HomeLocal NewsGono battles to rescue Kingdom Bank

Gono battles to rescue Kingdom Bank

THE RESERVE Bank of Zimbabwe (RBZ) governor Gideon Gono this week met Spiritage Group CEO Zachary Wazara and Kingdom bank founder Nigel Chanakira and key officials from the companies in a bid to resolve an escalating fight between the parties to avoid the collapse of AfrAsia Kingdom Bank.

Report by Chris Muronzi

Sources privy to the Monday meeting held at the central bank’s Samora Machel office said Gono called for a meeting to narrow a widening rift between Wazara, Chanakira and Kingdom Bank over a non-performing US$21 million loan advanced to the telecommunications guru’s Valley Technologies, a mobile phone operator.

According to the sources, Gono is keen on assisting the feuding parties to iron out contentious issues that saw Wazara writing a damning letter to the central bank early this month claiming Kingdom Bank attempted to conceal a non-performing loan that had eaten into the bank’s equity in the December reporting period from the bank.

This comes after Gono over the weekend said he was confident the situation was under “control for normal business to continue.”
He added he was committed to approving and facilitating all legal and administrative requirements needed to ensure AfrAsia Bank Ltd and any other shareholder could inject funds or shore up shareholding in the troubled bank.

In an announcement last week after our publication of the story highlighting a feud between Chanakira and Wazara and the threat it poses to the bank, AfrAsia Bank Limited said: “AfrAsia Bank Limited wishes to re-iterate its commitments to its investment in AfrAsia Kingdom Zimbabwe Ltd – AKZL, the Holding company of Kingdom Bank.”
AfrAsia said it had since January offered support to Kingdom in various forms including assisting the bank secure lines of credit and lines guarantee.

Mauritius-based AfrAsia Bank Ltd invested US$9,5 million in Kingdom Financial Holdings Ltd for a 35% equity stake in the group which owns the local bank. Gono yesterday said getting warring parties to negotiate was common in the banking sector but said such misunderstandings were more prevalent in indigenous-owned banks.

He said: “I’m unable to say much at this stage without undermining the discussions under way. Those familiar with dispute resolution proceedings know that it is never done until its done. For the record, the dispute is between corporate entities and the parties taking part in those discussions are doing so in their company representatives capacities. Our role as a central bank is to help these parties to avoid destabilising one another in the financial sector.”

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