HARARE – The fate of Barclays Bank Zimbabwe (BBZ) managing director George Guvamatanga (pictured) is hanging in the balance after his company was recently taken over by Malawi First Merchant Bank (FMB).
This comes as the British bank, Barclays Plc, ended its 105-year presence in Zimbabwe by agreeing to sell its controlling stake in BBZ to the Malawi-listed lender.
Guvamatanga, who has been serving as head of the Barclays Plc subsidiary since 2008, is believed to be among the employees who had expressed interest to buy shares from the British lender and lost the bid to FMB.
The employees subsequently appealed to the High Court to block the transaction, saying it is without merit.
However, the deal — which is waiting regulatory approval and could be concluded by September this year — is as good as done after the central bank said it will not bow down to pressure from Zanu PF and other campaigners seeking to have the sale of BBZ reversed.
This was after politicians and the Affirmative Action Group had joined BBZ workers in calling for the transaction to be reversed as it did not conform to the country’s controversial empowerment laws.
“As the central bank we do not interfere on the sale of shares, we are just a regulator,” Reserve Bank of Zimbabwe governor John Mangudya said last week, adding that the transaction was also in line with the country’s indigenisation policy, which requires that foreign-owned companies own no more than 49 percent in local firms.
According to the deal, which was hammered out by a team of lawyers, including London’s Norton Rose and Addington Chinake of Kantor & Immerman, FMB will hold a 42 percent stake, BBZ employees 10 percent, Barclays 10 percent until 2020 and other sitting shareholders will retain their 33 percent.
Economic experts said it was only a matter of time before Guvamatanga and some top officials are shown the exit door by the new shareholders, despite assurances from the British lender that all 700 BBZ employees will be incorporated into FMB.
“Every employee knows that mergers tend to mean job losses,” said human resources expert Sarah Ndlovu.
“Most companies generally consider all the money saved from reducing the number of staff members from accounting, marketing and other departments. Job cuts in some cases may also include the former top manager, who typically leaves with a compensation package,” she added.
Other experts said Guvamatanga’s decision to challenge the acquisition has already put him at loggerheads with the new shareholders.
“I don’t foresee a situation where George continues as the managing director. The best thing for him is to resign before he gets fired,” said a person familiar with mergers and acquisitions.
“If the deal goes through, which is now a matter of when rather than if, FMB shareholders would not be comfortable working with George after what has happened and they are likely to bring their own person or look for someone else within Barclays Zimbabwe,” the source added.
Already, some middle managers are angling for Guvamatanga’s position after distancing themselves from a group of employees who are resisting the acquisition.
Barclays National Workers Committee chairperson Tawanda Mutemi said 559 non-managerial employees “fully support the takeover of Barclays by FMB and we are not involved in any lobbying to the government”.
“You may be aware from other sources that a small group of managers is the one that is lobbying the government and other authorities in pursuit of their own interests. It is their democratic right to do so but it is distressing to the rest of the employees to be blanketed in their cause,” he said.
However, it would be sad for FMB to release the affable long-serving executive who boasts of over 25 years’ banking experience.
Guvamatanga has managed to post profits consistently since dollarisation in 2009 and BBZ is one of the most stable financial institutions in the country with a low nonperforming loans level.
BBZ, which has $476 million of total assets, made $10,9 million net profit last year.