AFRASIA Bank Limited (ABL), the anchor shareholder in Kingdom Bank’s parent company, says it is in Zimbabwe for the long haul and will take steps to position its investment into one of the leaders in the sector.
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ABL has a 35% shareholding in AfrAsia Kingdom Bank Zimbabwe (AKBZ), which wholly owns Kingdom Bank.
The pledge comes at a time Kingdom is embroiled in a fight with Valley Technologies over a US$21 million debt, with accusations from Spiritage chief executive officer Zachary Wazara that the debt had been converted into equity and that the technology company was now owned by the bank.
Wazara also alleged that the debt to equity swap was also done to hoodwink the central bank by not portraying the correct financial position of the bank.
ABL chief executive officer, James Benoit, told Standardbusiness that the bank was not in need of any rescue and was “fully aware of all strategic and operating aspects of the bank including all credit and other risk controls”.
“We have full visibility into all areas of the bank. We have established a robust governance process with AKBZ and Kingdom. We have board seats as shareholders and have excellent independent directors on the board as well. We have also seconded several of our top executives to Zimbabwe to work on technical and operational matters,” Benoit said.
Benoit, ABL Head of Banking, Treasury and Markets Kamben Kamben Padayachy, Brian Fredrick and Vinod Dhondee sit on the AKBZ board. Dhondee is the deputy group chief executive officer of AKBZ. Benoit said while he could not comment on the Valley Technologies saga, the bank had not been caught offside.
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He said ABL were long-term investors in Zimbabwe, when asked whether there had been a return on its investment.
Last year, ABL injected US$9,5 million into the then Kingdom Financial Holdings Limited (KFHL) for a 35% equity, rescuing the institution that had struggled to meet the then US$12,5 million minimum equity capital required by the central bank. KFHL was rebranded into AKBZ to reflect the new shareholders.
Benoit said there were numerous options available for the bank to meet the US$50 million minimum equity capital deadline by June 30, as Zimbabwe and AKBZ are “increasingly seen as attractive opportunities to our existing shareholders and to new ones that would like to grow with us in that market and business”.
“We will use the higher capital base to take bold actions to position AKBZ into the top five banks in the country,” he said.
The Reserve Bank of Zimbabwe (RBZ) said it was aware of the problems at the bank and was in the process of mediating the dispute between Wazara and Kingdom Bank founder Nigel Chanakira. RBZ said it was also aware of the steps the bank was taking to address the performance aspects of all major facilities including Valley Technologies.
“In view of our on-site and off-site evaluations of the bank, and concrete corrective measures being taken by the bank, with our approval, and given the quality of the major shareholder (ABL) and their commitment to ensure stability of the bank, we are confident that the situation is under control for normal business to continue,” RBZ said.
