Financial Services Appeals Committee, an arm of the Ministry of Finance that handles financial grievances, on Wednesday dismissed an appeal by business mogul Thomson Mpinganjira who was ordered by Reserve Bank of Malawi (RBM) to dispose of shares in FDH Financial Holding.
RBM, a registrar of financial institutions, made the decision due to a bribery case in October last year which Mpinganjira was answering and was subsequently convicted and sentenced to nine years imprisonment.
Mpinganjira, represented by lawyers Khumbo Soko and Hilda Nicole Soko, filed the appeal to argue why he should not be forced to dispose of his shares in FDH.
In an interview, Khumbo Soko said his clients in the matter have filed an appeal in the High Court and obtained a stay order, effectively putting aside the decision by the committee.
This means Mpinganjira, who filed the case to the committee alongside Peter Frank Mpinganjira, Nathan Mpinganjira, William Mpinganjira, Annabel Chikondi Mpinganjira and M Development Limited, would not be forced to dispose of his shares in FDH until the High Court decides on the matter.
Arguing their case before the committee presided over by Justice Isaac Mtambo, retired, and RBM as respondent, Mpinganjira and the rest argued that RBM erred in law in placing unlawful and unreasonable limitations on the rights of Thomson Mpinganjira and Peter Frank Mpinganjira.
They further stated the registrar of financial institutions also erred in law in deciding that Nathan Mpinganjira, William Mpinganjira and Annabel Mpinganjira were not fit and proper to hold shares in M Development Limited. M Development is a company with shares in FDH.
“The respondent erred in law when he considered irrelevant considerations in deciding whether [Nathan Mpinganjira, William Mpinganjira and Annabel Mpinganjira] were fit and proper persons to hold shares in [M Development Limited], namely,that the said applicants are related by blood to [Thomson Mpinganjira],” they argued.
They argued RBM did not also give legally justifiable reasons for M Development Limited to dispose of its shares in FDH, adding it treated Thomson Mpinganjira and M Development Limited as one person.
But in deciding the matter, the committee observed that it was clear that Thomson Mpinganjira was the sole controlling shareholder in M Development Limited and that M Development Limited was also a controlling shareholder in FDH.
Justice Mtambo said the fact that Mpinganjira had exited from M Development Limited, it was clear that he needed to be replaced in M Development Limited. He said this did not happen despite RBM asking him repeatedly to do so.
“While we accept that [Thomson Mpinganjira and M Development Limited] are separate and distinct entities in law, we wonder how to separate them on the facts before us which clearly that [M Development Limited] would in practice and reality be non-existent without [Thomson Mpinganjira]” Mtambo said.
The judge said what was needed was to quickly replace Mpinganjira with fit and proper controlling shareholder(s).
The committee went on to dismiss the case with costs, forcing lawyers for the Mpinganjiras to file an appeal at the High Court and obtained the stay order on Friday that effectively put aside the decision of the committee. Mpinganjira was convicted for attempting to bribe five High Court judges presiding over the 2019 presidential nullification election case.