Minister reprimands First Mutual Life for breaking...

Minister reprimands First Mutual Life for breaking the law

Nyashadzashe Ndoro

Finance Minister Mthuli Ncube has instructed First Mutual Life Assurance to attend to corrective measures after the listed company submitted an unsatisfactory report during an assets separation exercise to the Insurance and Pensions Commission.

On April 5, 2022, FML stakeholders were advised that IPEC intended to perform a forensic investigation on First Mutual Life Assurance Company, a subsidiary of First Mutual Holdings Limited, arising from the asset separation exercise initiated by IPEC.

The audit was completed, and the report was submitted to the line Minister for consideration. Ncube then advised IPEC to institute corrective measures.

“The investigation was completed in February 2023 and the report was submitted to the Minister of Finance, Economic Development and Investment Promotion in accordance with section 67 of the Insurance Act [Chapter 24:07] (‘the Act’). In line with the Act, FML submitted representations on the contents of the report to the Minister on 8 June 2023,” FML said in a cautionary statement to its shareholders.

“On 21 December, 2023, FML received a response from IPEC indicating that the Commission was mandated by the Minister to institute corrective measures. The corrective order issued by IPEC is receiving due attention from the FML board and management.

“As these developments may have a material effect on the price of the Company's securities, shareholders are advised to exercise caution when dealing in the company's securities pending a full assessment of the implications of the corrective order.”

First Mutual Life is a subsidiary of First Mutual Holdings Limited, whose 36.35% shareholding stake was acquired by CBZ Holdings.

CBZHL is in the process of valuating a fair and reasonable price on the mandatory offer to minority shareholders in FMHL.