Business / Companies
Royal Bank directors must be arrested
25 Mar 2015 at 17:53hrs | Views
Royal Bank creditors and depositors have authorised the bank's liquidator to institute legal proceedings against former directors for abusing depositors' funds.
This came after the liquidator Cecil Madondo of Tudor House Consultants (Pvt) Limited had sought direction over how to proceed in the face of possible violation of provisions of the Companies Act by directors. Some of the directors include Peter Chikumba and Jeff Mzwimbi.
Creditors are likely to lose their investments after the institution realised $3 million from the sale of its assets against claims worth US$9 million.
It emerged at a creditors meeting for the collapsed bank chaired by the Master of High Court in Harare this Wednesday that an audit of former directors will be carried out in the next 10 days to determine whether they are responsible for the closure of the bank.
Royal Bank liquidator, Mr John Chikura told reporters after the creditors meeting that additional claims worth $2,7 million were also submitted by creditors at the meeting.
"We have resolved to institute investigations into the former directors as we seek to verify and come up with a win-win situation for the bank and depositors," he said.
Royal Bank was closed on 27 July 2012 by the Reserve Bank of Zimbabwe (RBZ) due to gross undercapitalisation and other operational irregularities.
However, analysts say government should urgently amend the Banks and Banking act to ensure directors of banking institutions found guilty of abusing depositors funds are prosecuted.
This came after the liquidator Cecil Madondo of Tudor House Consultants (Pvt) Limited had sought direction over how to proceed in the face of possible violation of provisions of the Companies Act by directors. Some of the directors include Peter Chikumba and Jeff Mzwimbi.
Creditors are likely to lose their investments after the institution realised $3 million from the sale of its assets against claims worth US$9 million.
It emerged at a creditors meeting for the collapsed bank chaired by the Master of High Court in Harare this Wednesday that an audit of former directors will be carried out in the next 10 days to determine whether they are responsible for the closure of the bank.
"We have resolved to institute investigations into the former directors as we seek to verify and come up with a win-win situation for the bank and depositors," he said.
Royal Bank was closed on 27 July 2012 by the Reserve Bank of Zimbabwe (RBZ) due to gross undercapitalisation and other operational irregularities.
However, analysts say government should urgently amend the Banks and Banking act to ensure directors of banking institutions found guilty of abusing depositors funds are prosecuted.
Source - zbc
