Nssa suspends Kanyekanye

HARARE - Controversial businessman Joseph Kanyekanye has been suspended as a director and chairman of Capital Bank Corporation (Capital) amid allegations of gross irregularities, corporate governance malpractices, and interference in management processes.

His suspension follows a directive a fortnight ago from the National Social Security Authority (Nssa), Capital’s parent organisation, that he be placed on immediate “leave of absence” pending the thorough investigation of all the allegations against him by the bank’s board.

The charges against the Allied Timber Holdings boss were first brought to light by trade union federation the Zimbabwe Congress of Trade Unions (ZCTU) and its affiliate, the Zimbabwe Banking and Allied Workers Union (Zibawu).

Internal audit reports, commissioned by Capital’s risk and compliance board committee — and which have since been presented to the bank’s board — appeared to give credence to the claims.

As a result, the Capital board has now invited external auditors to come in and scrutinise the matter further before substantive decisions on a number of issues are taken.

Among the damaging allegations that Kanyekanye is facing are claims that he overrode Capital management’s search for a new corporate affairs manager mid last year, resulting in him suspiciously and irregularly giving instructions that the job be given to Tambudzai Zindi, whose name was thrown into the recruitment process late — and even then, was deemed unsuitable for the role by the interviewing panel.

All this notwithstanding, Zindi was still parachuted into the position.

Zindi had apparently worked with Kanyekanye before at the Confederation of Zimbabwe Industries (CZI) — where she was in the public relations department and he was the president of the business lobby group until last year.

Quizzed by Capital’s internal auditors, Kanyekanye surprisingly admitted that management had deemed Zindi unsuitable for the position and that his wife knew Zindi, and she had in fact once taught Zindi at school.

Another serious allegation is that a company called Luxxotica Fashions, whose principals include Kanyekanye’s wife, irregularly benefitted from a bank tender to supply uniforms to the financial institution’s non-managerial female staff.

Zindi allegedly played a starring role in this problematic, related party transaction as well — and Kanyekanye himself did not declare this interest to either the board or relevant board committees.  

The matter only came to light when the ZCTU started to ask questions about the botched procurement process.

James Matiza, the Nssa general manager, could not be reached for comment yesterday to shed light on what would happen next if the external audit confirmed what the internal audit had uncovered. Zindi, the bank’s spokeswoman, was said to be off on sick leave.

But a Capital board member, who declined to be identified as he had no authority to speak on behalf of the bank, described Kanyekanye’s conduct as “discomforting”, particularly given that he was a non-executive chairman.

“He acts as if he is an executive chairman, if not the owner of the bank and this should not happen.
“It reflects very badly on all of us on the board. It has also not helped that his (Kanyekanye’s) suspension has rather curiously coincided with the leaking to the media of wild and very poorly contrived allegations against the bank and its staff,” he said.

Among the allegations that have been anonymously leaked to a number of media outlets is the claim that Capital has irregularly awarded its senior staff salary increases of more than 1 000 percent, at a time that the bank is allegedly failing to pay its depositors.

“I dismiss with contempt these false allegations of irregular salary increases and all these other crazy claims. Honestly, what is the intention here? Like other banks in Zimbabwe, Capital Bank is having to deal with the liquidity challenges that confront our economy. But the situation at the bank is no more severe or unique than that prevailing at other financial institutions, even with all the legacy issues that we inherited.

“With regards to our capitalisation position, surely it is public knowledge that we, together with many other local banks, are working towards meeting the requirements of regulatory authorities. But again, to claim any more issues beyond this is to lie without shame,” the board member said.

Two years ago, Kanyekanye stunned the business community when, in his then capacity of CZI president, he controversially joined Zanu PF’s “anti-sanctions” bandwagon — in what some analysts described as a desperate attempt to find favour with some bigwigs in the former ruling party.

Last year, Kanyekanye was also controversially deployed at Harare’s Town House by Local Government, Rural and Urban Development minister Ignatius Chombo, hardly a month after his exit from his position at the CZI.

The appointment, as a special interest councillor, to replace Charles Nyachowe, raised a lot of eyebrows given Chombo’s well-documented clashes with councillors and mayors throughout the country.

In January this year, the Rainbow Tourism Group chairman was also linked to an alleged “witch-hunt” at the hospitality concern following the exposure of a tender scam.

Meanwhile, the Allied Timber Holdings (Altim) boss, who is facing unlawful entry charges together with the company’s loss control manager Killian Mandisodza, was back in court in Mutare last week, as three witnesses testified against him.

Through a memorandum, Kanyekanye is alleged to have instructed Mandisodza in June last year to use force to break into the house of a complainant in an eviction case against ex-Altim Saligna managing director Kingstone Chikumbu.

 In the case, property valued at $57 118 was reportedly stolen, although the Altim boss and Mandisodza have vehemently denied all the charges.

Three witnesses, Chikumbu’s two children and maid, Estery Chakanyuka, testified against Kanyekanye — with the two minors testifying in camera.

The case continues on April 29 when the State will call its last witness Christabel Chikumbu, sister to the complainant.

In a related matter, Altim has lost a Labour Court (LC) appeal against an arbitrator who had ruled in favour of Chikumbu’s dismissal as a senior executive of the company.

Chikumbu, who was the acting Altim Saligna MD before his dismissal, was awarded benefits by an arbitrator Aaron Chemvura on February 25, 2011 after he complained that he was illegally dismissed.

 Chemvura went on to order Altim to reinstate Chikumbu, failing which the company had to pay a substantial severance package, but the company disagreed with the ruling and went to the LC for relief.

In the March 28 judgment, LC president Lillian Kudya upheld Chemvura’s decision and dismissed Altim’s appeal in its entirety, with costs — saying it was wholly without merit.

Kudya also unflatteringly upheld Chemvura’s conclusion that internal remedies to try and solve Altim’s labour dispute with Chikumbu had been frustrated by Kanyekanye. - Staff Writer

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