HomeBusiness DigestImperial breached law

Imperial breached law

Roadwin Chirara

IMPERIAL Asset Management Company, whose licence was recently withdrawn by the Reserve Bank of Zimbabwe, was found to have been operating outside its mandate.

ace=”Verdana, Arial, Helvetica, sans-serif”>Sources said the company digressed into commercial lending and failed to account for its income earnings when central bank officials swooped on it about three weeks ago.

This comes after another asset management firm, GP2 Asset Management, was shut down on grounds that it had deviated from mandate.

Imperial, the sources said, could not explain where it was deriving its income from and whether that money was being generated through asset management operations only.

Such a scenario, they said, left the central bank convinced beyond reasonable doubt that the company was engaged in illegal operations.

At the time of closure, Imperial was said to have had an investment book totalling over $13 billion, with 99% of those funds on the money market.

While $12 billion was in the money market, $120 million was held in equities.

Imperial managing director Shadreck Vera conceded that the company had been involved in the financing of inputs for companies. “We were financing the buying of inputs for companies and the Reserve Bank said this was outside operations of an asset management company” Vera said. He said this week the company had begun to pay onto creditors and investors.

“We have begun paying out funds owed to investors and we are in an position to meet all our financial obligations,” Vera said.

He said the company was solvent and would be paying its shareholders a dividend after it concludes paying what is due to its creditors.

“Like I said, our book is evenly matched, shareholders are getting their profit share and dividend for their investment (and) almost everyone has been paid, only five people should be left,” said Vera.

Imperial was closed just about the same time with ReNaissance Asset Management (RAM), bringing to six the number of asset management companies closed this year.

The value of RAM’s book could not be determined although businessdigest learnt that the Harare asset firm paid out its creditors and investors “within 10 days of closure”.

The company is also said to have voluntarily offered to wind down operations, given the small margins in the sector.

Until March, Zimbabwe had 31 registered asset management companies.

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