NMB Bank will next week receive a US$2,5 million loan from an offshore financial institution to cover the hole created by a series of fraudulent activiti
es that rocked the bank last year.
The money will be used to pay exporters and individual foreign currency account holders who lost their money between 2006 and 2007.
NMB lost about US$6,2 million to a syndicate of officials in the treasury department who siphoned foreign currency from the bank’s accounts for onward sale on the parallel market.
Businessdigest can reveal that the loan is being facilitated by ABC Bank. Although the identity of the source of funds is still unknown, a source said it is a South African financial institution.
The loan documents have been prepared and the parties have agreed to the terms, the source said this week.
“Probably by the end of next week the deal will be completed,” said a senior official in NMB.
The central bank’s External Loans Coordinating Committee is understood to have approved the loan deal two weeks ago. The committee is responsible for assessing and approving external loans for companies in Zimbabwe.
NMB has two options it can use to repay the loan. The bank can go back to its shareholders to raise additional capital through a rights issue to repay the loan.
The other alternative will be to convert the debt into equity to give the lender a shareholding.
For this option to work, NMB will have to seek shareholder approval to issue new shares. This would mean that NMB will have a foreign shareholder. An external audit found that the money was siphoned from NMB Bank through 210 fraudulent transactions.
Businessdigest understands that no arrests have been made since the scandal was unearthed in April last year.
The RBZ team of investigators submitted its findings to the police together with the names of the directors of companies that are at the centre of the fraud in May last year.
The RBZ has also submitted statements from NMB’s management to the police. In their statement officials from NMB denied any involvement saying the transactions were approved in error.
A forensic auditing firm completed its comprehensive investigation into the fraud in November last year.
The audit shows that the beneficiary companies held accounts with Kingdom, Barclays, Stanchart, Zimbabwe Allied Banking Group, MBCA, Premier Bank, CBZ, ZB and Stanbic Bank. A few clients from Cabs, the biggest building society in the country, also benefited. The money was transferred into an offshore company called Cardinal Finance (Pvt) which holds an account with AKB Bank of Switzerland.
A conduit company, Haus (Pvt), would then transfer to Zimbabwean companies in exchange for Zimbabwean dollars. NMB is still pushing for the central bank to reverse its decision to cancel their foreign currency licence following the fraud.
NMB believe that it would be unfair to cancel their dealership licence when new evidence shows that other banks were used in the transactions.
NMB Bank wants the RBZ to carry out thorough investigations into the whole foreign currency system in order to establish how the other banks were involved.