ZB faces shareholder revolt

ZB Financial Holdings (ZBFH) is once again embroiled in a shareholder dispute, as long-simmering tensions with prominent investor Nicholas Vingirai flare up over allegations of flawed audit procedures and unfulfilled legacy agreements.

Vingirai, founder of Transnational Holdings and a key figure in Zimbabwe's banking sector through his historical ownership of Intermarket Holdings, has accused ZBFH of marginalising his interests during the company's recent virtual annual general meeting (AGM). His main grievance stems from the reappointment of Ernst & Young (EY) as external auditors - a move he claims was pushed through despite Transnational's objections.

At the centre of the dispute is EY's alleged failure to disclose a protracted shareholder dispute between Transnational and ZBFH, which Vingirai argues has significant financial ramifications. Transnational, a major shareholder in ZBFH, reportedly voted against EY's reappointment during the AGM, but Vingirai says their vote was ignored due to "muted microphones" during the online proceedings.

"We were in there as Transnational, to make sure people don't continue misleading the investing public," Vingirai said in an interview this week. "As a shareholder, I have a right to call for the register and minutes to see what they have done. I haven't done that yet. I own the business. So, I will follow the processes internally first. Depending on the outcome, certainly, if we have to, we will move that way because the court should be the final arbiter."

This latest conflict rekindles unresolved tensions from a 2016 settlement agreement intended to resolve a long-standing dispute stemming from the early 2000s seizure of Intermarket by the Reserve Bank of Zimbabwe. The government eventually ruled that Intermarket and its assets should be returned to Vingirai, leading to a negotiated share transfer involving ZBFH.

Vingirai insists Transnational was entitled to a 38.74% stake in ZBFH but accepted 34% in the interest of moving forward. That figure was later negotiated down to 33%, formalised during a meeting in Cape Town involving Vingirai, Finance Minister Mthuli Ncube, and then RBZ governor John Mangudya.

"I flew to Cape Town for that meeting after being called by the Minister of Finance, who was eager to resolve the Intermarket–ZB dispute for the sake of financial sector stability," Vingirai said. "Instructions were issued for the transfer of a 33% stake in ZBFH to Transnational, to be drawn from the government's 24% shareholding and the rest from Nssa."

The 2015 cabinet directive that followed the settlement also covered the return of two controversially acquired farms but made the 33% shareholding the centrepiece of restitution. Vingirai said initial proposals from the RBZ offered only 26%, which he rejected, eventually securing an agreement that included pre-emptive rights to acquire the remaining shares when Nssa exited ZBFH.

However, he says the government and ZBFH have failed to honour this arrangement, especially after learning that Nssa had sold its ZBFH shares elsewhere.

"We have struggled to get the balance of the shares… And before we knew it, we heard that Nssa had sold its ZBFH shares to somebody else. And I am like, but you can't do that," Vingirai said.

ZBFH's spokesperson previously told The Independent that Vingirai controls 23.35% of the company, based on the current share register. But Vingirai maintains that the full 33% shareholding, including associated rights and benefits, was effectively transferred to Transnational upon conclusion of the settlement.

"The agreement transferred both risk and profit to Transnational from the date of signing," he said.

As the legal and governance clouds gather, ZBFH's general counsel Tinashe Masiiwa had not responded to questions on the matter at the time of publication.

Vingirai has warned that, should internal mechanisms fail to bring resolution, he is prepared to pursue legal action to enforce what he describes as a binding and overdue agreement.