DPC to sue failed banks direc­tors

Chronicle (Zimbabwe) - - Business - Harare Bureau

THE De­posit Pro­tec­tion Cor­po­ra­tion (DPC) will pur­sue lit­i­ga­tion against all bank direc­tors and share­hold­ers who abused de­pos­i­tors’ funds, leav­ing the in­sti­tu­tions with­out enough as­sets to re­cover the funds.

DPC chief ex­ec­u­tive Mr John Chikura said in an in­ter­view yes­ter­day that the de­posit in­surer was de­ter­mined to re­cover all or a sig­nif­i­cant por­tion of the de­pos­i­tors funds that were lost in the failed banks.

The DPC chief ex­ec­u­tive’s re­marks come in the wake of a sim­i­lar process al­ready un­der­way at In­terfin Bank, where the State ap­pointed liq­uida­tor is su­ing direc­tors and share­hold­ers for prej­u­dic­ing de­pos­i­tors of $136 mil­lion.

Ac­cord­ing to the liq­uida­tor, Mr Ngoni Ku­denga of BDO Zim­babwe, share­hold­ers and direc­tors al­legedly took ad­van­tage of In­terfin’s cu­ra­tor­ship to hide as­sets and putting some com­pa­nies un­der ju­di­cial man­age­ment to avoid le­gal ac­tion for in­sider loans worth $90 mil­lion they ac­cessed when the bank was still run­ning.

DPC is in the process of com­pen­sat­ing de­pos­i­tors of failed banks in­clud­ing AfrAsia, Al­lied Bank, Ge­n­e­sis In­vest­ment Bank, Cap­i­tal Bank, Royal Bank, Trust Bank and Te­trad In­vest­ment Bank, to a max­i­mum in­sur­able limit of $1 000.

“We are do­ing the same (lit­i­ga­tion) any­where where there are direc­tors or share­hold­ers who abused de­pos­i­tors’ funds. DPC is de­ter­mined to re­cover all the funds that de­pos­i­tors lost. If we can­not re­cover the money from as­sets, where banks were left as shells, we will try and re­cover the funds from the di­rec­tor or share­hold­ers,” Mr Chikura said.

He said chances for suc­cess­ful pros­e­cu­tion of the direc­tors and share­hold­ers deemed to be re­spon­si­ble for the col­lapse and loss of de­pos­i­tors’ funds were bright if all par­tic­i­pants in the process co-op­er­ated.

The DPC CEO said Zim­babwe has had more than enough laws to bring to book direc­tors and share­hold­ers of failed banks who took ad­van­tage of their po­si­tions and vul­ner­a­bil­ity of de­pos­i­tors to per­son­ally ben­e­fit.

Mr Chikura said share­hold­ers and direc­tors of failed banks should be pros­e­cuted for abus­ing mil­lions of dol­lars of de­pos­i­tors’ funds in a coun­try where peo­ple re­ceive harsh prison term for steal­ing cat­tle.

DPC is su­ing In­terfin found­ing ma­jor­ity share­holder Farai In­no­cent Rwodzi and 12 direc­tors at the High Court over $136 mil­lion lost by de­pos­i­tors of the failed bank.

The other direc­tors be­ing sued are Ti­mothy Chi­ganze, Jeremiah Tsodzai, Ray­mond Njanike, Em­manuel Ta­garira, David Mbiba, James Shum­ban­hete, Pe­la­gia Kafesu, Dr Teddy Zen­geni, Maxwell Re­vai, Christopher Sam­baza, Tendai Chimuriwo and Nomsa Ncube.

Rwodzi is be­ing ac­cused of us­ing his in­flu­ence as ma­jor share­holder to ac­quire loans which he used to set­tle per­sonal debts and cap­i­talise com­pa­nies where he had share­hold­ing in­ter­ests or was a di­rec­tor.

The de­posit in­surer ar­gues that the direc­tors were re­spon­si­ble for the con­trol, di­rec­tion and man­age­ment of the bank, but later re­neged on their man­dates lead­ing to the col­lapse of the fi­nan­cial in­sti­tu­tion.

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