Controversial 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.”