Zambia's new president cancels bank sale amid shake-up
Category: Mergers & Aquisitions
October 3, 2011
Michael Sata President has begun a mass shake-out of political appointees inherited from his predecessor.
Newly-elected Zambian President Michael Sata has cancelled the controversial sale of one of the country's banks.
The $5.4bn sale of Finance Bank to FirstRand of South Africa was agreed under his predecessor, Rupiah Banda.
The bank had been seized from its shareholders in 2010 by Zambia's central bank, who alleged illegal and unsound practices.
Mr Sata, whose election ended the 20-year rule of the previous regime, has vowed to shake-up the political system.
After only a week in power, the president has already sacked the head of the central bank, as well as a string of other appointees of the previous government, including the head of the anti-corruption authority.
The original decision of the central bank to strip the bank's shareholders has also been overturned.
"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," said Mr Sata.
The bank's chairman, Rajan Mahtani, said he was grateful: "I am happy that Zambian investment has been restored to Zambian investors. It was all politically motivated."
FirstRand, a major South African bank, said it had received no formal notification of the decision and would continue to liaise with the Zambian central bank.