Lusaka - New Zambian President Michael Sata on Monday reversed the $5.4m sale of the nation's Finance Bank to South Africa's second-biggest lender FirstRand [JSE:FSR].
“There's no document of sale for Finance Bank and I am
directing the Ministry of Finance to take the bank back to its owners
immediately,” Sata said as at the swearing-in ceremony of newly appointed
government bureaucrats in Lusaka.
The Zambian central bank said last month FirstRand would pay
$5.4m for the bank, which it seized from its shareholders in 2010 for violating
the law through unsound practices, including insider borrowing.
Although only a week in the job, Sata has wasted no time in
kicking out all vestiges of the previous administration of Rupiah Banda, whose
Movement for Multi-party Democracy (MMD) had been in charge of the southern
African nation for 20 years.
Sata has appointed a new head of the country’s
anti-corruption agency and fired out respected central bank governor Caleb
FirstRand, South Africa’s second-largest bank, said it had
yet to receive formal notification of the new government’s decision.
“We continue to liaise with the Bank of Zambia, which was
the counterparty responsible for the transaction, when we have clarity we will
comment further,” Chief Executive Sizwe Nxasana said in an e-mailed statement
Finance Bank's chairperson welcomed the move, saying the
original decision to seize the bank’s assets had been based on politics.
“I am really grateful,” said Rajan Mahtani. “I am happy that
Zambian investment has been restored to Zambian investors. It was all
Zambia’s central bank said last month it had accepted
FirstRand’s offer because the South African lender has a track record in
managing weak banking institutions.
It said FirstRand would run all Finance Bank’s 34 branches
and 16 agencies, while the Bank of Zambia would keep operating the problem
The 74-year-old Sata swept to power two weeks ago on the
back of voters looking for change in a country that has seen its economy grow
but who felt the riches from its mines had not made their way to the people or
created enough jobs.
Sata has said he would look at last year’s sale of
state-owned fixed-line operator Zamtel to Libya’s LAP Green Networks for $257m,
and investigate state fuel purchasing deals in Africa’s biggest copper
Last week the new government asked banks to cut interest
rates and copper exporters to route all payments via the central bank.