Dear Editor,
Please do me the courtesy of withholding my surname. Unfortunately, our country lives under a shadow of fear to express one’s mind, especially if it concerns a member of the powerful cartel.
I wish to comment on your most recent article about Dr. Rajan Mahtani entitled “Finance Bank Was Sold at True Value of $5m in 2011.”
While I couldn’t possibly know what the true value of Mr. Mahtani’s bank might be, as someone who works in finance, it is certainly possible that Finance Bank has overleveraged to borrowers related to its own shareholdings, which in theory would render the bank nothing more than an elaborate pyramid scheme moving government money from one location to another and then back again. This is not that surprising, but what shocks me is that the authorities have done nothing to enforce the law.
I was shocked and outraged to see the comments by our current Finance Minister Alexander Chikwanda, who stated on the record – a document entered before a court of law – that he is fully aware that Mr. Mahtani is breaking the law as recently as three months ago, and yet no action is taken against him!!
There is a reason why Zambia has a Banking and Financial Services Act (BFSA). This law was enacted by the Parliament of the Republic of Zambia in 1994 with the express purpose of providing “safeguards for investors in and customers of banks and financial institutions.” It was set up to protect depositors from defaults and protect business from unfair or predatory lending terms – which certainly Mr Mahtani has been accused of in the past. There is a very good reason why it is illegal – not just in Zambia, but all over the world – for one party to own a majority of voting shares in a financial institution.
If indeed Mr. Mahtani is continuing to operate Finance Bank in violation of the BFSA as indicated by Finance Minister Chikwanda, under Article 23(6) he should be subject immediately to a fine of 100,000 penalty units, five years in prison, or both.
My question to you, dear Editor, as well as to both the leading presidential candidates Edgar Lungu and Hakainde Hichilema, is what kind of country is Zambia becoming when we are unable to enforce our own banking code? When will our leadership summon the political will to tackle to this impunity?
I demand answers.
Sincerely,
John P.
Lusaka
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