Harare — MORE than $600 billion in cash and assets was allegedly either externalised or misappropriated by management of different financial institutions at the height of the banking crisis last year although none of the suspected perpetrators has been convicted yet.
At least 10 financial institutions fell victim to unscrupulous bosses who either externalised earnings from the firms in the form of foreign currency or awarded themselves hefty non-performing loans.
Among the financial institutions which fell victim to unscrupulous management are ENG Capital, National Discount House, Century Holdings, First Mutual Life Limited, Trust Bank, Barbican Holdings, NMB Bank, Royal Bank and Intermarket Holdings.
ENG Capital was involved in underhand dealings with most of the troubled financial institutions.
It is, therefore, not surprising that the discovery in December 2003 of financial impropriety at ENG Capital opened a Pandora*s box in the financial sector.
ENG bosses on their own allegedly siphoned out more than $61 billion in depositors* funds from the asset management company.
This led to the sad situation where depositors laid siege at the firm leading to the liquidation of the country*s fastest growing financial institution.
ENG*s collapse had a contagion effect as many other asset management firms, including Barbican, followed the path after discovery that the holding firm was unsound with $46,6 billion having been misappropriated.
Barbican was engaged largely in non-banking activities and the financial institution was saddled with huge debts. It was thus not surprising that the commercial bank was placed under curatorship.
It re-emerged this week under the banner of the Zimbabwe Allied Banking Group.
Its asset management arm was placed under liquidation with creditors only managing to get a maximum of 18 cents per dollar owed.
Intermarket bosses also allegedly abused their positions and awarded themselves non-performing loans amounting to $120 billion.
These loans exposed the financial institution to the winds of change which swept across the sector last year and by the first quarter three of its arms - the building society, commercial bank and the discount house - were placed under curatorship.
Only the building society emerged out of the murky waters with its reputation intact after the curator, Mr Ngoni Kudenga, discovered that the financial institution had not caught the cold.
Intermarket is not part of ZABG and hopes are high that it will reopen its doors as part of the Financial Holdings Limited with whom it is engaged in merger talks.
NMB management, who have since gone into self-imposed exile, allegedly externalised about $30 billion in foreign currency.
This financial institution was saved from the jaws of curatorship after it was discovered that the extent of the damage was not as severe as originally feared.
While most of the financial institutions fell victim to unscrupulous management, there are others whose managers were involved in underhand dealings with other players in the sector.
In a classic case, CFX Financial Services entered into a marriage with Century Holdings in July last year only to discover less than six months later that the latter was in financial dire straits.
Although the original prejudice was put at $115 billion, the figure has since ballooned to $190 billion, an amount that is likely to leave CFX Financial Holdings on the brink.
ENG appears to have been at the centre of all the unsavoury activities in the financial sector prior to December 2003 as it was involved in a number of deals involving different firms.
Century Discount House fell victim to the machinations of ENG*s youthful directors as it lost $24 billion after the sale of the discount house was not taken to its logical conclusion.
It emerged mid last year that the sale of the discount house was not fully consummated and it continued to trade under the Century Holdings banner.
CDH*s books were in shambles while $24 billion was accounted for.
FML Asset Management was also exposed to ENG to the tune of $30 billion after its management gambled with depositors* funds and deposited them into the bottomless pit of the latter.