Zambia court blocks sale of stake in state bank

LUSAKA – A Lusaka high court on Tuesday blocked the sale of a 49 per cent stake in state bank Zanaco to Rabobank of the Netherlands after a Zambian legislator appealed the award of the bid to the Dutch bank.

The high court granted Bwalya Chiti an order blocking the Zambia Privatisations Agency (ZPA) from finalising negotiations with Rabobank, after Chiti said it had breached the law by throwing out a separate bid by a consortium of Zambian and foreign investors. Zanaco has a 24 per cent share of Zambia’s retail market, with assets of US$314 million, deposits of US$285,8 million and 52 branches and agencies.A court order obtained by Reuters showed that Chiti had blocked the sale of the 49 per cent Zanaco stake because the ZPA rejected a bid by the Africa International Finance Holdings (AIFH), which Chiti had submitted on behalf of AIFH.AIFH comprises the European Investment Bank, First Rand bank Holdings, International Finance Corporation, Netherlands Development Finance Company and some Zambian individuals.”It is hereby ordered that the defendant (ZPA) by itself and its servants or agents …are hereby restrained from opening negotiations or proceeding to execute any sale or similar agreement for the sale of 49 per cent shares in (Zanaco) until determination of this matter,” the court order said.Chiti said in his court documents that the ZPA had thrown out the AIFH bid on grounds of his involvement.Under Zambian law, a politician seeking to purchase shares in a public firm is supposed to declare his interest publicly.But Chiti said he only acted as an agent for AIFH and that he had no interest or shares in AIFH.Chiti wants the court to give a proper interpretation of the law concerning his involvement before the 49 per cent shares can be disposed of.A senior ZPA official said the agency had received the court order.”There has been some controversy since Rabobank was picked and we thought it would come to this,” the official told Reuters.In October, the ZPA picked Rabo Financial Institutions Development BV, a wholly owned subsidiary of Rabobank as the preferred bidder for the 49 per cent Zanaco shares.The ZPA re-advertised the bidding for Zanaco’s 49 per cent shares in April after negotiations with South Africa’s largest retail bank Absa collapsed.No date has been set for the hearing.-Nampa-ReutersZanaco has a 24 per cent share of Zambia’s retail market, with assets of US$314 million, deposits of US$285,8 million and 52 branches and agencies.A court order obtained by Reuters showed that Chiti had blocked the sale of the 49 per cent Zanaco stake because the ZPA rejected a bid by the Africa International Finance Holdings (AIFH), which Chiti had submitted on behalf of AIFH.AIFH comprises the European Investment Bank, First Rand bank Holdings, International Finance Corporation, Netherlands Development Finance Company and some Zambian individuals.”It is hereby ordered that the defendant (ZPA) by itself and its servants or agents …are hereby restrained from opening negotiations or proceeding to execute any sale or similar agreement for the sale of 49 per cent shares in (Zanaco) until determination of this matter,” the court order said.Chiti said in his court documents that the ZPA had thrown out the AIFH bid on grounds of his involvement.Under Zambian law, a politician seeking to purchase shares in a public firm is supposed to declare his interest publicly.But Chiti said he only acted as an agent for AIFH and that he had no interest or shares in AIFH.Chiti wants the court to give a proper interpretation of the law concerning his involvement before the 49 per cent shares can be disposed of.A senior ZPA official said the agency had received the court order.”There has been some controversy since Rabobank was picked and we thought it would come to this,” the official told Reuters.In October, the ZPA picked Rabo Financial Institutions Development BV, a wholly owned subsidiary of Rabobank as the preferred bidder for the 49 per cent Zanaco shares.The ZPA re-advertised the bidding for Zanaco’s 49 per cent shares in April after negotiations with South Africa’s largest retail bank Absa collapsed.No date has been set for the hearing.-Nampa-Reuters

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