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Why BancABC boss was forced out



FAILURE to present the group’s audited financial results within the prescribed time frames and a series of corporate governance infractions led to the suspension and subsequent resignation of former BancABC managing director Lance Mambondiani (pictured), new information obtained by The NewsHawks shows.


Mambondiani, one of the new generation of young executives in Zimbabwe, threw in the towel last month following his appointment in 2019 as the bank’s board expressed dismay over the delays in publishing financials in line with local banking laws. The resultant fining of the bank over this, coupled with mismanagement, corporate failures and abuse of company property, worsened the situation.

Mambondiani’s appointment followed the retirement of the bank’s managing director Joseph Sibanda who had succeeded Hashmon Matemera.

Its founding chief executive was the late Douglas Munatsi who served at the top from 2000 to 2014.

Following weeks of speculation surrounding Mambondiani’s exit, documents gleaned by The NewsHawks reveal Mambondiani, who had been widely credited with revolutionising the bank’s systems, was pushed out due to failure to publish audited results, mismanagement, procurement problems and abuse of company property.

According to a letter dated 20 March, Mambondiani wrote to the Reserve Bank of Zimbabwe (RBZ) director of Banking Supervision and Surveillance Phillip Madamombe seeking an extension of the publication date of financial statements, ICAAP Report (internal capital adequacy assessment process), recovery plan and stress testing reporting.

An ICAAP report represents the board and senior management’s ongoing assessment of material risks that a banking institution is exposed to, the mitigants it has put in place and capital adequacy to manage the risks and future business needs.

“We write to advise that our audit for the year ended 31 December is not complete. The added requirement to prepare inflation-adjusted financial statements has widened the audit scope,” Mambondiani wrote.

“In addition, our external auditors-PWC (PriceWaterhouseCoopers) Chartered Accountants (Zimbabwe) have indicated that they are not able to finalise the audit of the full year 2021 financial statements by 31 March 2022. They have indicated that the review of the financial statements will be concluded by 30 April 2022.

“In light of the above, we humbly seek regulatory approval to publish annual financial statements for the full year ended 31 December 2021, on or before 30 April 2022. In addition, we humbly request to submit the ICAAP Report, Recovery Plan and the Stress Testing report on or before 31 May 2022 due to the report’s dependence on financial statements.”

The documents show that on 4 April, the central bank wrote back to BancABC requesting communication from PWC showing that they would have completed the audit process by 31 May.

After receiving correspondence from the RBZ, Mambondiani then wrote another letter addressed to the central bank with attachments of progress that had been made in preparing the financials.

“Reference is made to correspondence dated 4 April 2022 which we received from your esteemed office. The contents of the letter laid out your position on our request to publish financial  statements for FY2022 later,” Mambondiani wrote in a letter dated 30 April 2022.

“Kindly note that the fieldwork has largely been concluded; the outstanding audit workstreams are on journals testing and loan impairments under the IFRS 9 (and any requests arising from their review processes.) The review of the financial statements and workings done to restate the numbers to inflation-adjusted terms has also commenced. The bank is of the view that the fieldwork will have been concluded before 30 April 2022, and other remaining procedures including the financial statements review and issuance of the audit opinion by the 31st of May as stated by PWC.”

On 27 May, the RBZ wrote to BancABC expressing its displeasure over the late publication of results.

“As indicated in our earlier correspondence to ABC on 4 April 2022, we are concerned that the justification for the extension of the period to publish the financial results as at 31December 2021, cited by the auditors are matters that are within the control of institution and the auditors,” the letter reads.

“In light of the foregoing, we bring to your attention that failure to publish financial statements within prescribed times is a breach of Section 17 of the Banking Act [Chapter 24:20] which requires every banking institution to conduct its business and other operations in line with sound administration and accounting practices and procedures, adhering to proper risk management policies, complying with the terms and conditions of its management policies, complying with the terms and conditions of its registration and within any given to it by the Reserve Bank of Zimbabwe or the registrar in terms of the Act.

“We are concerned that failure by BancABC Zimbabwe to publish financial statements in line with regulatory requirements demonstrates conduct of business which is in variance with sound administration, proper risk management and sound corporate governance practices.”
The correspondence also shows that after reading the riot act, the central bank then fined BancABC for failing to comply with the financial service sector regulations.

“Subject to the above background, we give a notice of intention to penalize ABC Zimbabwe Limited in terms of the Banking Act and the banking institution is required to submit representations within seven  (7) working days ending June 2022 showing cause why the proposed supervisory action should not be taken,” the letter further reads.

“We advise that ABC Zimbabwe Limited will be liable to a daily penalty at level 10 which is equivalent to an amount of US$70 000 in terms of First Schedule to the Criminal Law (Codification and Reform) Act [Chapter 9:23]. Please note that the monetary penalty will (be) calculated from 1 June 2022 to the date of publication of financials.”

Questions sent to RBZ governor John Mangudya and Mambondiani’s mobile phones were not responded to at the time of publication. Calls made to the central bank chief and the former BancABC boss went unanswered.

BancABC, a unit of ABC Holdings whose majority shareholder is AtlasMara, was once listed on the Zimbabwe Stock Exchange before former Barclays Plc chief executive Bob Diamond and British-Ugandan entrepreneur Ashish Thakkar took control of the financial institution.
BancABC has its primary listing on the Botswana Stock Exchange and secondary listing on the Zimbabwe Stock Exchange.

The group’s shareholders include Old Mutual, Botswana Insurance Fund and the International Finance Corporation. It is part of AtlasMara.

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