THE Deposit Protection Corporation (DPC) last week commissioned a forensic audit into the operations of AfrAsia and Royal banks in a bid to prosecute shareholders or owners of banks guilty of abusing depositors’ funds, businessdigest has learnt.
Both AfrAsia and Royal closed down leaving thousands of depositors in the cold. AfrAsia Bank was closed in February this year while Royal shut shop in 2012.
Those affected by the closure are currently receiving their money from the DPC.
“DPC, with the mandate of creditors, has commissioned a forensic audit of AfrAsia Bank and Royal Bank,” an informed source told businessdigest. “Creditors have also mandated DPC to follow up on parties who abused depositors’ funds.”
DPC will also soon commission forensic audits of other banks which were closed to determine whether fraud and corruption were the reasons for the banks’ failure to remain operational. Other failed banks include Genesis, Allied, Interfin and Trust.
The corporation is determined to institute both criminal and civil charges against bank owners and shareholders who are found guilty of having defrauded depositors.
DPC CEO John Chikura said in an interview in June this year that the delay by the central bank in withdrawing licenses of distressed banks allowed shareholders and management in the troubled institutions to strip assets, leaving very little for affected depositors.
“The delays by the Reserve Bank (RBZ) to close distressed banks gave shareholders and management time to strip assets. By the time it is liquidated, it’s a shell,” Chikura said, adding the RBZ needed to move swiftly when closing banks to protect the interests of depositors. “Let me give you an example; when Interfin went under curatorship in 2012 the gap was US$98 million, but when it was liquidated last year the gap had increased to US$158 million. This was an unnecessary increase of US$60 million.”