A PROBE into the Zimre Holdings Ltd (Zimre) rights issue debacle by the Reserve Bank of Zimbabwe’s anti-money laundering unit, Financial Intelligence Inspectorate and Evaluation Unit (FIIE Unit), is centred on whether NMB Bank used depositors’ funds when it underwrote the US$15 million capital raise and whether the money was already onshore, businessdigest has established.
Sources close to the developments said the FIIE Unit is keen on establishing whether the funds used to pay for the shares in Zimre were not funded locally before the closure of the rights issue and whether the financial institution used its own capital.
The investigation, according to sources, has taken a new twist and could see the financial instituition being caught up in the ongoing Zimre-National Social Security Authority (Nssa) fiasco.
“The investigation is headed by the FIIE Unit, a department in the RBZ. They want to establish whether depositors funds were not used to pay for the shares. Secondly, they want to follow the money and see if NMB was the actual underwriter. When they follow the money and discover that NMB’s account was already funded, then there is a problem.
“They want to establish if they did not use depositors funds. Under Basel, they are not supposed to touch depositors funds. This is the reason why indigenous banks failed in Zim. Most were usng depsitors funds to buy non core assets. If the transaction was above board, then there is no problem.”
Efforts to reach FIIE director Mirirai Chiremba proved fruitless as various numbers provided to the paper were said to be of people with a similar last name.
Chiremba heads FIIE Unit.
RBZ chief John Mangudya had referred all questions to Chiremba, but people who answered several of Chiremba’s said numbers said he was not the man in question. Other numbers were barred for incoming calls.
After the unfruitful search for Chiremba, Mangudya said he was personaly not dealing with the matter, but invited parties to approach his office for closure of the matter.
“I am not dealing with this matter. I understand it is being dealt with FIIE. But I am inviting all those wanting closure on this matter to approach my office,” he said.
This comes as it emerged that Securities Commission of Zimbabwe (Secz) is still looking into whether NMB Bank and Zimre Holdings Ltd (Zimre) as well as a consortium of the Rudland brothers Simon and Hamish — played by the book when the financial institution underwrote the group’s US$15 million rights offer early this year.
Secz CEO Tafadzwa Chinamo said he was still looking at the matter.
“The investigation takes a bit of time. We requested for information from the ZSE,” Chinamo said this week.
Sources told businessdigest this week that a ZSE members meeting was called off at the last minute. A member of the ZSE confirmed the Nssa/Zimre issue was on agenda at the meeting.
“The ZSE/Nssa deal was on agenda at that meeting but it didn’t happen,” he said.
Zimre’s other shareholders are questioning the rate at which NMB sold shares to the consortium of the Rudlands and feel that the bank was fronting for the businessman.
NMB is accused of withholding key information that could have influenced Nssa and the Government to follow all its rights in Zimre.
But the bank refused to comment when given an opportunity to respond to the allegations two weeks ago, citing bank/client confidentiality.
Secz CEO Tafadzwa Chinamo two weeks ago said Nssa had requested the securities regulator to look into the circumstances surrounding the acquisition of a 40% equity stake in Zimre.
Had the reinsurer made adequate disclosures on who was underwriting its US$15 million early this year, sources said Nssa would have followed its rights.
Nssa chairman Robin Vela told NewsDay two week s ago that the authority was “concerned with the rights issue” that saw the Rudland-led consortium becoming underwriters.
As at June 30, government and Nssa had 21,67% and 13,32% respectively in ZHL after they elected to follow part of their rights in the US$15 million cash call.
Hamish Rudland this week responded to businessdigest’s queries, saying he was out of the country last week and could not respond to our questions.
“These allegations by Van Hoogstraten are absolute nonsense, and he will have to answer to them in the courts as we will be bringing a case against him for defamation, he will have to prove his allegations against us in his defence, the truth will then come out,” Rudland said.
“Van Hoogstraten has a very chequered past with the law, from internet research, he has served time in prison in the UK, on murder charges. He does not live in this country and could well be harbouring British interests to destroy companies in Zimbabwe.
“Every company he is involved in is a complete disaster, and has been frustrated by his shareholding and inability to make decisions and bring capital to the table.
“Zimbabwe needs honest and sincere investors, he does not fall in this category. He claims to be a multi-millionaire, but cannot agree to bring his funding portion 1.3 million dollars to a rights issue at CFI!”
He accused Van Hoogstraten and Nssa of playing what he described as “petty political games in their quest to try to frustrate other shareholders” such as Zimre, the company’s largest shareholder with a 28% equity stake.
Rudland said Nssa represents the public and should act responsibly in making decisions that benefit all stakeholders.
“Their (nssa’)s internal failures in following their Zimre rights should not effect the operating units and minority shareholders of the companies they are invested in, the priority must be to get companies producing for all stakeholders,” said Rudland.
Zimre has been ready to recapitalise CFI, he said.
He said his co-director Aadil Adamjee has no criminal record, but did not comment on his brother, Simon and Adamjee’s 2006 arrest in South Africa.
“He is a highly respected member of his community and brings great value and experience to the Zimre board. The paper should report responsibly and do its research before printing damaging allegations against innocent people,” he said.
Rudland said he has been in business since the early 1990s, having bult from humble begnnnings.
“Unifreight today has a balance sheet in excess of 25 million dollars, and has realigned itself to deal with the tough environment, transport is a tough business, but the future is very good at Unifreight, unfortunately the market cap of most listed companies in Zimbabwe are very undervalued,” he added.