Economy

Mass Resignations at Zambia National Building Society

In a sign of ongoing economic management difficulties being faced by the new government of Zambia, all four directors at the Zambia National Building Society (ZNBS) have resigned from their positions, allegedly citing “personal reasons,” following on mass walk-outs of staff last month.

Director for Banking Emma Miti, Finance director Robert Nkhata and director for Mortgages Mwamba Chibuta tendered their resignations on Thursday while Board secretary Christopher Besa did so two months ago, inside sources have revealed.

Sources said the institution has been badly hit by the resignations which have only left managing director Noriana Muneku to run the affairs of ZNBS, which, like Fannie May and Freddie Mack in the United States, is responsible for the provision of government subsidized home loans to increase the number of homeowners in Zambia.

According to the sources, Muneku and the other directors crossed paths over a matter involving Lusaka Businessman, a Mr. Muhammad who was dragged to court after failing to settle a K350 million mortgaged loan agreement and over the return of suspended human resource manager Jean Chilikwela among other issues.

“Mr Muhammad got a mortgage loan of about K350 million but it went bad. He stopped paying and as per procedure, we were supposed to repossess the mortgaged property and sell, but it was discovered that there was no such property which was mortgaged. That is how this case went to court but now, there seems to be pressure from ZNBS top leadership to have the case withdrawn. That is one of the reasons that has led to the resignation of the other directors who are opposed to the idea,” sources said.

But when contacted for a comment, two of the directors, Besa and Nkhata said they had varying personal reasons for resigning besides what had been revealed.

The sources said corruption had worsened at the country’s biggest lending institution since President Michael Sata dissolved its board in November 2011.

“At the moment unionized workers are observing a silent sit-in protest against senior human resource manager Mrs. Jean Chilikwela who has been recalled from her suspension. If you remember, over a month unionized workers protested demanding her removal on grounds that she is under qualified and she was dubiously hired. So she was subsequently suspended but yesterday (Wednesday) Labour deputy minister Rayford Mbulu held a meeting with the directors and the next thing we saw was directors terminating their contracts and the suspended human resource manager has reported for work today (yesterday), sources explained.

The sources further demanded that the findings of the ZNBS inquiry report be made public.

“This information is just a tip of the iceberg, that report contains a lot of revelations of flaws in the management and dealings at the institution.”

“There is a serious crisis here because, firstly, there is no board in place and managers have been operating haphazardly without anyone controlling the situation,” sources said.

When contacted for a comment, Muneku said the directors exercised their rights.

“It’s their discretion, people have rights and it is at the discretion of every employee to resign and if they shoes to resign you cannot stop them,” she said.

Asked if it was true that she differed with the directors over the decision to withdraw the court case involving Muhammad, Muneku said she was not aware if those were the grounds of the directors’ resignations.

“I am not aware. They have not told me anything about that. And in any case those legal issues are being handled by our legal department. They are the ones who handle such cases,” said Muneku.

President Sata last year dissolved the ZNBS board citing rampant corruption at the institution.

The President wondered how such an ineffective institution could pay their managing director K56 million as salary per month.  He went on to institute a commission of inquiry to probe operations at ZNBS which was headed by Mwila Lumbwe.

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