GOVERNMENT should immediately commence investigations into the mismanagement of Access Financial Services (AFS) and Access Leasing Limited (ALL) which were liquidated by the Bank of Zambia (BoZ) despite being solvent, Brebner Changala has said.
Mr Changala has also said an inquiry should be instituted into how Nchito and Nchito Associates, who were the prosecutors of AFS and ALL directors, were also the lawyers engaged by the Bank of Zambia while at the same time providing legal services to liquidation manager Marshall Mwansompelo.
Mr Changala, a civil rights activist, said there was no doubt that Access Financial Services (AFS) and Access Leasing Limited (ALL) were mismanaged with impunity and eventually liquidated by the Bank of Zambia under the pretext that the two companies were insolvent.
He has also challenged the Bank of Zambia to state its next action against Mr Mwansompelo now that the Supreme Court has ruled the Central Bank lifted the veil off the legal profession privilege doctrine which the BoZ used to refuse to take disciplinary action against the liquidation manager because of the fear that he was going to ‘‘spill the beans’’.
Mr Changala said the mismanagement of Access Financial Services and Access Leasing Limited as per the Supreme Court judgment was aided by the Bank of Zambia and it was therefore critical that LAZ, ACC and DEC should read the judgment and investigate whether it was legally correct for one law firm to be simultaneously counsel for the bank and Mr Mwansompelo, an employee of BoZ, and prosecutors in the AFS and ALL criminal matters.
Commenting on the Supreme Court judgment in an appeal matter in which the Bank of Zambia was challenging the decision of the High Court to lift the veil of legal professional privilege which was fronted by the Nchito and Nchito Associates, the law firm that represented the Central Bank on the mismanagement of AFS and ALL, Mr Changala said it was undeniable that the two companies were mismanaged with the sole purpose of liquidating them so as to punish its shareholders.
Mr Changala said the ruling of the Supreme Court on the matter was going to have profound implications not only in the liquidation of AFS and ALL but also on the Bank of Zambia as well as the rule of law and the practice of law in Zambia generally.
He said in an interview that the legal professional privilege was a highly guarded doctrine in the legal practice meant to promote free interchanging of information between and among lawyers and their clients and it was therefore a breach of the doctrine for BoZ to attempt to stifle evidence in the mismanagement of AFS and ALL.
“The removal of the legal profession privilege as has happened with the Supreme Court is extremely rare and is only in cases of serious nature such as the liquidation of Access Financial Services and Access Leasing Limited where legal advice was being offered for an improper purpose of attempting to suppress evidence and deliberately mislead the courts of law about the mismanagement that took place at the AFS and ALL by Bank of Zambia employees,” Mr Changala said.
Mr Changala recalled one of the allegations of mismanagement of the two financial institutions presented to court by the shareholders was that money from AFS and ALL was paid to the companies’ employees to induce them to testify against the directors of the two companies in criminal trial.
He said that the Supreme Court judgment on the legal professional privilege had vindicated the shareholders in their case against BoZ’s liquidation process which saw the two financial institutions which were liquid and solvent liquidated.
Mr Changala said he was hopeful that the substantive cases in the High Court would now proceed without any hindrance.
“In the last 13 years Access Financial Services and Access Leasing Limited have been under the Bank of Zambia, a lot must have happened to make the shareholders be concerned about how a financial institution which was healthy and solvent in 2003 could have suddenly ended up a shell in 2012,” Mr Changala said.
The Supreme Court judgment is a culmination of a legal struggle by the shareholders against the Bank of Zambia’s decision to liquidate the two companies on allegations of unsafe and unsound banking practices.
In 2004, the High Court ruled in favour of the shareholders and declared that there was in fact proven facts about the solvency of AFS and ALL and there was therefore no justification by the BoZ to liquidate the two financial institutions.