The High Court of Malawi Commercial Division has reversed a decision by the Financial Services Appeal Committee ordering business mogul Thomson Mpinganjira to dispose of his shares in FDH Financial Holdings Limited.
He lodged an appeal in the High Court after the committee, an arm of the Ministry of Finance and Economic Affairs that handles financial grievances, had dismissed his appeal against a Reserve Bank of Malawi (RBM) order for him to dispose of his shares in the firm.
RBM, as registrar of financial institutions, made the decision in light of Mpinganjira’s conviction in October 2021 for bribery. The High Court convicted and sentenced him to nine years imprisonment, but is currently out on bail pending appeal.
Mpinganjira filed the appeal alongside Peter Frank Mpinganjira, Nathan Mpinganjira, William Mpinganjira, Annabel Chikondi Mpinganjira and M Development Limited.
In a judgement dated December 9 2022 which The Nation has seen, Judge Ken Manda observed that the respondent, the registrar of financial institutions, made some bizarre and unreasonable decisions, some of which, by the registrar’s own admission, did not have any basis in law.
He said the litigation both in the High Court and before the appeals committee would have been avoided if the registrar acted with sobriety, competence, reasonableness and humility expected of a public officer.
Said Manda in the Civil Appeal case Number 1 of 2022: “He [the registrar] has been heavy handed in the manner in which he has conducted himself towards the appellants.
“One tends to wonder whether there is something more underlying than what meets the eye. However, this is perhaps not the matter for me to delve into at this point.”
In an interview yesterday, Khumbo Soko, one of the lawyers representing Mpinganjira, expressed satisfaction with the outcome.
He said: “The judgement reverses the decision of the Financial Services Appeals Committee and by extension that of the registrar of financial institutions.
“It means that our clients can proceed with their intended share transfers subject of course to lawful scrutiny by the registrar. So, generally we are happy with the outcome.”
On the other hand, Senior Counsel Modecai Msisha, who represented RBM, said yesterday he had not yet studied the judgement.
He said: “For full appreciation of issues, it is important for anyone interested to look at full copies of the decision of the appeals committee and the skeleton arguments of both sides in the High Court.
“After I review the judgement and subject to what client may advise in respect of their right to appeal, I may or may not be able to comment on the judgement.”
Mpinganjira and the others had argued before the committee presided over by Judge Michael Mtambo (now retired) and RBM as respondent that RBM erred in law in placing “unlawful and unreasonable limitations” on the rights of Thomson Mpinganjira and Peter Frank Mpinganjira.
They further submitted that 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 Financial Holdings Limited, the parent company of listed FDH Bank.
“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 further contended that 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.
In deciding the matter, Manda said the respondent erred in law in placing “unlawful and unreasonable limitations” on the rights of Thomson Mpinganjira and Peter Mpinganjira to deal and transact in the shares that they hold in M Development Limited as they are at liberty to so deal with their shares as they deem fit.
Manda has since ordered RBM to foot the costs of the case.
