Oliver Kazunga, Senior Business Reporter
LEGAL experts have said Barclays Bank Zimbabwe’s workers have a right to challenge the sale of the country’s unit to First Merchant Bank of Malawi but admit the matter is “complex”.
The disposal of the local unit by Barclays Plc is part of a continent wide exit by the British bank, to focus on the European and American markets.
A group of 63 Barclays Bank low-level managers have lobbied the Government to block the bank’s sale arguing that the deal violates Zimbabwe’s Indigenisation and Economic Empowerment laws.
Bank managers have also demanded that the British headquartered Barclays Plc that recently hived off about 57 percent shareholding in the local unit, should have given a consortium led by Barclays Zimbabwe managing director, Mr George Guvamatanga, the right to first refusal.
In separate interviews, legal experts said that while managers of the local banking unit have the right to first refusal, the matter was a complex one, should it spill into the courts of law.
Prominent lawyer, Mr Jonathan Samkange, said Barclays workers have a right to buy the local unit.
“The fact that it has not gone through the courts of law, success does not take the right of an individual to embark on another case. In fact, the right does not even arise because of the Indigenisation Law, it arises because a person says ‘I have a right to buy’ and that right has been taken away from him,” he said.
Mr Samkange said Barclays Bank Zimbabwe bank managers have the right to buy the local unit arising from the fact that they are former workers.
“And as such they have the right to be given the first option to buy the shares. And the chances of the Courts agreeing to their argument are quite high despite the matter looking to be complex in nature.
“The fact that some other people have done it and have not succeeded, does not take away their right to try again.”
The controversy engulfing Barclays Zimbabwe began after Barclays Plc sold shares to the Malawi listed financial firm, which also operates in Botswana, Mozambique and Zambia
The bank managers, who had also filed a case at the High Court challenging the same, have since withdrawn the application, opting to focus on lobbying the Government.
“In my view, the disposal of such transactions is very complex and ultimately Barclays Bank Plc has the final say on who they want to sell the shares to,” said another senior lawyer who preferred not to be named citing professional reasons.
“Yes, the Indigenisation and Economic Empowerment law is there, but banking is about capital and if they feel the managers may not have enough capital to buy the banking unit, they (Barclays Bank Plc) have the final say on the disposal of the unit.
“Moreso, despite the Indigenisation and Economic Empowerment Act existing, we still have a number of foreign-owned banks operating in the country controlling nearly 100 percent shares if not 100 percent,” he said.
Last week, the Permanent Secretary in the Ministry of Youth, Indigenisation, and Economic Empowerment, Dr Desire Sibanda, said the Government was seized with the matter and would announce its position in due course.
The legal expert added that while workers have a right to seek justice, the Law of Contract does not force parties into contractual agreements.
“While the Law of Contract does not force parties to enter into contractual arrangements, I also suspect that Barclays Bank Plc decided to dispose of shares of their local banking unit to First Merchant Bank of Malawi because of their sound relationship that has been existing over the years,” said the expert.
The lawyers said the Indigenisation Law was part of the factors that industries or companies consider when seeking investment, particularly the need to engage indigenous people when setting base to operate in the country.
“The law (Indigenisation) does not, however, force a party to cede shares to indigenous persons but rather it encourages companies to cede the shares to the locals. But you can still say I don’t want to sell my company to an African and I cannot go to the courts of law and say why has he not sold to me,” said Mr Samkange.