Loitta Group Chief Executive Officer John Chinyanta has revealed how he pulled out his investment from Rajan Mahtani’s Finance Bank shareholding because of problems with the dodgy shareholding structure.
Addressing delegates at United Kingdom funded Nyamuka Zambia business conference in Lusaka last week, Chinyanta, a Zambian entrepreneur who is based in Mauritius said his business has spread across Africa and that he has always been trying to find investment opportunities in Zambia.
Chinyanta thinly suggested that his company could have had more impact in the country but that the conduct of Mahtani in running Finance Bank scared his money away.
“We pulled out of Zambia because of structural issues with Finance Bank but we still own the Zamlink,” he told a packed audience that comprised diplomats, senior government officials and prominent businessmen.
He said at some point, the company acquired shareholding in Mahtani’s finance Bank but that there were problems with shareholding structures and he decided to pull out.
Chinyanta said his company has only been managing the Zamlink business, an internet programme that enables bank customers without Visa cards to conducting inter-banking business through Automatic Tailored Machines (ATMs) withdraws.
This would not be the first investor to run away. Earlier this year, Credit Suisse significantly reduced their “shareholding” in the bank by 25%, even though under the terms of their purchase they would be guaranteed at least $13 million in the event of an IPO.
Mahtani has found himself in trouble for over subscribing his shares in Finance Bank and fronting other people so that he can remain with the major stake in the bank, which is against Zambian law.
These are issues that have been subjected to investigations and even led to the repossession of the bank under the Act (BFSA) on ground of suspicious banking transactions that breached the Banking and Financial Services Act, including money laundering and insider borrowings – unlawful practices which similar led to the revocation of Mahtani’s banking license in Malawi.
On June 2 of this year, Mahtani was arrested and charged on two counts of criminal forgery, which followers earlier arrests in 2011 on a series of other financial offences.
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