JOSEPH Kanyekanye’s resignation as chairman of the boards of Capital Bank and Rainbow Tourism Group (RTG) could be a microcosm of intense board wrangles rattling both institutions in which the National Social Security Authority (NSSA) is a controlling shareholder.
Kanyekanye threw in the towel as chairman on Tuesday after occupying the position at Capital Bank and RTG from March 2012 and July 2012 respectively. He will remain as non-executive director of both companies.
While Kanyekanye says his resignation from the chairmanship both institutions was in compliance with a NSSA board resolution to have independent chairpersons in all its investments, sources said there was more to it than meets the eye.Insiders at RTG and Capital Bank said Kanyekanye’s leadership style had caused ructions among shareholders and the directors who represent their interests.
They said despite being a non-executive chairperson at both institutions, Kanyekanye had conducted himself as if he was in the executive chair.
But on Tuesday, Kanyekanye said the move was the first step towards reducing the number of boards that he has been serving from 10 to less than five.
“I seat on the board of NSSA and NSSA is a shareholder in both companies,” he said. “That puts me in a very precarious position of having to take sides in the case NSSA has a disagreement with RTG. This (resignation) is done to comply with a resolution I fully supported that we made at NSSA to have independent chairpersons in all NSSA investments. If you look at my CV, I go to companies that are distressed and turn them around,” added Kanyekanye.
Kanyekanye, however, said boardroom politics was behind allegations that he and his wife had irregularly accessed over US$410 000 in loans from Capital Bank.
In April this year, he was suspended from the bank’s board to pave way for investigations into alleged corporate governance violations and abuse of power.
He returned on June 6.
In his notice to step down as chairman of Capital Bank, he indicated that the investigation by chartered accountants, BDO Kudenga, had absolved him of any wrong-doing.
While calling it a day as the chairperson of Capital Bank, he had a word of advice for the incoming chairperson, Onisai Machiridza.
He said the incoming chair should immediately restore professionalism in the Capital Bank board and ensure it retained its independence.
“The politicking that arose from my leave of absence before being asked to come back after the BDO investigation as chairperson on June 6, 2013 requires attention,” Kanyekanye said in the letter, which also exposed how Capital Bank’s management had awarded themselves unauthorised salaries.
He also expressed reservations about the independence of Capital Bank’s board, but only emphasised the need for members not to tolerate interference.
Kanyekanye was not at liberty to elaborate on the issue at a Press conference on Tuesday.
“The immediate imperatives for the bank is to push for a board approved turnaround strategy, recapitalisation and deal with incorrect implementation of the total costs remuneration that resulted in managerial staff paying themselves unauthorised salaries while restoring independence of the board,” he said.
Despite the glamour associated with the high fliers in the corporate world, the developments at RTG and Capital Bank help expose the rough side of corporate politics.
Both institutions have for a long time been rattled by intense shareholder squabbles.
For instance, RTG has witnessed endless shareholder disputes seesawing between British tycoon Nicholas van Hoogstraten, NSSA, and other shareholders fighting to stamp their authority in the listed hospital group.
John Chikura, the chief executive officer of the Deposit Protection Corporation and a corporate governance fundi succeeds Kanyekanye at RTG.
Capital Bank, the former ReNaissance Merchant Bank, has been another station of intense turf wars among shareholders.
Following the exit of Patterson Timba and his team from the bank, NSSA, which is now calling the shots at Capital Bank, has been trying to clear some of the historical issues that continue to frustrate the bank’s turnaround.
Kanyekanye was dispatched to the two firms last year to represent the interests of the pay-as-you-go pension scheme.
But while executing his duties as chairperson, he had to be suspended briefly at Capital Bank. RTG also had its fair share of squabbles.
Kanyekanye on Tuesday said he was stepping down as chairman a satisfied man after extinguishing shareholder squabbles at the Zimbabwe Stock Exchange-listed hotel group, and sorting out corporate governance issues at Capital Bank, which slid into curatorship in 2011 after a central bank investigation exposed massive abuse of depositors’ funds due to high concentration of power in one shareholder.
A chief executive officer at Allied Timbers Zimbabwe, a government-owned institution, Kanyekanye shot to public limelight when he assumed the chairmanship of the Confederation of Zimbabwe Industries (CZ1) — the largest industrial representative body in the country.
While at CZI, his presidency caused disquiet disapprovals within the confederation as some of its members felt that the forester was pandering to the whims of the ZANU-PF side of the inclusive government instead of being non-partisan.
His directorship at NSSA, a government-run institution, opened doors for him, resulting in his appointment at RTG, Capital Bank and starafricacorporation.
He is also a special interest councillor for City of Harare.
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