Zimbabwe’s Kingdom Financial Holdings Limited (KFHL) is disposing off its 38,15 per cent stake in FDH Financial Holdings of Malawi (FDH) after Reserve Bank of Malawi (RBM) certified KFHL unfit and to hold shares in the local group and banking institution.
This is contained in documents detailing arbitration proceedings between Old Mutual Life Assurance and the Thompson Frank Mpinganjira Trust who are the first and second applicants while KFHL are cited as the respondents.
KFHL was FDH’s majority shareholder and others are Thompson Frank Mpinganjira Trust with 37,85 per cent, Old Mutual Life Assurance Company (Malawi) 19 per cent and FDH ESOP 5 per cent.
FDH Financial Holdings has four subsidiary companies, FDH Bank, First Discount House Limited, FDH Stock Brokers and FDH Money Bureau Limited.
In a letter to FDH Financial Holdings, the RBM said in its fact-finding mission to Harare it noted KFHL was going through financial problems.
On April 26 2011 the Malawi central bank wrote to KFHL directing the group to exit FDH Financial holdings with immediate effect.
RBM said its decision was based on the assessment that KFHL was under capitalised and as such could no longer remain a shareholder in a prudently regulated financial institution in Malawi.
“Please note that as a consequence of our direction on this matter, all individuals representing KFHL on FDH Financial Holdings board and on the boards of other subsidiaries cease to serve as a directors with immediate effect,” reads part of the RBM document.
KFHL corporate communications and public relations executive Sekai Chitemerere confirmed the development.
“In consultation with the Reserve Bank of Malawi, Kingdom Financial Holdings Limited has agreed to dispose of its investment in Malawi. This is in line with the groups strategy of constantly reviewing its regional expansion and with the macro-economic challenges currently prevailing in Malawi, KFHL believes that its capital can be better deployed elsewhere,” Chitemerere said, according to NewsDay.
RBM says in the course of carrying out its supervisory functions over financial institutions in 2010, it came across some information, which led it to believe Kingdom was not in a good financial position.Follow and Subscribe Nyasa TV :