Finance Minister Denounces Mahtani for Operating Bank Illegally

As a brewing war is taking shape between the Post Newspaper and the ruling Patriotic Front (PF) government, new disclosures are coming to light regarding statements made by Finance Minister Alexander Chikwanda captured by an wiretap with regard to the controversial millionaire Rajan Mahtani, the chairman of Finance Bank.

According to a transcript of a recording submitted before the Lusaka High Court by the Post obtained by lawyers Nchito and Nchito, Finance Minister Chikwanda is heard discussing the matter of Mahtani’s long-disputed status as the majority shareholder of Finance Bank, which is illegal under Zambian law.

“There are two things, his bank has continually and persistently and consistently breached the conditions of the Banking and Financial Services Act,” Chikwanda said in the recording, referring to Mahtani’s Finance Bank. “It can put me in a moral conflict to allow other banks to conform to the provisions of the Banking and Financial Services Act while Mahtani gets out. So he will have to comply. Two, at that time, his Bank paid Zambians poorest…”

Chikwanda goes on to say in Bemba that the cartel members are all “morally compromised beyond redemption,” ominously declaring that M’membe, Nchito, and Mahtani “would have their day.”

The Finance Minister’s official acknowledgement that Mr. Mahtani is operating Finance Bank outside of the law comes as a bombshell, answering questions dating back to December 31, 2010, when the Bank of Zambia (BOZ) moved to suspend shareholder interest in the institution after a forensic audit by the consulting firm Edward Nathan Sonneberg discovered that Mahtani actually owned more than 56% of the bank through transparent intermediaries, while the supposed “strategic stake” by Credit Suisse was actually a disguised loan rather than a shareholding.

Earlier in the recording, Chikwanda commented that Mahtani had been badgering him for a meeting because he was “feeling frantic” over the situation with Zambezi Portland Cement (ZPC), an Ndola-based cement producer whose original owners accuse him of illegally stealing control of the company. The Chikwanda transcript reveals that Mahtani was seeking government influence to protect his business from the new cement plant being built by Nigerian billionaire Aliko Dangote.

Mahtani, who had been one of the primary financial supporters of Michael Sata’s presidential campaigns, was restored ownership of Finance Bank within three weeks of the election date. A Commission of Inquiry as initially formed to investigate the government’s seizure of the bank and subsequent sale to First Rand, however, President Sata decided to act and return the bank to Mahtani before the commission could begin its work.

This disclosure from the Finance Minister will place new pressure on the Bank of Zambia to act and enforce the BFSA, and may scupper ambitious plans announced by Mahtani to launch an initial public offering (IPO) on the Lusaka Stock Exchange, as well as floating shares in Nairobi, Johannesburg, and London.

The release of Chikwanda’s recording by the Post newspaper owner Fred M’membe is related to a wider struggle among members of a so-called “cartel” against the PF government, which has intensified since the firing of Justice Minister Wynter Kabimba.

Mahtani has played an outsized role in supporting the cartel, including sending his employee who sits on the board of Zambezi Portland Cement, Bishop John Mambo, as one of the primary attack dogs criticising Chikwanda.

On Tuesday, the police along with officers of the Zambian Revenue Authority (ZRA) raided the headquarters of the Post Newspaper over unpaid back taxes dating back several years. M’membe, who is represented by the Director of Public Prosecutions Mutembo Nchito as his defence counsel, was able to achieve an injunction to prevent the seizure of his property for the time being.


  1. Ricky Bobby?

    It has always been clear that Mahtani has been breaking the law over his ownership of Finance Bank. For political reasons, the Bank of Zambia is failing to do its job and correct the wrong.
    Though RB was wrong to try to sell it for $5 million and to FNB, the principle that it should be taken over and sold to another entity was correct.
    An individual is not allowed to own more than 25% shares in any bank and the BoZ knows that Mahtani is in breach of this section of the law but are keeping quiet probably waiting for the time a new president takes over from Sata.
    To me Zambia has become just like the Wild West, except maybe we can call it Wild Africa.

  2. amagedon

    Mahtan is a lazo who’s going to put some of his friends in trouble after leaving government

  3. Bob

    Political interference in not just Finance Bank but many other issues including tax payment by some companies such as the Post itself is what makes Zambian laws a joke. The laws maybe in place, but these can be waived silently due to the political connections some individuals have. Even the president by now should have vacated office using the available laws but the man, despite not being in a state allowing him to effectively discharge his functions for many months still hangs in there! This country is a failed state to say the least. Politicians are using poverty, low civic education levels and patronage as tools to get away with it. God help us.

  4. Nox

    The person Mmembe sent to record and trap Chikwanda is a double dealer. The conversation sounds like one meant to prop Chikwanda’s image in order to replace Sata. Watch the space. PF seriously has a leadership deficiency and Chikwanda through this conversation is being rebranded for the top job. Chikwanda could have been forewarned about the purpose of the discussion. I fail to believe that all this was said without his knowledge. When you add up all the individual items discussed, one concludes that it was a well-choreographed presentation for a specific purpose.

  5. kopala sapalar

    I will sat exposing them one by one i.e mmembe,nchito,mwanambale,Dr solomon jere,chellah i dont care even if i lose my job its too muc. I made winter to go n they will also go watch my words.

  6. kopala sapalar

    Nalikaba guys ka? mark my. Words pipo!!! Munzi wapya

  7. Mwamoneni

    Ba Chikwanda is a great man. We need more of such men in our politics. The problem is that they are not many…

  8. Ring leader

    @Bob, Mahtani has evaded tax on transfer of properties from one group to another group, firstly by not paying any tax on such transfers, then transferring gain on these properties to his loss making outfits, thereby evading tax on profit making companies. The biggest tax evasion of $40,000,000 has been on transfer of shares to Credit Suisse and from Finsbury Investment to overseas outfits and his fake individual holders to Finsbury Investment, Loita and so on. How many nurses can be employed with this kind of money? How many teachers can be paid for next 5 years with this kind of money? Mahtani is a lazo.

  9. CORE

    Nox is spot-on.The guy who recorded Chikwanda forewarned him.The POST(Mmembe) has not seen the bobby trap.

  10. katongo nsambe



    You know very well that Mahtani is govt and govt is Mahtani . he did what he did to make sata katongo President . he spent billions on PF campaigns . now pf should reward him in return . Mahtani mulilo uwaikatako apya . Mahtani is small god in Zambia . he is untouchable .In short he is criminals . because of Govt of criminals the are protecting their fellow criminals . Any way God is watching

  12. Mutale

    Crime does not pay. Law catches up.

  13. Mwine Mushi

    Bane bane bane. Do we have facts or we are speaking from without? Let’s question our selves;
    1. Has Finance Bank been operating not in conformity with the law?
    2. If so, why hasn’t BOZ pursued FBZ and guided in correcting the situation, as big brother of the banking fraternity.
    3.For those saying 40% shares are owned by credit suisse in a way to evade tax. How much shares does Rabobank have in ZANACO? Is that tax evasion?
    Let’s be realistic and have an open mind ?
    Food for thought

  14. Belinda Nafwa

    Got me thinking Mwine Mushi

  15. Pankolobwato

    A bank worth $100 million to be sold for $5 million ?
    Acts of malice. Well noted ABC

  16. Wit

    Gentlemen, after reading this article and comments, i make the following observations.
    1. There is no way Bank of Zambia would allow a Bank to continue running normally if indeed such purported infractions existed. is absurd to suggest that the Minister of Finance controls Bank of Zambia. The Minister does not supervise Banks, the technocrats do.
    3.The Minister alludes to injustice and corruption under the Rupiah Banda led government in the manner Finance Bank was repossessed. In essence, justice prevailed when the Bank was handed back .
    4.I am aware that Bank of Zambia through a Government Gazette Notice No 144 of 2014 terminated the possession of the Bank with effect from 7th October, 2011 and restored the shareholder interest in the Bank to its owners without further liability, assurance or encumbrance. Therefore, it is now a legal position and not political
    5.Finance Bank belongs to individuals just like a number of us “own” companies and is not parastatal. It belongs to Mahtani and other shareholders who have worked hard to get it to where it is today. The notion that the Bank be taken back from him when Governments change is misconceived.

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