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ZB major shareholder blocks Ernst & Young appointment
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ZB Financial Holdings' (ZBFH) attempt to re-appoint Ernst & Young (EY) as its external auditors for the 2025 financial year stalled last week after major shareholder Transnational Holdings objected to the move, reigniting a long-standing dispute within the financial institution.
The clash unfolded at ZBFH's Annual General Meeting (AGM) for the year ended December 31, 2024, where Transnational's executive chairperson, veteran banker Nicholas Vingirai, strongly opposed the reappointment of EY. He accused the auditing firm of failing to disclose in ZBFH's annual report a critical unresolved dispute related to the bank's controversial 2007 acquisition of Intermarket Banking and Insurance Group, a transaction Transnational has challenged for years.
EY, which has audited ZBFH for the past two years, had been proposed for a fresh term, subject to shareholder approval. However, Vingirai, representing Transnational Holdings, alleged that EY failed in its fiduciary duty to alert the investing public to the unresolved shareholding conflict stemming from the Intermarket takeover - a dispute that continues to cloud ZBFH's ownership structure and governance.
"ZBFH is a listed entity; as such, we owe it to the investing public to inform them of issues of such material nature," Vingirai told the Zimbabwe Independent. "This is a material disclosure that the auditors must insist on. I was shocked to hear this from the auditors. I cannot believe it."
Transnational still holds a 15.61% stake in its original Intermarket Holdings Ltd and 33% in ZBFH. Vingirai warned that failure to honour the 2016 government-brokered settlement on the Intermarket dispute could lead to a full de-merger of the group. He stressed that the potential impact of this scenario on investor decisions made it imperative for EY to have flagged the issue in the annual report.
However, EY defended its position during the AGM, arguing that the dispute was not of a financial nature and therefore did not warrant disclosure in the financial statements. Despite this explanation, Transnational refused to support the audit firm's reappointment.
ZBFH officials declined to comment on the matter when approached by The Independent. Nevertheless, board chairperson Agnes Makamure reportedly assured Vingirai and other stakeholders that management was committed to resolving the dispute and requested more time to address the issues raised.
EY managing partner Nqaba Mkwananzi reiterated the firm's adherence to audit quality and public interest but declined to discuss internal affairs of its clients.
"We take our role of serving public interest seriously in delivering high-quality audits. We do not comment on our clients' internal matters. At this stage, any questions should be directed to ZB Financial Holdings Limited directly," Mkwananzi said.
The fallout over the auditor reappointment adds another layer of complexity to ZBFH's governance challenges and highlights lingering tensions over unresolved legacy issues more than 15 years after the Intermarket acquisition.
The clash unfolded at ZBFH's Annual General Meeting (AGM) for the year ended December 31, 2024, where Transnational's executive chairperson, veteran banker Nicholas Vingirai, strongly opposed the reappointment of EY. He accused the auditing firm of failing to disclose in ZBFH's annual report a critical unresolved dispute related to the bank's controversial 2007 acquisition of Intermarket Banking and Insurance Group, a transaction Transnational has challenged for years.
EY, which has audited ZBFH for the past two years, had been proposed for a fresh term, subject to shareholder approval. However, Vingirai, representing Transnational Holdings, alleged that EY failed in its fiduciary duty to alert the investing public to the unresolved shareholding conflict stemming from the Intermarket takeover - a dispute that continues to cloud ZBFH's ownership structure and governance.
"ZBFH is a listed entity; as such, we owe it to the investing public to inform them of issues of such material nature," Vingirai told the Zimbabwe Independent. "This is a material disclosure that the auditors must insist on. I was shocked to hear this from the auditors. I cannot believe it."
Transnational still holds a 15.61% stake in its original Intermarket Holdings Ltd and 33% in ZBFH. Vingirai warned that failure to honour the 2016 government-brokered settlement on the Intermarket dispute could lead to a full de-merger of the group. He stressed that the potential impact of this scenario on investor decisions made it imperative for EY to have flagged the issue in the annual report.
However, EY defended its position during the AGM, arguing that the dispute was not of a financial nature and therefore did not warrant disclosure in the financial statements. Despite this explanation, Transnational refused to support the audit firm's reappointment.
ZBFH officials declined to comment on the matter when approached by The Independent. Nevertheless, board chairperson Agnes Makamure reportedly assured Vingirai and other stakeholders that management was committed to resolving the dispute and requested more time to address the issues raised.
EY managing partner Nqaba Mkwananzi reiterated the firm's adherence to audit quality and public interest but declined to discuss internal affairs of its clients.
"We take our role of serving public interest seriously in delivering high-quality audits. We do not comment on our clients' internal matters. At this stage, any questions should be directed to ZB Financial Holdings Limited directly," Mkwananzi said.
The fallout over the auditor reappointment adds another layer of complexity to ZBFH's governance challenges and highlights lingering tensions over unresolved legacy issues more than 15 years after the Intermarket acquisition.
Source - The Independent
