Zimbabwe: Commercial Court 'Long Overdue'

A RESERVE Bank of Zimbabwe plan to establish a commercial court to exclusively handle commercial crime and disputes is legal overdue and will expedite the procedures, analysts have said.

Presenting the Monetary Policy Statement on Wednesday in the capital, acting central bank governor Charity Dhliwayo said there were efforts to set up a commercial court and speed up litigation matters in the financial sector.

"Currently commercial and banking related cases are taking long to be settled through the court system," Dhliwayo said. "In order to expedite the settling of these disputes there is need to establish a commercial court dedicated to adjudicating commercial and banking related cases. The Reserve Bank will with immediate effect engage the relevant authorities and stakeholders to address this issue."

One of the new provisions to the proposed amendment to the Banking Act, Dhliwayo revealed, would be the introduction of a criminal as well as civil liability of any shareholder, director or senior manager of a banking institution, who will be found to have acted negligently or fraudulently, resulting in loss of money by depositors or failure of a banking institution.

This comes after several banking executives were implicated in improper banking practices.

Interfin Bank founders Farai Rwodzi, Timothy Chiganze and Jerry Tsodzai are accused of siphoning depositor funds by granting themselves loans to the tune of more than US$60 million which were not being repaid. The bank has been under curatorship for more than a year with stranded depositors failing to access their money locked up in the bank. A forensic investigation of ReNaissance Merchant Bank (RMB) by BCA Forensic Audit Services showed the bank's major shareholder -- Patterson Timba -- violated corporate governance structures, advancing loans amounting to US$13,9 million in related party transactions and insider loans.

A total of US$1 018 286,25 of depositors' funds were also used to pay for Timba's personal expenses.

AfrAsia Kingdom Zimbabwe Ltd CEO Lynn Mukonoweshuro told businessdigest on the sidelines of the delivery of the monetary policy statement that although they were still digesting the contents of the statement, the move to establish a commercial court was welcome.

She said the move, which she described as "fair", would help speed up the backlog in the courts as well as expedite effectiveness in settling legal disputes in the financial sector.

Corporate law expert Claudius Nhemwa said the establishment of a commercial court would stem the abuse of depositors by rogue financial institutions.

"This is a welcome development as some have been using the courts to delay payments," Nhemwa said. "The commercial court will allow commerce to move forward."

He said this had been instituted in India with the enactment of the Recovery of Debt Due to Banks and Financial Institution Act of 1993.

Nhemwa said currently commercial cases in the courts were bunched in the same court with maintenance and divorce cases, a situation that is undesirable.

He pointed out that last year the legal process "was brought to a standstill" due to electoral petitions brought about by last year's general elections.

Nhemwa said the introduction of a commercial court would expedite legal cases in the financial sector and have the same effect it has had after the setting up of the labour court.

"I am in full support of such a move as it will help the economy in a big big way," he said.

Ads by Google

Copyright © 2014 Zimbabwe Independent. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 2,000 reports a day from more than 130 news organizations and over 200 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.