Controversy brews at First Capital Bank over prope...

Controversy brews at First Capital Bank over property disposals

Philemon Jambaya

Zim Now Editor

First Capital Bank a Zimbabwe Stock Exchange-listed company, is facing allegations of improperly disposing of key properties, raising concerns about corporate governance and shareholder rights. At the center of the controversy is FCB’s major shareholder, Mauritius-based FMB Capital Holdings plc, with accusations that the bank is pushing through property sales without following due process.

Investigations reveal that FCB’s shareholders, also listed on the Malawi Stock Exchange, are in the process of selling properties, including the 294-room Kingdom Hotel in Victoria Falls and Dolphin House in Harare, allegedly disenfranchising the trustees of co-owner Barclays Pension Fund in the process.

FCB’s Head of Marketing and Communication, Fadzai Nyoka, declined to comment on the specific allegations, citing company policy regarding listed entities. “As a listed entity bound by local, regional, and international legal and governance frameworks, we follow due procedure in everything we do,” Nyoka stated. “This includes operational transparency and treating contractual discussions with the utmost confidentiality. Given the above, we cannot comment on this matter at this stage. We remain committed to protecting value and guaranteeing confidentiality for all our stakeholders.”

The ownership structure of Kingdom Hotel adds complexity to the situation. The hotel, operated by Makasa Africa Sun, is jointly owned by Barclays Pension Fund and First Capital Bank, the sponsoring employer, on a 50-50 basis. This arrangement dates back to when Barclays plc sold its local unit to FCB in 2017.

Sources familiar with the unfolding deal allege that FCB is employing “divide-and-rule tactics” to bypass the trustees, who are supposed to be involved in decisions regarding the sale of the properties. “FCB is employing a divide-and-rule tactic to handle the trustees, who are supposed to be part of the deliberations required to reach a decision to sell the properties,” a source claimed. “However, I can tell you that the trustees are against the disposal and have been making excuses for not attending meetings over the past six months.” The source further asserted that FCB is proceeding without a quorum or consensus, a clear violation of corporate governance principles.

The source also revealed that some FCB shareholders and top management, including Chief Executive Tapera Mushoriwa, harbor doubts about the investment decision-making abilities of the pension fund trustees. This alleged skepticism has reportedly led to the trustees being sidelined and management unilaterally driving the deal.

This is not the first time FCB has been accused of sidelining trustees in major transactions. Similar tactics were reportedly used in the collapsed and controversial Africa Sun Limited lease agreement over Kingdom Hotel, raising questions about a pattern of behavior.