HomeBusiness DigestKasukuwere a former Genesis shareholder

Civil society slams Copac for omitting ‘key’ points

Since inception in 2001, as the predecessor to the former Trade and Investment Bank (TIB), founded by former Reserve Bank governor Dr Kombo Moyana, Genesis has faced numerous challenges which  include inadequate capital, perpetual losses, poor asset quality and weak risk management practices.

According to sources the bank has suffered from a chronic lack of shareholder support, resulting in the persistent  under-capitalisation which meant that it could not undertake any significant business.

The bank, a wholly-owned subsidiary of Genesis Financial Holdings, whose shareholders are listed as ZimRe Holdings Ltd (ZHL),which holds 73,02% equity through various investment vehicles and subsidiaries. Indigenisation and Empowerment minister Saviour Kasukuwere’s Migdale Holdings, through various shelf companies holds 17,20%, the Local Authorities Pension Fund holds 3,3% and 4,07% was reserved for Genesis staff and management. The remaining 3% is held by various investors.

According to a recent announcement by Reserve Bank of Zimbabwe (RBZ) governor Dr Gideon Gono: “Board of Directors of Genesis Investment Bank met and resolved to voluntarily surrender the institution’s banking licence in line with Section 14 (4) of the Banking Act (Chapter 24:20).

“This follows failure by the institution to raise the requisite minimum capital from more different potential investors whom the bank tried to engage since 2009.”
According to Gono, the bank’s board of directors had failed to steer the institution out of numerous deficiencies including gross under-capitalisation,  persistent losses, poor asset quality and a paltry deposit base, which led to chronic liquidity challenges. Genesis bank was insolvent with a negative core capital of US$3,2 million as at March 31 2012.

The RBZ saw no prudential basis for the continued existence of Genesis and advised that it had closed the bank and commenced proceedings for the liquidation of the institution.

Critical to accepting the Genesis board’s decision was the fact that the bank was one of the few which has failed to court credible investors to help it meet the minimum capital requirements set by the central bank. 

Since 2010, the beleaguered bank has entered into negotiations with various potential investors but all have come to nought. The association of the bank with Kasukuwere might have contributed to potential foreign partners steering clear of the bank.

Kasukuwere has been at the forefront of a crusade to take over ownership of foreign-owned banks, but critics say he should stay clear of banks as he has presided as a shareholder of the failed Genesis.

Contacted for comment, Kasukuwere denied he was still a shareholder in Genesis, saying he sold his equity.
“As a matter of fact, I sold out my shareholding in the bank a long time ago. I am no longer a shareholder and if you check the Genesis board I have no representation,” he said.

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