International Investor Money Is Not Safe in Zambia: Regulator Extinguished Foreign Bank’s Shareholding Under a Power It Did Not Yet Possess

Amsterdam & Partners LLP, international counsel to BONI, (“Bank of New Innovation Limited”) today warned that the treatment of its client by Zambia’s banking regulator should concern every investor, fund manager, and compliance officer considering placing capital in the country — and every exchange that aspires to be taken seriously by the international financial community.

BONI purchased a substantial shareholding in Investrust Bank Plc on the Lusaka Securities Exchange (“LuSE”), through Pangea Securities, a regulated and licensed Zambian broker, with funds imported through Standard Chartered Bank as required by Zambian foreign exchange law.

BONI did everything Zambia asked of a foreign investor — transparently, lawfully, and through every proper channel.

What followed was a systematic destruction of that investment by regulatory conduct that was irregular at every stage.

BONI was never permitted to take the Board seat its 24.8% stake entitled it to. In January 2023, the Bank of Zambia (“BOZ”) wrote to BONI formally stating that it did not recognise BONI as a shareholder at all. Then, in April 2024, BOZ took possession of Investrust, transferred its assets to a state-linked bank, and extinguished the very shareholding it had refused to recognise — without notice, without a hearing, and without compensation. A regulator cannot deny a party is a shareholder and then extinguish that party’s shareholding in a liquidation. That’s insolvency 101. Both positions cannot simultaneously be true.

The regulatory process that preceded this outcome was itself built on a power BOZ did not yet legally possess. BOZ assessed BONI against “fit and proper” requirements under section 41(1) of the Banking and Financial Services Act that were not formally prescribed until December 2023 — more than a year after the assessment process had commenced and two years after BONI acquired its shares. Without prescribed requirements, there is nothing to assess against. BOZ was exercising a statutory power that did not yet exist in law.

When BONI invoked its statutory right of appeal, the Minister of Finance was under a mandatory legal duty to constitute an Appeals Tribunal within thirty days. No tribunal was ever constituted. Left without the remedy Parliament had expressly created, BONI turned to the High Court of Zambia, where BOZ twice attempted to have the case dismissed rather than defend its conduct on the merits. Both attempts failed. Costs were awarded to BONI on each occasion.

Robert Amsterdam, Founder and Managing Partner of Amsterdam & Partners LLP, states:

“Our client did everything a foreign investor is asked to do. It bought listed shares on a regulated exchange, through a licensed Zambian broker, disclosed the acquisition publicly, and imported its funds through the proper banking channel. It was then assessed against a regulatory standard that did not yet exist in law, told it was not a shareholder, denied the Board seat its stake entitled it to, and finally stripped of the shareholding it had supposedly never held. The Bank of Zambia cannot have it both ways.”

“This is soft expropriation. It requires no decree and no soldiers at the door. An investment is destroyed instead by regulatory paralysis, by a framework constructed after the fact, and by an appeal tribunal that is never constituted. The result is confiscation. Only the paperwork is different.”

“The Lusaka Securities Exchange aspires to partner with the London Stock Exchange and to attract dual listings from international companies. Before any such partnership is contemplated, it should be required to answer a basic question: can it guarantee that a share bought on its market is actually owned by the buyer or is LuSE selling derivative instruments that may or may not one day entitle the buyer to ownership of the share? If a licensed, transparent, fully compliant institutional investor can have its shareholding extinguished in this manner, the answer to that question is not yet yes.”

“We call on the Bank of Zambia and the Lusaka Securities Exchange to come to the table and resolve this matter. Zambia and Africa are open for business — that is a narrative worth protecting, and worth fighting for. But it cannot be sustained while cases like this remain unresolved and unacknowledged. BONI is asking for a fair outcome from institutions that have the power and the responsibility to provide one. Every day this continues is a day that narrative is undermined.”

BONI’s independent financial advisors, Basse-Pointe Advisors, have assessed the opportunity cost loss arising from BOZ’s conduct at not less than USD 109,500,000. BONI is pursuing a specific and conservative claim of USD 40,000,000 — less than 37 cents on the dollar of assessed loss — reflecting its preference for resolution over protracted litigation.

Both legal proceedings and a parallel commercial engagement track are active. The door to dialogue remains open.

ABOUT AMSTERDAM & PARTNERS LLP

Amsterdam & Partners LLP is an international law firm specialised in political advocacy, international arbitration, and human rights. The firm represents governments, corporations, and individuals in complex cross-border disputes and regulatory matters. For further information, please visit www.amsterdamandpartners.com.

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Egor Lukanov

Communications Counsel

Amsterdam and Partners

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