FIRST Mutual Ltd (FML) is taking a cautious approach with regards to its investments in Trust Holdings (THL). FML owns a 27% stake in Trust Holdings including a significa
nt interest in its subsidiaries – Trust Corporate Securities (Pvt) Ltd and Trust Discount House.
FML, in its half-year-end results, did not account for its interest in the financial services group, a move signaling impending change of policy with regards to its stake.
FML chief executive officer Douglas Hoto told a media briefing that the decision had been taken because the company had not received any return from its investment.
Hoto however said in light of the developments with regards to the recent Supreme Court judgement on Trust Bank, the company would maintain a cautious approach.
A Supreme Court judgment delivered last week could have a material impact on Trust Holdings. The ruling could mean that the holding company might get back Trust Bank that the court ruled to have been taken over illegally by the troubled Zimbabwe Allied Banking Group (ZABG).
“We have not accounted for Trust as an investment in these results mainly as a result of the group taking a cautious approach to the investment. You also have to realise that when the time comes for us to receive value as investors from that (THL) then we will have to account for it,” Hoto said.
Hoto said the company currently values its stake in Trust at $16 billion and would not be taking any sudden decision on disposing of its interest.
“We are not going to be making any sudden decisions with regards to our investments in THL. If you calculate correctly, you will realise that investment is now valued in the regions of over $16 billion,” said Hoto.
“The recent developments at Trust, we have only read in the papers and cannot base a business decision on what we read,” Hoto said.
He said Capital Alliance, a consortium of FML executives and owner of 20% of the company, was currently making strides towards settling with its creditors.