BancABC in US$6 million managerial dismissal scan...

BancABC in US$6 million managerial dismissal scandal

By Nyashadzashe Ndoro

Chief Reporter

BancABC Zimbabwe is facing explosive allegations of fabricating offenses to terminate senior managers' contracts in order to reportedly dodge retrenchment packages totaling over US$6 million.

Investigations reveal BancABC hired a prominent lawyer for US$235,000 to systematically dispute claims by nine dismissed managers with 102 years' combined service. The bank levelled 'unsubstantiated' charges, including failure to exercise due diligence, nepotism, and conflicts of interest to evade severance pay.

Those suspended include Head of Corporate Banking, Head of Treasury, Head of Human Capital, Head of Marketing, Head of Digital Transformation and Head of Operations. The Head of Finance was also forced to resign.

Insiders insist that allegations were unfounded and designed to circumvent financial obligations. Contradicting claims of financial hardship, BancABC reported a staggering 641% profit increase to ZWL$118.6 billion for the first half of 2023.

Regional operations in Zambia, Botswana, Mozambique, and Tanzania provided severance packages, fueling outrage among Zimbabwean employees.

"The recent managerial dismissals (at BancABC) have severe implications for the country's financial sector. Allegations against nine senior managers with 102 years of combined experience were fabricated, and the bank's reluctance to disclose details exacerbates concerns.

"I have seen firsthand the distress of affected employees, highlighting the need for transparency and accountability.

"This bank must urgently address suspicions of corporate deceit by clarifying dismissal procedures. Affected employees should consider legal action against the institution to set a precedent for accountability," a source connected to the development stated.

Zimbabwe Banks and Allied Workers Union (ZIBAWU) told Zim Now that it was concerned by the situation at BancABC.

"We don't know what has gone wrong with that bank," ZBAWU secretary general Peter Mutasa said.

"It appears a lot is happening. We have defended our members who were affected and also aided some managerial employees. We are gravely concerned about what appears to be retrenchments disguised as disciplinary hearings. We have challenged the bank to make the forensic audit report public so that we all can evaluate some of these allegations."

Shareholders, Old Mutual, Botswana Insurance Fund and International Finance Corporation are reportedly scrutinising the matter.

Dismissed managers received suspension notices without explanation, sparking procedural fairness concerns. Replacement executives reportedly receive significantly lower remuneration.

Experts question BancABC's motives, citing "kangaroo courts" with predetermined outcomes. "The instruction is to eliminate costly managers ahead of restructuring," an insider revealed. Regulators, stakeholders and employees demand transparency, accountability and fairness.

BancABC's reported financial performance, driven by currency revaluation gains, foreign currency-based income, digital income and fair value gains on investment properties, contradicts claims of inability to pay retrenchment packages.

Asked to comment on the issue, BancABC Managing Director (MD) Tawanda Munaiwa was evasive, shockingly asked publication to put questions on letterhead and submit to the bank, something that is unusual.

"Kindly put the questions on letter with a letterhead and send to the bank," he said.

BancABC recorded an inflation adjusted profit after tax of ZWL118,6 billion for the period ended June 30, 2023, up 641 percent from ZWL16 billion for the period ended June 30, 2022. The results were prepared in ZWL for easy comparison on a year-to-year basis, although the new currency Zimbabwe Gold (ZiG) was introduced on 8 April.

The positive performance was driven by growth in total income, which rose to ZWL234,5 billion during the reporting period from ZWL56,9 billion reported in June 2022. But the bank is seemingly indicating that the funds are not enough to meet the exit packages as they will leave the bank in an unsound financial position, hence the “unfair dismissals” of the managers.

ABC Holdings, the parent company of BancABC, was bought by Atlas Mara. Atlas Mara was founded by ex-Barclays Plc chief executive Bob Diamond and billionaire Ashish Thakkar.

The current MD, Munaiwa, is allegedly the one pushing for the restructuring exercise since he took the position from Lance Mambondiani in September this year.

Munaiwa is formerly MD of BancABC Mozambique where ironically he was paid his full amount after the bank was sold

Mambondiani was, in October, this year, sent on forced leave pending investigations into alleged malpractices.

The prominent banker, who joined BancABC in 2019, had disagreements with the board over governance issues and alleged fraudulent practices.

This was not Mambondiani's first unceremonious departure; he was ousted from Steward Bank in 2019 over alleged foreign currency misuse.