Business / Companies
Trust Bank liquidation postponed
23 Jan 2014 at 07:34hrs | Views
Zimbabwe's High Court has postponed Trust Bank (Trust)'s liquidation process to February 18 following a successful challenge by the financial institution's lawyers.
The reprieve came as the Deposit Protection Corporation had announced plans to begin liquidation processes at the institution.
Trust's licence was cancelled last month after the central bank said it was abusing depositors' funds and its capital position was deteriorating.
At yesterday's liquidation court hearing at the High Court, Advocate Thabani Mpofu representing the bank chiefly argued that depositors are unlikely to support outright closure of the institution hence it must be given a chance to engage investors for fresh capital injection.
While the Reserve Bank of Zimbabwe says Trust was undercapitalised - with a core capital of $1.9 million against the central bank's minimum threshold of $75 million by December 2013 - it has been in tentative discussions with a South African investor, Mining Oil and Gas Service (Mogs), which was willing to inject $20 million into the institution.
The injection is dependent on the company getting approval from government to build a second fuel pipeline from Beira to Msasa in an investment worth close to $1 billion.
The reprieve came as the Deposit Protection Corporation had announced plans to begin liquidation processes at the institution.
Trust's licence was cancelled last month after the central bank said it was abusing depositors' funds and its capital position was deteriorating.
While the Reserve Bank of Zimbabwe says Trust was undercapitalised - with a core capital of $1.9 million against the central bank's minimum threshold of $75 million by December 2013 - it has been in tentative discussions with a South African investor, Mining Oil and Gas Service (Mogs), which was willing to inject $20 million into the institution.
The injection is dependent on the company getting approval from government to build a second fuel pipeline from Beira to Msasa in an investment worth close to $1 billion.
Source - dailynews
