THIS week we reveal details of a process by government and the central bank to hand back assets illegally taken from financial institutions to form the Zimbabwe Allied Banking Group (ZABG) in 2004.
The process of handing back the assets to Royal Bank and Trust Bank is taking place four years after a Supreme Court ruling by Justice Wilson Sandura that the sale and transfer of Trust Bank and Royal Bankâ€™s assets to the ZABG was â€œnull and void, and of no force or effectâ€. The judgement said the RBZ acted unlawfully when it approved the sale of the assets to the ZABG.
We have not lost sight of the fact that the formation of ZABG followed a liquidity crisis wrought by impropriety on the part of the affected financial institutions. We do not also discount the fact that something needed to be done to rescue the situation in the financial sector at the time.
It is the handling of that financial crunch leading to the formation of ZABG that today brings to the fore the flawed policies that were employed in the name of extraordinary intervention measures. In essence, it was blatant recklessness which never made sense from the word go.
Today, the ZABG stands tall and dark as a testament to lawlessness, assault on property rights and the stateâ€™s disregard for the rule of law. The authorities have been working quietly to undo this structure largely because of what it represents: illegality.Â Justice Sandura said in his judgement: â€œThis is an appropriate case in which this court (Supreme Court) should mark its disapproval of the unlawful conduct of the Reserve Bank, (the) ZABG and the curators.â€
The ruling was critical of the conduct of the curators who instead of nursing ailing banks back to life decided to bury them alive by selling their assets. It is emblematic that four years after the ruling, the bank has continued to exist largely due to the fact that government, through the Reserve Bank, was determined to disregard the law.
The sale of the assets to the ZABG was unlawful. The bank has been operating on stolen assets. The unresolved issue of ZABG therefore stands as a stark reminder of the tasks to hand in the quest to protect property rights and adhere to basic tenets of the rule of law.
ZABG is not the only institution whose legal standing is open to question today. The agro-industrial sector is in this sorry state today because the land reform programme was badly executed in a hurry in part to settle political scores. This unfortunate deviancy is the reason Zimbabwe is begging for food when it has the capacity to feed its own people.
There is also another case yet to be dealt with. Businessman Mutumwa Mawere lost diversified SMM Holdings in yet another dubious project undertaken in the guise of corruption busting. The government used a conveniently crafted law to grab the company, just as it amended the Land Acquisition Act along the way to legalise the seizure of white-owned commercial farms.
The long incarceration in remand of former Finance minister Chris Kuruneri on spurious charges of corruption should not be discounted either. Such has been the lawlessness that the central bank recently admitted to grabbing foreign currency from private accounts as if it was the zenith of innovation in financial management. This illegality should never be allowed again.
The formation of the GNU has ushered positive energy into the economy but the continued existence of institutions like ZABG, the closed Kondozi horticulture estate and vast stretches of fallow land remind us of how lawlessness can easily ruin an economy. These are issues requiring urgent attention and not just the outstanding political issues in the global political agreement on which too much energy is being spent.
The quest to address the ZABG issue is a positive development. The resolution of the issue in an amicable and legal manner will help build confidence in the financial services sector which has borne the brunt of obtuse state policies.
It is a truism that economic liberties cannot be separated from civil liberties. The government must be seen to be adhering to the rule of law and not using the law to dispossess and punish. A government that abducts, illegally detains or tortures anyone for whatever reason will not find it difficult to take away private property, interfere in private contracts and commandeer private resources.
When leaders are unaccountable, itâ€™s impossible to predict where they will strike next in pursuit of their ruinous aims. Economic freedom and civil liberty must move together. Both are threatened by unaccountable power that refuses to be confined by the rule of law. We hope to see justice being served in the ZABG saga.