THE Time Bank saga continued this week with information that the Reserve Bank of Zimbabwe (RBZ) could have cancelled the bank’s licence as a preemptive strike to avoid paying $400 billion it owes to the bank.
Time shareholders are cl
aiming that the cancellation was “suspicious” because it ignored the bank’s pending legal dispute with the RBZ over a botched PTA deal which they say contributed to the closure of the bank.
The central bank last month cancelled the licence despite the fact that Time’s legal dispute with them had not yet been finalised by the High Court.
In 2002, Time took the RBZ to the High Court arguing that the central bank had overcharged them on interest payable on a loan Time had got from PTA Bank.
In their court papers on the dispute, Time said the RBZ owed them $400 billion in overcharged interest.
They wanted the court to compel the RBZ to repay the money with interest. The High Court is still to make a ruling on the matter.
The same court is still to make a decision in another matter filed in 2004 in which Time is challenging its placement under curatorship.
In that case, Time is arguing that its placement under curatorship was hurried possibly to avoid the consequences of the PTA dispute which they had launched against the RBZ.
Time Bank shareholders have since sued the RBZ for the cancellation, arguing that the decision to cancel their licence should not have been taken before the two cases had been resolved.
This has raised fresh concerns over the RBZ’s impartiality in dealing with financial institutions in which they are an interested party, especially coming soon after governor Gideon Gono ruled in favour of the Zimbabwe Allied Banking Group (ZABG) retaining Royal and Trust banks’ assets in a dispute referred to him by the Supreme Court.
Gono had created ZABG.
Time bank directors have complained in their latest court papers that the decision to cancel the licence violated critical sections of the Banking Act.
They said the cancellation was suspicious because they were only given two days to respond instead of the statutory 30 days.
Sources close to Time shareholders said the RBZ had cancelled Time’s licence before it could hear and decide on the bank’s appeal against the findings and actions of the curator.
The curator told the central bank in his report that Time was insolvent and therefore did not have funds to either reopen or pay its creditors.
Time is alleging that the central bank had used “unverified findings” from the curator to justify the withdrawal of the licence.
Time said the curator had ignored that the RBZ had made an undertaking to pay 50% of the $400 billion as part of the settlement to the PTA loan dispute.
According to that arrangement, the central bank had pledged to pay $200 billion to Time as part payment before the matter could be resolved.
“The curator has decided to exclude 50% of the claim by Time Bank against the Reserve Bank in respect of the Memorandum of Deposit (MOD) case filed under HC3461/04 despite the Reserve Bank’s (as regulatory authority) approval that 50% of Time Bank’s claim be included as an asset in the Time Bank balance sheet and statutory returns including BSDI return,” said the bank in their appeal.