Following months of anticipation, controversial businessman Rajan Mahtani has made the surprising move to withdraw the planned listing of Finance Bank of Zambia on the Lusaka Stock Exchange (LuSE), according to information published by Zambian Eye.
The decision not to list shares of Finance Bank for public investors was made as part of attempt by Mahtani to “dribble” the new President Edgar Lungu, a source informs Zambia Reports.
Allegedly Mahtani was granted a meeting with President Lungu this past Wednesday to pledge his loyalty, while at the same time doing exactly the opposite of what he promised the president. Mahtani is believed to have provided Lungu’s competitor, Wynter Kabimba of the Rainbow Party, with a campaign war chest of $1.5 million last week, the source said. These funds so far have been used by Kabimba’s party to purchase more than 15 vehicles which have been deployed to every province to begin coordination actions.
“Mahtani thinks he can fool Lungu and betray him, just like he did with Chiluba, Mwanawasa, and Sata,” the source said. “He is getting very nervous with the corruption case against the DPP Mutembo Nchito, because several of the illegal nolle prosequis he issued related to his own criminal cases.”
According to the source, Mahtani’s claim to list the bank’s shares for sale was a pre-election bluff that he never intended to fulfill, as it would have forced him to surrender his majority control and require him to make the bank’s operations meet basic compliance and transparency standards for investors that would not be possible due to a number of questionable deals, insider borrowing, and money laundering allegations faced by the bank.
During a press conference on January 13, Mahtani claimed that the listing was imminent:
“We have commenced our process of “listing” by ensuring that all our shares are now ‘quoted’ on the securities exchange commission and to this effect will be presented with confirmations by the securities exchange commission, chairman, Mr. Chintu Mulendema, this morning,” he said.
“Our ‘quoted status’ on the Lusaka stock exchange is being followed up closely to ensure that the date for the actual listing will not exceed 31st march this year. Despite all odds, we are almost confident also of listing on the London stock exchange soon thereafter,” Mahtani continued.
There have been other times that the listing of Finance Bank on the Lusaka Stock Exchange has been promised but not fulfilled, including in 2008, 2011, 2013, and 2014.
In 2011, the Bank of Zambia (BOZ) suspended shareholder interest in the bank after finding that Mahtani had violated the Banking and Financial Services Act by illegally owning more than 56% of the financial institution through intermediaries. However, once President Michael Sata was elected, the bank was unilaterally returned to Mr. Mahtani.
A valuation document from the international accounting firm Deloitte found that Finance Bank was worth only $5.4 million in 2011 – far below the “$250 million” Mahtani had said he hoped to raise by listing the company on LuSE.