News / National
RBZ placed bank under curatorship to avoid repaying $9.4 million loan
13 Oct 2011 at 04:51hrs | Views
RENAISSANCE Financial Holdings Limited shareholder Mr Patterson Timba says the Reserve Bank of Zimbabwe placed his bank under curatorship to avoid repaying a $9,4 million loan.
The accusation is contained in a High Court application filed by Mr Timba's lawyers on Tuesday.
The court papers show that the central bank owes Renaissance Merchant Bank $8,4 million, while Lunar Chickens is indebted to the tune of $1 million.
Lunar Chickens is believed to be owned by RBZ Governor Dr Gideon Gono.
The $8,4 million was borrowed by the central bank between 2009 and 2010 and was for statutory reserves, Diaspora money and gold bonds.
When contacted for comment last night, Dr Gono said: "Since the RBZ is cited as a respondent, it would be out of order to comment outside court proceedings. The beauty is that the law is very clear as to what should be done and provides relief to injured parties. So, we must wait for that process.
"As for the accusation about a company I am associated with, again, I am not its spokesperson though I am aware that the applicant is stretching credibility to interestingly breaking levels. Let the relevant parties meet in court. Suffice to say though that indigenisation must never be regarded as a euphemism for indiscipline, corruption and tolerance of bad corporate governance.
"The curator and board of Rennaissance issued separate statements yesterday dismissing the allegations. Now he is fighting NSSA who actually want to come in and help his bank. It's funny," said Dr Gono.
The boards for Renaissance Financial Holdings Limited and Renaissance Merchant Bank yesterday published a statement dismissing allegations of misconduct by the RBZ and Mr Saruchera. They were responding to Press reports that Mr Saruchera wanted to clandestinely sell RMB.
"We would like to thank the Governor of the RBZ and his team for their support in our efforts to resolve the crisis at RMB," the boards said in a joint statement.
"We also take this opportunity to thank the curator and his team for the work done to date to resuscitate RMB and protect the interests of depositors, curators and RMB itself."
Mr Saruchera also issued a statement yesterday saying he was making efforts to resuscitate the bank.
"I have secured the 33 percent shareholding that RFHL has in Africa First Renaissance Corporation Limited (AFRE) and invited NSSA to invest in RMB," he said.
"NSSA has responded positively to the proposals and negotiations regarding same are progressing well."
RBZ lawyer Mr Tawanda Chitapi of TH Chitapi and Associates yesterday confirmed he was the one handling RBZ legal cases, but said he was still to receive Mr Timba's application.
"Yes, we are the ones handling RBZ cases, but we have not yet received those papers. Since you say they were filed yesterday (Tuesday), then we are yet to receive the application," he said.
Mr Timba alleges the RBZ had since authorised the withdrawal of substantial amounts of money from the RMB account for the curator's remuneration.
He argued the development has crippled the curator, Mr Reggie Saruchera, from effectively following up on the $9,4 million debt.
For the first four months of the curatorship, RBZ authorised $1 million for curatorship services, the money Mr Timba's lawyers argue was supposed to come from the central bank.
"It is, therefore, impossible that the curator's actions in not chasing the RBZ can be reported to the RBZ," said Mr Timba.
"The bank's single biggest debtor is second respondent (RBZ) which owes in excess of $8 million."
Mr Timba said $1 million owed by Dr Gono's firm had not been followed up for the same reason.
He said RMB can come out of the liquidity crisis it is facing if it gets back its money from the RBZ and Dr Gono.
Mr Timba is seeking an order declaring the conduct of Mr Saruchera and the central bank regarding remuneration unlawful.
He is being represented by Mr Vote Muza of Muza and Nyapadi and Advocate Thabani Mpofu.
The application seeks to bar further withdrawals of money from the RMB account and to reverse the asset valuation of the bank that was made for the purposes of disposing of shares to the National Social Security Authority.
Price Waterhouse and two other independent valuators placed the asset value of the bank at $11,7 million and NSSA was comfortable with the figure.
For unknown reasons, Mr Timba alleged, Mr Saruchera conducted his own valuation, which saw the value being reduced to $4,7 million.
Mr Timba wants the RBZ ordered to reimburse the money drawn from the RMB account for Mr Saruchera's remuneration.
He is also seeking an order compelling Mr Saruchera to make arrangements for the recovery of the outstanding US$9,4 million from the RBZ and Lunar Chickens.
"The curator's mandate was primarily to secure the position of depositors and creditors of the bank," said Mr Timba.
"He has, however, involved himself in such misconduct, which affects not only the interests of those depositors, but the rights of the shareholders as well.
"What really makes the position worse off is that in that misconduct respondent has enjoyed the support of second respondent (RBZ).
"In terms of Annexture B (appointment letter) first respondent (Mr Saruchera) is to draw his remuneration from second respondent.
"Not only is that clearly outlined in the appointment letter, but that has been the practice over the years and I have been around as a banker when second respondent placed financial institutions under curatorship in the last decade."
Mr Timba said the placement of RMB on curatorship was ironic.
"I also pause to emphasise the fact that fifth respondent was placed under curatorship inter alia on the basis that it had advanced loans to persons who could not repay," he said.
"The person who took that position is none other than the Governor of the central bank who himself has failed to repay.
"In other words, in placing the bank under curatorship, the Governor was accusing it of lending him money given that he clearly is unable to repay."
The accusation is contained in a High Court application filed by Mr Timba's lawyers on Tuesday.
The court papers show that the central bank owes Renaissance Merchant Bank $8,4 million, while Lunar Chickens is indebted to the tune of $1 million.
Lunar Chickens is believed to be owned by RBZ Governor Dr Gideon Gono.
The $8,4 million was borrowed by the central bank between 2009 and 2010 and was for statutory reserves, Diaspora money and gold bonds.
When contacted for comment last night, Dr Gono said: "Since the RBZ is cited as a respondent, it would be out of order to comment outside court proceedings. The beauty is that the law is very clear as to what should be done and provides relief to injured parties. So, we must wait for that process.
"As for the accusation about a company I am associated with, again, I am not its spokesperson though I am aware that the applicant is stretching credibility to interestingly breaking levels. Let the relevant parties meet in court. Suffice to say though that indigenisation must never be regarded as a euphemism for indiscipline, corruption and tolerance of bad corporate governance.
"The curator and board of Rennaissance issued separate statements yesterday dismissing the allegations. Now he is fighting NSSA who actually want to come in and help his bank. It's funny," said Dr Gono.
The boards for Renaissance Financial Holdings Limited and Renaissance Merchant Bank yesterday published a statement dismissing allegations of misconduct by the RBZ and Mr Saruchera. They were responding to Press reports that Mr Saruchera wanted to clandestinely sell RMB.
"We would like to thank the Governor of the RBZ and his team for their support in our efforts to resolve the crisis at RMB," the boards said in a joint statement.
"We also take this opportunity to thank the curator and his team for the work done to date to resuscitate RMB and protect the interests of depositors, curators and RMB itself."
Mr Saruchera also issued a statement yesterday saying he was making efforts to resuscitate the bank.
"I have secured the 33 percent shareholding that RFHL has in Africa First Renaissance Corporation Limited (AFRE) and invited NSSA to invest in RMB," he said.
"NSSA has responded positively to the proposals and negotiations regarding same are progressing well."
RBZ lawyer Mr Tawanda Chitapi of TH Chitapi and Associates yesterday confirmed he was the one handling RBZ legal cases, but said he was still to receive Mr Timba's application.
"Yes, we are the ones handling RBZ cases, but we have not yet received those papers. Since you say they were filed yesterday (Tuesday), then we are yet to receive the application," he said.
Mr Timba alleges the RBZ had since authorised the withdrawal of substantial amounts of money from the RMB account for the curator's remuneration.
He argued the development has crippled the curator, Mr Reggie Saruchera, from effectively following up on the $9,4 million debt.
For the first four months of the curatorship, RBZ authorised $1 million for curatorship services, the money Mr Timba's lawyers argue was supposed to come from the central bank.
"The bank's single biggest debtor is second respondent (RBZ) which owes in excess of $8 million."
Mr Timba said $1 million owed by Dr Gono's firm had not been followed up for the same reason.
He said RMB can come out of the liquidity crisis it is facing if it gets back its money from the RBZ and Dr Gono.
Mr Timba is seeking an order declaring the conduct of Mr Saruchera and the central bank regarding remuneration unlawful.
He is being represented by Mr Vote Muza of Muza and Nyapadi and Advocate Thabani Mpofu.
The application seeks to bar further withdrawals of money from the RMB account and to reverse the asset valuation of the bank that was made for the purposes of disposing of shares to the National Social Security Authority.
Price Waterhouse and two other independent valuators placed the asset value of the bank at $11,7 million and NSSA was comfortable with the figure.
For unknown reasons, Mr Timba alleged, Mr Saruchera conducted his own valuation, which saw the value being reduced to $4,7 million.
Mr Timba wants the RBZ ordered to reimburse the money drawn from the RMB account for Mr Saruchera's remuneration.
He is also seeking an order compelling Mr Saruchera to make arrangements for the recovery of the outstanding US$9,4 million from the RBZ and Lunar Chickens.
"The curator's mandate was primarily to secure the position of depositors and creditors of the bank," said Mr Timba.
"He has, however, involved himself in such misconduct, which affects not only the interests of those depositors, but the rights of the shareholders as well.
"What really makes the position worse off is that in that misconduct respondent has enjoyed the support of second respondent (RBZ).
"In terms of Annexture B (appointment letter) first respondent (Mr Saruchera) is to draw his remuneration from second respondent.
"Not only is that clearly outlined in the appointment letter, but that has been the practice over the years and I have been around as a banker when second respondent placed financial institutions under curatorship in the last decade."
Mr Timba said the placement of RMB on curatorship was ironic.
"I also pause to emphasise the fact that fifth respondent was placed under curatorship inter alia on the basis that it had advanced loans to persons who could not repay," he said.
"The person who took that position is none other than the Governor of the central bank who himself has failed to repay.
"In other words, in placing the bank under curatorship, the Governor was accusing it of lending him money given that he clearly is unable to repay."
Source - HeraldOnline
