Major shareholders in the Malawi stock exchange-listed FDH Bank, FDH Financial Holdings Limited, say they are engaged in discussions which could affect shareholding structure in the bank.
This follows conviction of business mogul Thomson Mpinganjira, who is proprietor of M Development, which has a major stake in the bank’s parent company.
As per the legal dictates, convicts are prohibited from owning a bank in the country.
In a cautionary statement published Wednesday, the bank advises its shareholders that he holding company, FDH Financial Holdings Limited, engaged in a shareholding discussion which could result in changes is shareholding structure.
“Shareholders are therefore advised to exercise caution and consult their professional advisors before dealing in their shares until such a time as the results of the discussions are known,” the statement reads.
Mpinganjira was given a nine-year jail term following his conviction in a case of attempting to bribe Constitutional Court judges in the presidential election case.
Section 13 subsection (b) of Fit and Proper requirements of 2018 contained in the Financial Services Act, forbids convicts from holding shares of a financial institution.
The law says a person shall not be eligible to serve as a shareholder if he has been convicted of dishonesty or fraud, forgery, perjury, money laundering or any other material breach of the financial service law.
Reserve Bank of Malawi spokesperson Ralph Tseka said, as discussions on the matter were ongoing, the central bank would only act upon its conclusion.
One of the key shareholders, Old Mutual, said it was still monitoring the trends with caution.
Old Mutual Malawi Chief Executive Officer Edith Jiya said the firm was working with the board as partners (M. Development) ‘to come up with a solution in the shortest time possible.
One of M. Development officials William Mpinganjira was not immediately available for a comment.
FDH Financial Holdings is a parent company of FDH Bank plc, FDH Money Bureau and First Discount House.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.