First Merchant Bank Limited (FMB), which is listed on Malawi Stock Exchange (MSE), will pay billions of Kwacha to 14 employees it illegally fired in 2012 after the Malawi Supreme Court of Appeal on Friday upheld decisions by two lower courts.
The Industrial Relations Court (IRC) first determined that the bank erred in retrenching the employees without notice and ordered some compensation.
FMB through its director and corporate lawyer Modecai Msisha appealed at the High Court in Lilongwe against the judgement but Justice Fiona Mwale upheld IRC’s verdict and the bank appealed again.
A three-member judge panel of Frank Kapanda, Anaclet Chipeta and Lovemore Chikopa still upbheld the loer court’s decision and made a determination that bank should pay compensations to the fired employees.
The bank fired 19 employees without notice, but only 14 dragged the bank to court.
One axed employee, who was among those that sued, reportedly died in the process of the protracted court battle.
FMB is one of the commercial banks doing well in the country and making billions of Kwacha profits.
In 2012, FMB reported K3.4 billion profit, a 70 percent jump compared to the previous year, but five percentage points shy of its projection.
In the year, the bank reported a 96 percent growth in non-interest income to K4.7 percent from K2.4 billion while its net interest income grew by less than one percent to K4.3 billion. And in the period ending June 2013, FMB reported an after-tax profit of K3.5 billion which the bank said was in line with its projections.
The bank’s assets in the period ending June 2013 jumped by about 18.5 percent to K58.9 billion which included K4 billion in connection with the acquisition of the operations of the International Commercial Bank (ICB) in Malawi, Mozambique and Zambia.
FMB announced the acquisition of ICB Malawi, Mozambique and Zambia, extending its commercial presence beyond Malawi and Botswana where it already exists.
The bank acquired 100 percent shares in ICB Malawi, 70 percent of ICB Mozambique and 62 percent of shares in ICB Zambia all of which are licensed commercial banks in their respective countries.
FMB managing director Dheeraj Dikshit saidthe acquisition said the development will strengthen the bank’s position in Malawi and enable the group to expand its regional footprint, and gain entry into the fast growing economies of Zambia and Mozambique, the paper reported.Follow and Subscribe Nyasa TV :