before he takes over as Mutapa Investment Fund's chief executive officer on May 1.
The two University of Zimbabwe students Nesbert Munyuki and Valentine Ziki, who are represented by Zimbabwe Lawyers for Human Rights (ZLHR) lawyer Kossam ncube on Friday wrote to Mnangagwa demanding that he reverses Mushayavanhu's appointment within five days or face legal action.
The duo said Mushayavanhu was conflicted as a shareholder of FBC Holdings and not eligible to occupy the post of governor.
"We confirm that following mandatory disclosure by Dr Mushayavanhu himself, the Zimbabwe Stock Exchange, issued a public notice dated 8 of June 2020 advising the public of his acquisition of shares in FBC Holdings," they said in their letter of demand.
"The aforesaid notice advised the public that through a company called Tirent Investments (Pvt) Limited, on the 4th of June 2020, he purchased 1 925 000 shares in FBC Holdings to the value of ZW$4 427 500 raising his shares in the company to 42 325 00."
They added: "Furthermore, public information available at the Zimbabwe Stock Exchange confirms that indeed, Tirent Investments, the vehicle through which he has been purchasing shares in FBC Holdings, holds about 7% shareholding in the listed company.
"It is trite and indeed easily ascertainable through the Zimbabwe Stock Exchange that FBC Holdings limited wholly owns FBC Bank."
the students said Mushayavanhu, through his investment vehicle Tirent Investments, is shareholder in a company that wholly owns a registered and trading banking institution.
"Mushayavanhu, as the governor of the RBZ is the head of the body that regulates and has total oversight of the functions of banking institutions," they wrote.
"This entails the imposition of penalties for errant behaviour on the part of banks and even suspension or revocation of their trading licences should the need arise.
"This brings to the fore the question of his objectivity in carrying out his regulatory functions in relation to FBc Bank.
"How is he to regulate and supervise a bank in which he has a vested and well documented financial interest?
"It goes without saying Your Excellency, that he is evidently conflicted and compromised."
The students said it is for that reason that the RBZ Act (chapter 22:15) was promulgated.
The Act provides guidelines on the appointment of RBZ governor.
"Whilst we appreciate that at law you are reposed with the prerogative of appointing the RBZ governor, nevertheless your discretion in that regard is not absolute as it is fettered by statute," the letter reads.
"Section 14 of the RBZ Act provides that your power to appoint the Governor is subject to section 16."
The students said they will approach the courts for recourse.
Mnangagwa was forced to retire former RBZ governor John Mangudya a month before he finished his term after the local currency suffered a sharp fall.
Mushayavanhu on Friday introduced a new currency as part of his basket of measures to stem raging economic chaos reminiscent of 2008.
Mangudya's term was due to end on April 30 before he takes over as Mutapa Investment Fund's chief executive officer on May 1.
The two University of Zimbabwe students Nesbert Munyuki and Valentine Ziki, who are represented by Zimbabwe Lawyers for Human Rights (ZLHR) lawyer Kossam ncube on Friday wrote to Mnangagwa demanding that he reverses Mushayavanhu's appointment within five days or face legal action.
The duo said Mushayavanhu was conflicted as a shareholder of FBC Holdings and not eligible to occupy the post of governor.
"We confirm that following mandatory disclosure by Dr Mushayavanhu himself, the Zimbabwe Stock Exchange, issued a public notice dated 8 of June 2020 advising the public of his acquisition of shares in FBC Holdings," they said in their letter of demand.
"The aforesaid notice advised the public that through a company called Tirent Investments (Pvt) Limited, on the 4th of June 2020, he purchased 1 925 000 shares in FBC Holdings to the value of ZW$4 427 500 raising his shares in the company to 42 325 00."
They added: "Furthermore, public information available at the Zimbabwe Stock Exchange confirms that indeed, Tirent Investments, the vehicle through which he has been purchasing shares in FBC Holdings, holds about 7% shareholding in the listed company.
"It is trite and indeed easily ascertainable through the Zimbabwe Stock Exchange that FBC Holdings limited wholly owns FBC Bank."
the students said Mushayavanhu, through his investment vehicle Tirent Investments, is shareholder in a company that wholly owns a registered and trading banking institution.
"Mushayavanhu, as the governor of the RBZ is the head of the body that regulates and has total oversight of the functions of banking institutions," they wrote.
"This entails the imposition of penalties for errant behaviour on the part of banks and even suspension or revocation of their trading licences should the need arise.
"This brings to the fore the question of his objectivity in carrying out his regulatory functions in relation to FBc Bank.
"How is he to regulate and supervise a bank in which he has a vested and well documented financial interest?
"It goes without saying Your Excellency, that he is evidently conflicted and compromised."
The students said it is for that reason that the RBZ Act (chapter 22:15) was promulgated.
The Act provides guidelines on the appointment of RBZ governor.
"Whilst we appreciate that at law you are reposed with the prerogative of appointing the RBZ governor, nevertheless your discretion in that regard is not absolute as it is fettered by statute," the letter reads.
"Section 14 of the RBZ Act provides that your power to appoint the Governor is subject to section 16."
The students said they will approach the courts for recourse.
Source - The Standard
