Mahtani Allegedly Continues to Pull Strings at FBZ in Lamasat Extortion

Mahtani-KapumpaControversial banker Rajan Mahtani appears to be continuing to exert managerial control over Finance Bank of Zambia Ltd. despite having completed the sale of 100% of the bank to Atlas Mara, owner of BancABC, more than seven months ago.

The revelation comes to light as the Lusaka High Court has moved to intervene to prevent to FBZ from appointing a receiver to Lamasat, which has a $13 million term loan facility.

The news was first reported by The Mast newspaper on 6 February, which indicated that Lamasat had only taken out the 60-month term loan in order to consolidate its existing credit facilities at FBZ to a single loan of $10,000,000 and a settlement of $3,408,624.65.

According to the court case, Lamasat was only meant to pay back the loan with interest in 60 equal monthly installments. But instead, suddenly on January 26 FBZ sent a letter to Lamasat demanding full repayment of more than $12 million and arrears of an overdrawn account. The bank demanded this from Lamasat on a seemingly impossible deadline of just 14 days, as reported by The Mast.

FBZ’s demand that Lamasat repay its entire term loan facility appeared designed to extort the company and force them into receivership, allowing the bank to essentially seize control of the majority shareholding. In the past, this has been a signature pattern of corporate raids overseen by Mr. Mahtani, which led to his attempted seizure of companies such as the Radisson Blue Hotel and Zambezi Portland Cement, leading observers to allege that Mahtani continues to secretly pulls the strings at FBZ despite having been officially bought out.

The Mast article indicates that the reason why FBZ moved to force them into receivership was that Lamasat in the process of trying to refinance their term loan facility with Madison Asset Finance Company Ltd, and move their business away from FBZ.

The issues surrounding FBZ’s conduct toward Lamasat raises questions regarding where control actually resides over the bank. On 6 July 2016 Atlas Mara, the new African banking conglomerate led by Bob Diamond and Ashish Thakkar, announced that the acquisition of FBZ had been completed at a $61 million buyout of Mahtani. Atlas Mara also announced that it was appointing former Standard Chartered Bank Africa chief risk officer Benjamin Dabrah as managing director.

In a statement issued last July, Atlas Mara Chief Executive John Vitalo acknowledged that operational integration would take some time: “We are enthusiastic about Zambia’s long-term prospects and our ability to play a leading role in the development of financial services in the country. While there is much to be done to fully implement our operational integration plans, we are excited about the opportunity afforded by a larger footprint in this important market for us.”


  1. indoshi palupe

    Comment. Oh, thats a lot of moola…and this chap is still at large!

  2. Gwaza

    Convicted where naimwe. Do we look like food who you can lie to?

    • Lusaka Lawyer

      Mahtani has been convicted of fraud two times by the courts, and has even served jail time, so indeed it is factually correct that he is a convicted criminal.

  3. Gwaza

    Why won’t Lamasat pay up? How can a receivership be stopped by injunction? Isn’t this the same nonsense that Nkonde Judge is doing?

    • Er4837

      Lamasat has paid up – they make the regular monthly payments. This is loan sharking.

  4. mawe

    You have started deleting comments again!

  5. Big J

    They bought FBZ for $61 million? And Pres. RB said it was worth $4 million when he sold it to FNB for that amount. Do you think we are stupid and cannot do the math?

    • Native

      That was the bank’s net worth at time of the BOZ takeover then. Between Sata giving it back to Mathani and Atlas Mara buying it FBZ had recovered somewhat from all the GRZ business it had gotten via big ZRA, RATSA and other accounts via the charges it levied.

  6. j.c

    let hm mahatani say th truethh if e sold it y comin back?

  7. dablin

    A great Zambia will start with our great selves! We must strive to be the best of ourselves!

  8. Native

    That was the bank’s net worth at time of the BOZ takeover then. Between Sata giving it back to Mathani and Atlas Mara buying it FBZ had recovered somewhat from all the GRZ business it had gotten via big ZRA, RATSA and other accounts via the charges it levied.

  9. Native

    The article makes mention of Lamasat having the intention of taking further debt burden from Madison Asset Finance over and above its overdraft commitment to FBZ. Any bank worth its salt would have done what FBZ has done to protect its interest owing to the fact that Lamasat has in the very recent past been facing serious liquidity problems. Lamasat has, until recently, been a very vibrant company and we have to ask who its largest customers are and who amongst those could be heavily indebted to the manufacturing and trading company. I will risk guessing that GRZ must be one of the largest debtors to lamasat and because of that the company has no cash. Now GRZ owes almost everybody (individual and corporate) in zambia and externally and if there is any “cartel” that should be cited it is that which is running govt that is guilty of economically “sabotaging” private and public business activity in zambia because of incompetence. Which “cartel” sabotaged FISP 2016/17 or the re-opening of Mulungushi Textiles might I ask? Which “cartel” sold vehicles under false pretences to civil servants for which they’ve suffered salary deduction but have no ownership of those assets? Zambians have eyes but do not see and yes have ears but do not hear hence their gullibility. Salapukeni mwila bepwa.

  10. lungu

    In an article purportedly written by a fake ‘Evans Mulenga’ allegations are, once again, being made against Dr. Mahtani to skim around the issue and put the blame on Dr. Mahtani who has absolutely nothing to do with the pressure for settlement of Lamasat’s legitimate liability. This style is common to the ‘ cartel gang’ who has been persecuting Dr. Mahtani for their illegitimate ‘gains’ still pending due process except for Odys who apologised profusely over the Radison Blue saga.
    The position is very straight forward. Lamasat owes money to Finance Bank, defaulted in his undertakings and Bank of Zambia decided that the outstanding loans should be called in as Lamasat was delinquent. Lamasat made many promises knowing full well that they lacked seriousness and truth. They have now run to seek redress from our Courts (outside the norm) when they know that they have no case but want to play for time. Can you trust such a conglomerate? Does Zambia need such foreigners? Is this how they became a conglomerate? Now they have reduced themselves to pay Zambia Reports (known for their ‘hate’ for Mahtani and caused him damage which is being redressed by International Courts of Law) to call Mahtani a ‘convicted fraudster’! Is this not a shame and questions the credibility of Lamasat and indeed the Zambia Report and their ‘fake’ reporter.
    Lamasat and indeed Zambia Reports and their ‘fake reporters’ will face the day of reckoning and we pray that their souls will not rot in ‘hell’!

    • Puungwa

      Why are lebanese investors borrowing money in zambia?

      • Native

        Why shouldn’t they when they operate in zambia? It’s not like the money in zambian banks is exactly zambian money is it? If you check closely you will find that indigenous zambians do not really have positive net cash balances because even the so called “zambian banks” have “foreign” capital injection(s) to meet statutory reserve ratios and other operational requirements. Are the jobs at risk zambian or lebanese?

  11. Paston mwale

    Lamasat is not doing fine, workers are on forced leave without salaries and gratuity.

    • Native

      Since Lamasat is being forced into liquidation let the company also attach its debtors in defence of FBZ’s motion so that the debtors can be compelled to pay back. It’s a possible avenue that may just save the company and the hundreds of jobs of breadwinners whose families’ livelihoods are in jeopardy.

  12. Best wishes

    Let us wait and see

Comments are closed.