“Do you see a man diligent and skilful in his business? He will stand before kings; he will not stand before obscure men. — Proverbs 22:29.”
The word of encouragement sits confidently on Kingdom Bank founder Nigel Chanakira’s biography as one of his favourite scriptures. Chanakira, an unabashed Pentecostal, who often refers to demons and spirits, founded Kingdom Bank from a small operation and helped it grow into a leading indigenous financial services group.
Kingdom was at one time regarded as one of the few indigenous success stories in the local banking sector, stable and trusted. Chanakira’s remarkable, and at one time seemingly unstoppable career, saw him collecting 17 local and international business awards as his empire grew in impressive fashion, attracting envious eyes from investors.
Sadly, in an unexpected anti-climax, Chanakira seems to have lost his footing; the once revered banker is on the verge of standing before “obscure men.”
Ambitious, highly skilled and determined Chanakira, a holder of a BSc (Hon) Economics and MSc (Hon) Economics degrees from the University of Zimbabwe, formed Kingdom in 1994 with four business partners.
His ambitions were grand, with the stated goal of having his empire traded on Wall Street.
Speaking at a function organised by Wealthy Word International, Chanakira was quoted as having said when he started Kingdom, he was the chief executive officer, the manager, accountant and cleaner since he had no other employees.
One of the major highlights in Chanakira’s career and in the growth of his empire was in 1999 when Kingdom successfully merged with the Discount Company of Zimbabwe (DCZ).As a result of the merger, Kingdom secured its listing on the Zimbabwe Stock Exchange.
Chanakira’s next significant move was his acquisition of a stake in a foreign exchange bureau.
During his tenure at the helm, Kingdom was twice voted the Top Company on the Zimbabwe Stock Exchange in 2001 and 2007. In 2007 Chanakira was appointed Director of the Year by the Zimbabwe Institute of Directors.
In 2001 and 2008, a United States-based company, Success Motivation, named Chanakira as their Client of the Year.
The World Economic Forum named him as a 2001 global leader and in 2006 Kingdom was named as the Best Turnaround Zimbabwe Stock Exchange company.
Kingdom began expanding its operations into the region before striking a major deal and merging with Meikles Limited in 2007, creating one of largest companies in the country – Kingdom Meikles.
The union, however, only lasted two years after a protracted shareholding dispute with the majority shareholders.
Chanakira resigned as chief executive officer of Kingdom Meikles in 2009 after a fallout with Meikles chairman John Moxon. After a vicious dispute, Chanakira, in 2011, managed to successfully de-emerge Kingdom from the Kingdom Meikles group.
Fall from grace
The Kingdom merger with John Moxon’s Meikles Africa proved to be Chanakira’s undoing.
Kingdom Meikles Africa Ltd (KMAL) chairman John Moxon rejected claims by Nigel Chanakira that he was entitled to 51 percent of the company in indigenisation option rights and called the banker delusional.
A few months after KFHL merged with Meikles Africa Ltd, Moxon called for an extraordinary general meeting to have Chanakira and two other non-executive directors removed from the board. According to Moxon, Chanakira reneged on a plan to refinance the group’s prestigious Cape Grace Hotel located in Cape Town and it became the last straw to an already strained business relationship. Moxon had enough voting power to get rid of Chanakira.
Chanakira, sensing danger, ran to political heavyweights for protection. Moxon backed down.
Last year reports suggested that Chanakira was probed by Reserve Bank of Zimbabwe amid allegations he could have abused depositors’ funds amounting to US$3 million, a deal which, close sources say, led to his demise in the financial sector. In still unclear circumstances, it is alleged that Chanakira withheld money belonging to a depositor arguing that it was being held in security. The money is alleged to have been invested elsewhere by Chanakira. The reports moved quickly through the financial sector, creating doubts around Kingdom’s reliability as a financial partner.
Commenting on the allegations Chanakira said “Ordinarily, I would not comment on what essentially is a bank-client transaction that is subject to normal confidentiality clauses.”
He went on to point out that he would not respond to any questions on the matter and that AfriAsia should instead respond.
Insiders at Kingdom said Chanakira enjoyed protection from the former central bank chief Dr Gideon Gono.When Gono was asked if he was protecting Chanakira, he said: “I am governor of the entire financial sector, who stands by all its shareholders, boards, management and staff. Anyone suggesting that I am closer to one institution than the other does not quite know how the central bank or the governor functions.
“One thing for sure is that I will not comment on individual shareholders or management unless it’s absolutely necessary. And I don’t see the necessity to do so in this case.”
Under the merger, John Moxon, through various investment vehicles controlled 43 percent of voting shares with companies linked to Chanakira controlling a 25 percent of the shares leading to differences of opinion on how to direct the company. Chanakira, accustomed to calling the shots, found himself taking instructions.
The de-merger was concluded with accusations that Chanakira had roped in the help of political heavies, accusations that dented his relatively clean image as a reliable businessman.
Last year Chanakira finally gave up his 30 percent shareholding in Kingdom to Mauritius-based AfrAsia Holdings in a cash equity deal. He left the bank that he founded and was associated with for 19 years, citing non-performance by the institution as the reason for ceding his shares.
It is widely believed that he was muscled out of the bank. Market watchers had for a long time speculated that Chanakira would be forced out of the group after Kingdom Bank was forced to write off a US$21 million non-performing loan extended to a struggling telecommunications firm. Managers at the troubled bank accused Chanakira of undermining internal procedures, directing that loans be granted to friends and church members.
Disputing allegations that he was muscled out of his bank, Chanakira said he had left of his own accord and was planning to venture into other lines of business that included software development.
“Next year we are launching an application that gives financial literacy to people,” Chanakira was quoted saying.
Having started Kingdom with Z$120 000, he sold his shares in the bank for US$12,5 million, with US$2,5 million cash and the remainder as non-performing loans. From running one of the most promising financial services organisations in the country and travelling in private jets, life has indeed gone a full circle.
- Additional reporting by Kudakwashe Mutandi
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