THE Reserve Bank of Zimbabwe has turned down a lending licence application by GP2 Group.
The group, which currently
operates an asset management company, GP2 Asset Management, is reported to have been denied a licence after the central bank raised concerns over its current operations.
The central bank is said to have queried the group’s current lending policy, which it said was in contravention of its asset management licence that it had been issued with.
The Reserve Bank’s concerns come after the company was accused of lending money to the public without a licence.
The company’s managing director, Bernard Manyenyeni, confirmed that the company had been denied a money-lending licence.
He however denied that the asset management arm of the group was involved in the illegal lending of funds.
“Yes we were denied a licence, but it should be put across that it’s not the asset management company that was lending the money but a separate entity, GP2 Finance,” said Manyanyeni.
He said the group had an interest in the finance company that was lending the funds as it held an 80% shareholding in the operation with the remaining 20% being held by other investors.
He said GP2 Group had invested $80 million in the proposed business unit, with the other investors putting in $20 million to enable the company to meet the central bank requirements for its licensing.
“Since we had an 80% interest in the finance company, we had to put in money to enable it to meet the RBZ requirements and this we did with an initial injection of $80 million with others putting in the remaining $20 million,” he said.
Manyenyeni denied that the company had invested investors’ funds in the failed project.
“We are operating above board and there is nothing wrong that we have done as an asset management arm,” said Manyenyeni.
The finance company is said to have lent as much as $5 billion during its operation, with the amount having being paid back.
After winding down its operations the finance unit is said to be owed funds totalling $500 million.