In a latest case of new owners stamping their authority at the previously wholly State-owned Malawi Savings Bank (MSB), FDH Financial Holdings Limited has sent on leave MSB chief executive officer (CEO) Ian Bonongwe and stopped management from making decisions.
Bonongwe and deputy head of corporate banking services Mervis Mangulenje, who have been asked to proceed on leave to exhaust their outstanding leave days, have joined deputy CEO Kayisi Sadala and treasury manager Million Hera, who went on leave last week.
In the meantime, head of corporate banking services Ted Chanza has been appointed acting CEO and business development manager Mercy Manthanga has stepped into Chanza’s shoes, according to internal communication The Nation has seen.
The communication says Bonongwe has taken his 30 leave days and is expected back in office on September 4 2015 while Mangulenje was asked to take her 39 outstanding days and is expected in the office on September 11 2015.
Ironically, Chanza, the acting CEO, has 60 accumulated leave days, according to sources who confided in The Nation yesterday.
In a telephone interview yesterday, the soft-spoken Bonongwe confirmed that he was on leave, but dispelled suggestions that he was forced to go on leave.
He said: “No, I have not been sent on forced leave. What I have done is to take my leave days because I needed a break. In fact, I discussed my leave with the new investors.”
Asked the implications of top managers at the bank going on leave at the same time, Bonongwe said he did not want to comment on that, but did say that their absence would also help the investor undertake a comprehensive review of the company.
Sending the managers on leave might not be a total surprise as FDH Financial Holdings Limited on July 21 2015 stopped MSB management from making decisions on the bank.
Reads in part a letter to Bonongwe signed by FDH Financial Holdings CEO Thomson Mpinganjira: “Further to the meeting we had with MSB management team and subsequent meeting with general staff based in Blantyre, I would like to formally advise and reiterate that activities, whether previously approved or not, are suspended forthwith.
“Any activities or expenditure going forward must be approved through my office or person delegated at FDH Financial Holdings Limited.”
Commenting on the developments at MSB after the takeover, a financial market analyst said banking is a sensitive business and advised FDH Financial Holdings to tread carefully when undertaking certain decisions.
Said the analyst: “They [FDH Financial Holdings] need a strong human resources person to advise them so that they do not have a lot of cases at the Industrial Relations Court. In the interim, I can foresee a lot of them.”
Earlier this month, Mpinganjira advised employees at FDH Financial Holdings Limited that the two banks will operate separately pending approvals from the Reserve Bank of Malawi (RBM).
On other managers that were asked to go on leave, Mpinganjira said there was nothing wrong with managers going on leave. He said there are always other people to take over the positions.
He said: “Mr Bonongwe has more leave days, but he has decided to take 30 days only. People are supposed to go on leave and as always, somebody will take their positions.”
Mpinganjira said it was true that Bonongwe applied for holiday and that Chanza was acting because the deputy CEO Sadala was also on leave.
He said Chanza has been appointed as acting CEO while Bonongwe and Sadala are on leave.
Mpinganjira said getting people on leave was normal and good practice for staff to go on leave saying it was mandatory under law for people to go on annual leave.
On what message is being sent to customers with top managers going on leave, Mpinganjira said: “When people go on leave, it is normal practice for them to hand over their duties to other people who will act on their behalf. There is no message being sent to the customers since this is standard in any organisation.”
On suspension of management activities and expenditure by MSB management, Mpinganjira said FDH as a holding company, has the right to make decisions relating to any of the subsidiaries it owns, including MSB in the interest of its business.
“Following the acquisition of MSB, FDH Financial Holdings Limited is currently in the process of integrating MSB with FDH Bank Limited and part of this process requires that we review how business is conducted and how decisions are and will be made at MSB as well as at FDH Bank Limited,” he said.
RBM spokesperson Mbane Ngwira said the central bank was waiting for a detailed plan from FDH Financial Holdings on how the two banks will be run.
There has been acrimonious battle surrounding the disposal of MSB with opposition politicians and civil society organisations questioning the process that government followed to dispose of its stake in the bank.
MSB was eventually sold at K9.5 billion a day after Parliament had asked government not to sale the bank. Government had refused to recapitalise MSB following its failure to meet Basel II requirements.
FDH Financial Holdings officially took over 75 percent stake in MSB on July 1.