Interfin Bank buys disputed CFX shares

By Gilbert Muponda

Interfin Financial Services Limited ( Interfin Bank) on 5 July 2010 sealed its reverse take-over of the disputed CFX Financial Services and traded on the Zimbabwe Stock Exchange (ZSE) for the first time around mid-morning thereby taking over the CFX ownership dispute and controversy.

Interfin are now liable to my claim due to their attempt to cover up the ownership dispute by rebranding and changing CFX Bank operations. This is clear money and transaction laundering being executed by Farai Rwodzi and Interfin Bank.

The 309 million Century Bank Shares I owned through my Company ENG Capital were fraudulently transferred and converted at the time of the merger between CFX Bank and Century in 2004 and Interfin Bank proceeded to take over CFX ignoring the disputed ownership of FCFX Bank and the attendant reputational risk. I even wrote to Credit Suisse to dissuade them from taking up shareholding in CFX FS. Credit Suisse has 40% shareholding in FBZ.

The ownership dispute was triggered by the special bargain sale of 309,000,000 shares on 12 May 2004 but the total shares claimed by me and my Company is 900,000,000 the balance was transferred in piece meal fashion to avoid detection of the fraud and transaction laundering that was being perpetrated.

CFX was nothing more than a forex trading shop which was used to swallow Century Bank as a cover up of the illegal seizure of the Bank. I lost Century Bank shares owned through ENG Capital after they were “fraudulently” converted into CFX Bank which took over Century Bank assets and Branch network.

My specification was part of a grand plan to dispossess him of his shares in Century Bank, held through ENG. And it appears Mr. Farai Rwodzi and Interfin are trying to ignore the reality of the dispute and are attempting to launder the transaction by reverse listing Interfin whilst simultaneously destroying CFX Brand to cover their tracks of involvement in clear fraud and money and transaction laundering.

Through my lawyers Gutu and Chikowero Attorneys I clearly warned Interfin that “This transaction may expose your bank to high reputational risk as the dispute may entangle your organization as the rightful owners of CFX/Century bank seek to reclaim their stolen shares.” That warning is still in force as I seek compensation for my shares fraudulently seized from me and my Company.

In addition through my lawyers Gutu & Chikowero Attorneys-at-law wrote to CFX company secretary Patricia advising her and the Company about our intention to purse this matter until it’s resolved amicably. CFX Bank has remained under the curse of an established stigma due to the fraud described above and failure of management to properly handle the matter.

CFX FS directors noted in their circular to shareholders that a perennial crisis within the banking arm had made it impossible for CFX Bank to continue operations without getting into the merger, as funds raised to recapitalize the bank were already being spent on operations because of the failure of their brand to appeal to an untrusting public.

“Despite being recapitalized through the rights offer, CFX Bank has to date been unable to mobilize sufficient business to return to profitability, resultantly failing to achieve and maintain the minimum regulatory capital level of US$12,5 million,” said the directors in a circular. This is because of the public’s general awareness to the underlying ownership dispute which has now been transferred to Interfin Bank and its brand.

The CFX brand has been underperforming because all market participants in Zimbabwe are fully aware of my claim and the high reputational risk that comes with ignoring the claim.

When the illegal transfer and conversion of my 309 million Century Bank Shares was done on or around 12 May 2004 I through my lawyers Ziweni and Company filed a high court application to block the sale of the shares. This record should still be there at the Harare High Court. As soon as we filed this application I was then specified without a hearing.

This limited my ability to follow up the application. My lawyer and his firm were also specified leaving me without legal representation on the matter. This was all done to ensure that the 309 million shares are sold, transferred and Century/CFX Bank is snatched from my Company – ENG Capital.

Interfin Bank Zimbabwe is hoping the ownership problem will disappear by rebranding the Bank and renaming it Interfin Commercial Bank. The hope to hide the tracks of the theft and fraud by changing colours, brand and outside appearance of a stolen asset. This is the trick which CFX Bank tried when they fraudulently took over Century Bank Assets and tried to rebrand it into CFX Bank dropping the name Century from the rebranded Bank.

Interfin Bank has decided to inherit Century/CFX Bank ownership problems. By trying to swallow an illegally acquired asset Interfin is now becoming party to money and transaction laundering. And this has its own benefits ,and consequences.

The trend in Zimbabwe is that once a Bank or Asset is illegally seized there is an immediate need to rebrand it. Intermarket Bank was swallowed by ZB Bank. Beverly Building Society was rebranded to CBZ Building society. Trust, Barbican and Royal Bank were rebranded as ZABG.

It is clear there is now a preferred modus operandi of seizing assets and renaming them and rebranding them. Interfin took over my Bank Century/CFX and then proceed to rename it and rebrand it as Interfin Commercial Bank since they desperately need the vast commercial Bank network and infrastructure owned by my Bank Century/CFX bank.

The company acquired a controlling stake in CFX last year after shareholders of the financially-distressed banking institution either ignored or failed to take up their rights in a $10 million equity offering underwritten by the acquirer. “IBC (Interfin Banking Corporation) will take over CFX Bank’s employees and their related liabilities,” CFX added. It appears Interfin ignored my advice.

Only 1% of the company’s shareholders subscribed, making it the country’s worst equity offering on record. Technically, the underwriter commits to buy up whatever remains of an equity offering in the case of under-subscription. It is clear the other shareholders did not follow their rights because they saw the merit of my claim and the future litigation that lies ahead.

CFX had floated the equity offering to raise the minimum capital requirements set by the Reserve Bank of Zimbabwe following the collapse of its equity-financing negotiations with the Finance Bank of Zambia backed by Credit Suisse. Finance Bank of Zambia and Credit Suisse pulled out after I had written to them and convinced them of my ownership claim.

It is unfortunate that Interfin has decided to ignore what other bigger banks have admitted to be a legitimate ownership dispute which must be solved first before the bank can transfer ownership or assets. Interfin Holdings splurged US$5,3 million for the unsubscribed ordinary shares and preference shares.

A few local banks once came into CFX FS and left. POSB, first, with a huge outlays of the now out-of-circulation Zimbabwe dollars, and second, Premier Banking Corporation, which raised speculation about a merger. Both left in a huff, although POSB still keeps clutching to a small parcel in CFX FS, which will now be diluted after the merger with Interfin Banking Corporation. These all left because of the ownership dispute which the CF Management has been trying to ignore and wish away.

This article appears courtesy of GMRI CAPITAL – www.gmricapital.com . It is original content generated for 3MG MEDIA.

Gilbert Muponda is an Investment Banker and Founder of GMRI CAPITAL . He can be reached at; www.ZimFace.com and www.facebook.com/muponda

Email: [email protected]

Skype ID: gilbert.Muponda

Twitter: http://twitter.com/gmricapital

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