Financial Gazette (Harare)
Dumisani Ndlela
2 July 2009
Harare — TRUST Bank Limited could make a comeback after the central bank opened discussions for an amicable resolution of an asset dispute over the takeover of the commercial bank at the height of a banking sector crisis in 2004, The Financial Gazette has established.
The Reserve Bank of Zimbabwe (RBZ) took over the assets of Trust Bank, Royal Bank and Barbican Bank following its liquidation of the banking institutions, which had been declared insolvent.
This followed an RBZ clampdown after rampant financial sector indiscipline - characterised by underhand dealings as well as a departure from core business - spawned an economic crisis.
Over 15 financial institutions closed during the clampdown, but it was the closure of the three banking institutions that sparked a furore after their assets were taken over to form the Zimbabwe Allied Banking Group (ZABG).
Shareholders of both Trust Bank and Royal Bank had launched court challenges against the take overs, but these remain unresolved.
An industry source said talks to resolve the dispute - involving representatives from all the three banks, as well as the RBZ - had begun.
"There's zeal from all parties to resolve this in an amicable manner. It's going to be a win-win situation," said a source close to the negotiations.
"There's recognition by the Reserve Bank that previous asset owners had lost value so it's trying to come up with a resolution in the best interest of all stakeholders," said the source.
He indicated, however, that it was not yet clear what form the new arrangement will take or how soon the issue would be resolved.
Previous reports have suggested that the RBZ was working out a plan to dispose of its shareholding in ZABG but would give Trust Holdings, the previous owner of Trust Bank, as well as Royal Bank and Barbican Holdings shareholders the first right of refusal.
Trust Holdings recently received securities previously held by the RBZ for liquidity support granted to Trust Bank prior to its closure.
The securities held by the central bank over the liquidity support had forced Trust Holdings into the disposal of key assets to generate cash.
Trust is likely to emerge as the biggest shareholder in ZABG as it had the largest number of assets taken to form the banking concern.
It was not immediately possible to locate the key stakeholders of the closed banks for comment. Gift Shoko, the chief executive officer of Trust Holdings, the only institution that remains operational, was said to be on business in Malawi.
The group still holds stakes in two financial companies in Malawi - Trust Securities and Trust Finance - after Unit Administration Limited, its biggest creditor in Malawi, seized 45 percent and 60 percent respectively over unpaid debts.
The group had sold a 75 percent stake in a local operation, Trust Finance, to TN Financial Holdings over a year ago. It remained with a 25 percent stake.
Be the first to Write a Comment!
Copyright © 2009 Financial Gazette. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com).
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
