Interfin Holdings Limited says it has made a provision of $750 000 to cover liabilities and retrenchment costs arising from its merger with CFX Financial Services Limited sealed in April.
The two banking institutions agreed to merge after Interfin’s underwriter remains from a grossly under-subscribed rights issue constituted about 51% of CFX’s issued share capital.
The deal reached financial closure while CFX was still to finalise a planned retrenchment of an estimated 61 employees, some of whom are now contesting the corporate marriage, complicating the post-merger consolidation.
Raymond Njanike, Interfin managing director, said former CFX employees who could not be co-opted by the merged entity would receive severance packages from the $750 000 purse, which would also be used to cover other outstanding legitimate CFX liabilities.
“We have set aside a provision of $750 000 to cater for liquidations, including retrenchments. We are going to pay retrenchment packages,” Njanike said.
“What we have not agreed to is the quantum of the retrenchment packages. The workers are claiming more than what they are worth.”
Interfin has proposed a severance package that includes three months’ basic salary and a notice pay equivalent to three months’ basic salary, among other benefits.
Through their lawyer, the discontented employees wrote to the Reserve Bank of Zimbabwe, the Competition and Tariff Commission and the Ministry of Finance, asking the three regulatory authorities to reverse the merger until the outstanding labour dispute is resolved.
Njanike said the fiscal authorities dismissed the interdiction arguing that labour issues should be referred to the labour court.
He added that workers had no say in the acquisition or disposal of bank assets.
“It’s shareholders who must agree on such. If there was a shareholder who had said the merger was flawed, it would have been put on hold.
“The sale of CFX’s banking assets to Interfin was approved by shareholders on the CFX side, while the purchase of the assets on the Interfin side was also approved by shareholders. The process was above board.
“We got the blessing of the central bank anyway.”