Nchito’s U$4.2 m consent agreement faulty?

THE consent order between Finance Bank and Zambian Airways shareholders, Fred M’membe and Mutembo Nchito, over the latter’s settlement of US$ 4.2 million could have been entered into in breach of the Banking and Financial Services Act because of the non-involvement of the Bank of Zambia, it has been learnt.

The Daily Nation is awaiting a response from the Bank of Zambia on whether Finance Bank acted within the banking laws when it disbursed the US$ 4.2 million to Mr Nchito and Mr M’membe and later entered into a consent agreement to settle the matter outside court.

Bank of Zambia spokesperson Kanguya Mayondi yesterday acknowledged receipt of this newspaper’s query and assured that it was being attended to by an appropriate department.

The Daily Nation has however learnt that the disbursement of large loans such as the one Nchito and M’membe obtained needed the Bank of Zambia’s consent as the funds involved could have been depositors’ money.

The mystery has deepened over the consent order which Nchito and M’membe signed with Finance Bank for the settlement of US$ 4.2 million debt they owed the bank.

A search at the Lusaka High Court did not locate the terms under which the consent order was signed.

The order authorised by High Court Judge Nigel Mutuna on November 28, 2012, indicated that there were terms guiding the decision by which the bank withdrew the matter from court.

“The parties having agreed terms of settlement and consenting to an order being drawn up in such terms as hereinafter provided; by consent, it is ordered that this matter be discontinued,” reads the consent order.


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