Zimbabwean Investment Bank suspended in Uganda for fraud

KAMPALA, UGANDA – Ugandan Capital Markets Authority has suspended Zimbabwean owned Investment Bank ReNaissance Capital Limited Uganda and blacklisted two Zimbabwean stokebrokers based in Kampala for improper conduct on the market.

Zimbabwean owned Investment Bank and Fund Manager ReNaissance Capital Limited Uganda has also sacked blacklisted the two senior former managers to clean up its battered image. 

Rumbidzayi Nyabadza, the General Manager, and Elton Mutize, the Business Development Executive who were at the helm when the brokerage firm took a financial plunge were suspended by the Ugandan Capital Markets Authority.

Rennaissance Capital is a fund management and investment advisory firm in Uganda owned by Zimbabwean Insurance and financial investment mogul Pattison Timba, the Executive Chairman of ReNaissance Financial Holdings Limited.

The public has been warned against transacting any business with the former managers, as the company serves out its second and final month of suspension. The public notice adds that “anyone who deals with them does so at his or her own risk.”

The notice does not mention why both men have been fired. But in a market where management changes have been celebrated with lavish cocktails and sumptuous dinners, the firm’s clients are bound to interpret the public notice as a move linking the two executives to the problems haunting ReNaissance Capital.

Interestingly, the public notice came early this week, more than three months since Nyabadza is said to have left the firm under unclear circumstances.

Nevertheless, the move is seen as the company’s effort to win back public confidence after the Capital Markets Authority, the regulator of the market, suspended the firm for, among other things, having a weak balance sheet.

ReNaissance Capital continues to maintain a policy of ‘No comment to media probing’ while both Nyabadza and Mutize’s phones remain switched off.

Both men were partly responsible for ReNaissance Capital’s growth in the market, where the firm remains the second largest dealer on the Uganda Securities Exchange. The firm also attracted a huge number of clients during Safaricom’s Initial Public Offer last year.

The company’s managers at some point became the authoritative voice of investors in Uganda and in May 2008, commenting on the listing of a Africom, Rumbidzayi Nyabadza, the General Manager of Rennaissance Capital gave a glowing prospect of Africom and predicted that people could get just about a quarter of what they ordered for. Nyabadza said, those who paid for shares worth Kshs100, 000 were likely to get shares of about Kshs25, 000. The rest will be refunded.

“We are advising our clients to start making decisions on where to put their money,” he said. Nyabadza said that since the refunds will be in Kenya shilling, investors will have to make quicker decisions before the value of the currency slides.

The manner in which ReNaissance Capital Limited Uganda’s handled clients’ refunds after the IPO was oversubscribed five times over appears to have sparked off the company’s problems in recent months. Clients spent more than three months without receiving their refunds. They ended up raising complaints with the CMA.

Other clients who gave up on claiming their refunds after tortuous process have written to this writer claiming good riddance to ReNaissance.

What these clients will read into ReNaissance Capital’s management changes is anyone’s guess. It is not clear who has taken over at ReNaissance, whose headquarters are based in Zimbabwe.

In Zimbabwe ReNaissance Financial Holdings Limited is a composite investment holding company with interests spanning investment banking, insurance, and property investment.