Boardroom battle erupts at MoneyMart Finance

A legal dispute has erupted over control of MoneyMart Finance, with shareholder Edward Galante approaching the High Court to challenge his removal from the company's board.

Galante, who also serves as a director at CBZ Holdings, was removed from the MoneyMart board earlier this year after allegedly failing to formally offer himself for re-election in line with provisions of the 2022 Subscription and Shareholders Agreement (SSA).

Founded in 2013 by entrepreneur Ethel Mupambwa, MoneyMart has grown into a key microfinance institution, focusing on supporting women and youth-led small businesses, particularly in underserved communities.

At the centre of the dispute is which shareholder agreement governs the company. Galante argues that the 2022 SSA became void after the collapse of a deal involving Eclectics International, which had been offered a 25 percent stake in exchange for delivering a digital banking system.

He contends that because Eclectics failed to meet conditions precedent — including obtaining exchange control approval from the Reserve Bank — the agreement is no longer valid. Instead, he maintains that the 2018 shareholders' agreement, under which he joined the company, should apply, thereby entitling him to reinstatement.

MoneyMart and its directors reject this argument, insisting that the 2022 agreement remains binding. They argue that regulatory hurdles became irrelevant after Eclectics established a local subsidiary, Eclectics Zimbabwe, to facilitate the transaction.

The company further notes that the agreement was ultimately terminated due to Eclectics' failure to deliver the digital banking system, but maintains that this does not invalidate the broader shareholder framework.

Court documents reveal that Galante had actively participated under the 2022 agreement for more than three years, including signing restructuring resolutions, accepting dividends, and nominating directors in accordance with its provisions.

"Parties have since 29 July 2022 conducted themselves in accordance with the 2022 agreement… Each party and board has consistently relied upon the 2022 SSA as the sole binding agreement," reads part of the High Court filing.

MoneyMart argues that Galante only began disputing the agreement after losing his board seat, adding that it would be inconsistent to reject a framework he had previously accepted and benefited from.

The dispute also draws attention to Galante's financial commitments to the company. After joining in 2018 as part of a funding arrangement linked to an award from the Africa Enterprise Challenge Fund, he reportedly pledged to match a US$350,000 facility but contributed less than US$80,000, citing economic challenges and the COVID-19 pandemic.

A subsequent repayment agreement saw MoneyMart settle the outstanding shareholder loan in full, paying over US$90,000.

Galante argues that his removal breached the company's Articles of Association and was effected without a proper board resolution. However, MoneyMart maintains that the decision was lawful and consistent with the governing 2022 agreement.

The High Court is now expected to determine which shareholder agreement holds legal authority — a ruling that could have significant implications for the governance and control of one of Zimbabwe's growing microfinance institutions.