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Malawi’s Old Mutual accused of ‘corporate sabotage’ over FDH shares

Old Mutual Investment Group

BLANTYRE-(MaraviPost)-Old Mutual Investment Group has been accused of ‘corporate sabotage’ over the sale of FDH Bank shares after it released a report telling its pensioners not to purchase the shares even though Old Mutual holds shareholding in FDH Bank.

One of the Old Mutual pensioners said Old Mutual released an analysis of the FDH Bank Initial Public Offering (IPO) of the shares on 9th July 2020 where it advised against the purchase of the shares through IPO at K10 per share saying the price is ‘significantly’ over-valued.

Old Mutual again released another report on Thursday 16th July 2020, just a day before the close of IPO which again advised against buying the shares.

Old Mutual Investment Group offices

The livid pensioner who shared the two reports with us said he noticed that in the first report, Old Mutual ‘conveniently’ forgot to declare its interest as a shareholder of FDH Bank but did so in the second report released on 16th July 2020 including that they are currently involved in discussions to increase their holding in FDH Bank.

A perusal of the two reports indeed indicate that the second report, Old Mutual inserted a section on declaration of interest which was missing in the first report.

“ 1.0 DECLARATION OF INTEREST Section 2.0, paragraph 6 of FDH Bank Prospectus under shareholders and related companies stipulates “Prospective investors are advised of ongoing discussions between MDL and Old Mutual group of a possible transaction involving part of MDL’s shares in FDHFHL by Old Mutual group and the timing of the outcome of these discussions is presently unknown. Notwithstanding the above, this IPO analysis has been conducted independently of that,” reads the section.

In the two reports Old Mutual advice to pensioners is that they should not purchase the shares through IPO at MK10 per share but after IPO at K6 per share.

“In our opinion, at the offered price of MK10.00/share, the business is significantly

over-valued as it represents 40% downside potential from our valuation of MK6.00/share. In view of the significant downward potential, we recommend that the Fund participates post-IPO process at the price supported by the fundamentals,” reads the report in part.

But some members of the Pension Fund view this as a ‘corporate sabotage’.

“First Old Mutual forgot to declare their conflict of interest in this issue since they are also shareholders in FDH Bank and are also trying to increase their shareholding in the bank. Then they recommend that we should not buy the shares at MK10 during the IPO but at MK6 after the IPO. What is surprising is that even at MK10 members of the public and other investors are buying the shares. I am sure they wanted this IPO to flop so that they buy the shares at a cheaper price and be the majority shareholders of FDH Bank, this is pure corporate sabotage,” he said.

Another member of the Pension Fund also expressed the same views saying Old Mutual was not sincere in their analysis and recommendations.

“Other investment managers have recommended that this is a good investment opportunity but Old Mutual which is a shareholder and interested party is telling us not to buy the shares, that is a bit odd and does not make sense. I think Old Mutual wants to benefit more than anyone else. This is pure greed,” she said.

Old Mutual spokesperson Patience Chatsika could not be reached for a comment as her phones went unanswered so too FDH Bank Public Relations Officer Lorraine Lusinje whose phones were out of reach.

FDH Bank Plc announced plans to list on the MSE on 3rd August 2020 and is offering up 20% of its shares to the public. The offer commenced on 29th June 2020 and will close at 17:00 on 17th July 2020. 

The Bank is offering 1,380,206,250 shares at MK10 per share to raise MK13,802,062,500. Part of the IPO is for a subscription of new shares (401,031,250) and the other part is for sell of exiting shares (979,175,000).

Ufulu means 'Freedom' or unschackled - Ufulu is a reporter at the Maravi Post since Inception. He has a Degree in Computer Science and has reported on Technical and development issues.


  1. The problem with FDH is that it was being used by politicians to siphon money from the government and the change of government will greatly affect its operations. Believe me not very soon the government will stop transacting with FDH and it may find itself penalised for being used as a conduit for stealing public money. During the campaign period the FDH Branch in Zomba was handing out money to vendors and beneficiaries from surrounding places from MEDF illegaly. Despite the voucher indicating a figure of MK300,000.00 in actual sense they were getting anything between Mk20,000.00 to MK100,000.00 which means that the bank connived with MEDF officers to steal the funds meant for the poor. I hope Tonse alliance government is not sleeping on the job and they will take both MEDF officers and FHD bank to task. In my considered view the FHD bank shares are toxic and not worth investing in.

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