A market source says former Trust Holdings Ltd CEO William Nyemba met Reserve Bank of Zimbabwe chief Gideon Gono a fortnight ago where the central bank boss assured the banker that the RBZ would “take care of all liabilities”.
In the same meeting, Gono is said to have assured Nyemba that THL would get all of its remaining assets from ZABG, the banking group that emerged after the closure of Trust Banking Corporation and Royal Bank Zimbabwe in 2004.
According to the same source, ZABG will continue as a going concern but “without Trust’s assets”.
Under the same arrangement, ZABG will keep its staff. THL on the other hand will pick “people the company wants to work with”.
“THL was assured that it would get the bank back next week following a one-on-one meeting between Gono and Nyemba two weeks ago. All the liabilities will be taken care of by the RBZ through some arrangement that does not have anything to do with THL. What THL is getting is whatever is remaining of its assets,” a source said.
According to the same source, ZABG’s staff will be the responsibility of RBZ and the bank.
“The current ZABG staff will be the responsibility of RBZ or ZABG (which is being allowed to remain as a going concern but minus THL’s assets, largely the branches with all the fixtures, fittings and equipment). But THL is keen on “picking its own people”.
Last year, Gono appointed Ngoni Kudenga & Associates, an auditing firm, to conduct an urgent valuation of ZABG’s assets so that the central bank chief could deal with the ZABG and Trust issue.
Gono ordered a valuation of ZABG’s assets to facilitate a smooth handover of the controversial bank’s assets to its original owners.
It is not clear if Kudenga presented the report but sources say THL officials have been meeting with central bank officials since last year to iron out the ownership dispute.
Efforts to contact Nyemba proved fruitless at the time of going to press while an e-mail sent to Gono’s personal assistant Chengeto Dube was not responded to.
ZABG started trading on February 1 2005 through a special purpose vehicle called Allied Financial Services.
After formation of the bank, assets belonging to the troubled banks were transferred to Allied Financial Services, which is owned by the government through the central bank.
On completion of the valuations, the government, through the central bank, was expected to hand the bank’s assets back to the directors of the affected financial institutions.
Two years ago, the central bank was reportedly keen on recovering unspecified amounts the banker of last resort advanced as liquidity support to Trust until their closure. Trust and Royal banks initially argued that the in-deplume rule would have to be followed.
Trust argued that because of the in-deplume rule, interest due to the RBZ could not exceed the capital and therefore the claim by the RBZ that the banks owed the central bank trillions of dollars was misplaced.
Royal and Trust Banks got a favourable Supreme Court ruling in 2005 which declared the transfer of Royal Bank’s assets to ZABG “null and void”.
Legal experts interpreted Justice Wilson Sandura’s ruling as virtually pulling the plug on ZABG and declaring it insolvent.
It remains unclear which assets Trust would recover from ZABG yet or whether this would have an operational effect on the banking group.
The ruling was handed down on appeal by Trust and Royal banks who sought an interdict against their inclusion in the ZABG, an amalgamation of banks set up by the government. — Staff Writer.