Controversy dogs Barclays deal

HARARE – The sale of Barclays Bank Zimbabwe (BBZ) continues to be dogged by controversy amid revelations that the deal was consummated through a share-swap and in which Barclays plc would get a stake in Mauritius’ FMB Capital Holdings.

This also comes as opposition to the Malawian entity’s 42 percent acquisition of the listed lender from interest groups such as the Affirmation Action Group and workers persists, and the parties have issued further cautionaries to say they were pursuing various approvals following an agreement early June.

“While the transaction was cast as a cash sale, we understand that the final settlement involved a share swap between Barclays and FMB’s Mauritian parent,” sources said, adding the “tragedy was that Zimbabwe would not benefit anything from the disposal”.

“To add salt to injury, the guys won the Reserve Bank of Zimbabwe and government’s approval to buy into BBZ after misleading authorities that they still had the Commonwealth Development Corporation’s support when the latter had long pulled out of the deal due to some misgivings about their erstwhile partner’s alleged corporate governance issues. One wonders, therefore, if someone high up there didn’t throw their lot with the Indians,” they said.

While a central bank official has emphatically stated that they “had no business in interfering with a private sale”, a Barclays plc spokesperson also told businessdaily from London on Thursday that they “had no comment”.

Earlier, another executive from the British financial group had dismissed the share swap allegations as mere speculation, saying “whilst it is always tempting (to comment), no doubt you will be aware we won’t do that”.

As FMB principals were not readily available for comment on this and other issues, concerns abound regarding how the Zimbabwean regulator(s) okayed the Blantyre buyer’s proposal and especially amid claims that several local bidders were overlooked on the grounds that “no one was able to cough up the cash” for the lucrative stake.

With other bidders to BBZ’s 67 percent equity including a National Social Security Authority/DBF Capital Partners consortium and management investment vehicle fronted by Msasa Capital, investors like Doug Munatsi’s group were reportedly able to write their own cheque – when given an opportunity – and the Malawian bank’s bid was far less superior than others anyway.

Even though, Hitesh Anadkat’s bank has sought to emphasise that it has only acquired a 42 percent stake, with 15 percent going to a worker’s life trust and 10 remaining in the hands of the Barclays plc, the southern African lender has an effective 70 percent control of the iconic Zimbabwean financial institution.

Only 32 percent of the shares remain available or are traded on the Zimbabwe Stock Exchange.

And under its new corporate thrust, FMB is seeking to delist from the Malawi Stock Exchange and float on the Mauritian bourse.

While Anadkat has recently said that they were moving to the Indian Ocean island to grow their capital capital base, this has added to the lack-of-capacity and share-swap debate or fires.

“Capital availability is an issue in Malawi. One thing for sure is that as we grow, we will need to raise capital and raising capital is not easy in Malawi because there is not enough money available in Malawi but if we set up in Mauritius, we know it will be much easier to raise capital,” he said last month.

“We are making Mauritius our legal head office and what this means is that current shareholders will get a share… in FMBCH. They will trade and buy shares as they were previously doing,” Anadkat said.