PRESIDENT Emmerson Mnangagwa's recent appointment of John Mushayavanhu as Reserve Bank of Zimbabwe (RBZ) governor has been challenged, with lawyers declaring it illegal and demanding that it be reversed immediately.
Mushayavanhu succeeded his namesake John Mangudya as RBZ boss after expiry of the latter's term.
Lawyers representing Harare residents, Nesbert Munyuki and Valentine Ziko, have, however, raised a number of irregularities over Mushayavanhu's elevation, mainly centred on his 7% stake in investment company FBC Holdings.
FBC Holdings owns FBC Bank, whose focus is banking insurance, investment and mortgages.
According to Kossam Ncube and Partners, the firm representing Munyuki and Ziko, Mushayavanhu's appointment is illegal considering legal provisions, which bar any individual holding stakes in a banking institution to head the country's apex bank.
"We wish to point out to you that your appointment of Dr Mushayavanhu is afflicted with legal irregularity," reads a letter dated April 5, 2024 sent by Kossam Ncube and Partners to Mnangagwa and copied to the new RBZ boss.
"This is for the stronger reason that Dr Mushayavanhu is a shareholder of FBC Holdings Limited which wholly owns FBC Bank. He is consequently disqualified from appointment to the esteemed office of RBZ governor.
"Dr Mushayavanhu, as the governor of the RBZ is the head of the body that regulates and has total oversight of the functions of banking institutions. This entails the imposition of penalties for errant behavior on the part of banks and even suspension or revocation of their trading licences should the need arise.
"This brings to the fore the question of his objectivity in carrying out his regulatory functions in relation to FBC Bank. How is he to regulate and supervise a bank in which he has a vested and well documented financial interest?
"It goes without saying Your Excellency, that he is evidently conflicted and compromised."
Documents chronicling Mushayavanhu's consistent purchase of FBC Holdings shares on the Zimbabwe Stock Exchange (ZSE) were also attached.
Through his own company, Tirent Investments, Mushayavanhu bought 1 925 000 shares in FBC holdings on June 4, 2020.
On September 9 of the same year he bought 512, 200 more shares for ZW$5 112 000 with two more purchases recorded in June 2021.
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His shares in the institution exceed 43 768 149.
Section 16 of the RBZ Act bars the President from making an appointment similar to the one made on Mushayavanhu.
Adds the letter: "Resultantly, given the foregoing, this therefore means your appointment of Dr Mushayavanhu as RBZ governor is a nullity as it files in the face of a clear statutory prohibition. It is evidently invalid and a non-event."
Mnangagwa was given up to April 10 to reverse the appointment failure of which Kossam Ncube and Associates will take the matter to court.
"There are so many qualified and reasonably competent individuals that you can lawfully appoint as opposed to your preferred choice who is clearly conflicted and compromised," the letter says.
Consequently, we are instructed to demand as we hereby do, that you reverse the appointment of Dr Mushayavanhu as RBZ governor, within five days of this letter failing which our instructions are to institute legal proceedings against you to have the appointment of Dr Mushayavanhu set aside."
Mushayavanhu has, however, started work in earnest. On April 5, he launched Zimbabwe's Structured Currency, ZIG, at the RBZ.
