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Barbican closure: CEO cries foul

Dumisani Muleya

BARBICAN Holdings chief executive Mthuli Ncube says the Reserve Bank of Zimbabwe (RBZ) took “excessive” measures by rushing to close his group’s bank and asset management firm.
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In a telephone interview this week, Ncube said the RBZ could have intervened in the company’s financial crisis without taking the drastic action of closing Barbican Bank and putting Barbican Asset Management into liquidation.


Barbican Bank, which was bailed out to the tune of $6 billion by the RBZ is currently under curatorship while the asset management firm has been placed under liquidation.


“I think the action taken against us was disproportionate and excessive,” Ncube said.


“There are some banks which were exposed to over $100 billion but were said to be in a sound financial position. I don’t have the full facts of what happened but I’m still shocked, baffled, and confused about these events.”

Ncube said it was unfortunate the RBZ action came when Barbican Bank had signed a Memorandum of Understanding with investors to recapitalise the institution. He said Barbican had also started addressing corporate governance issues raised by the authorities.


Barbican shareholders were in the process of raising $20 billion for recapitalisation, Ncube said. He also said his bank was happy about the $10 billion capital adequacy requirement.


“We are trying to raise $20 billion to recapitalise the bank. At the moment we are tying a few loose ends,” he said. “We don’t want our depositors to be prejudiced but the issue of curatorship has had negative consequences on depositors.”


Ncube said placing the asset management firm in liquidation was wrong because “the company had not failed to pay its creditors”.


The RBZ said Barbican was placed under curatorship to “protect depositors and creditors”. It said the bank was “experiencing serious liquidity problems as a result of imprudent banking behaviour”.


It also said the bank was involved in “questionable cross-border foreign exchange activities which are yet to be cleared to the satisfaction of all parties”.


However, Ncube denied the accusations that he ran down Barbican through poor corporate governance, bad management, foreign exchange deals, and siphoning funds to finance his operations in South Africa and Botswana.


“Barbican had a tight accounting and risk management system,” he said. “The problem really was capital expenditure and inflation. It’s expensive to roll out a bank, moreso in such very difficult conditions. These allegations are absolutely false.”


On reports that he fled after it became known that his group would not survive the current RBZ crackdown in the financial sector, Ncube said he did not run away because even central bank governor Gideon Gono was aware of his trip abroad.


“The truth of the matter is I left the country on Monday, March 15 for Washington to attend a scheduled African Economic Research Consortium meeting,” he said.


“I have been appointed to that organisation’s board on a competitive and global basis. I was going to be away for a week. The RBZ was fully aware of that because I had attended a meeting with them the day I left. There is no question of running away.”


Asked why then he had not yet come back, Ncube said he was still trying “to recover from the shock” of the “bad news”.


He said he would definitely come back as soon as the dust settles.


“I will come back. It’s just that I’m still shocked and I’m trying to recover. I’m a strong nationalist and there is no way I can run away from my country.”

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