HomeBusiness DigestCentral bank lifts ban on ReNaissance shareholders

Central bank lifts ban on ReNaissance shareholders

THE Reserve Bank of Zimbabwe (RBZ) has lifted a ban barring former ReNaissance Financial Holdings Ltd (RFHL) CE Patterson Timba and other senior officials of the group and shareholders from holding at least 10% in any financial institution. This comes five years after a corrective order was issued on them.

Bernard Mpofu


Timba, Dunmore Kundishora and Tatenda Madzingo, among others, were slapped with restrictions for running down the financial institution.

The move came after a central bank-sanctioned investigation concluded that ReNaissance Merchant Bank, a unit of RFHL was insolvent to the tune of US$16,6 million.

The probe also accused Timba and other officials of a litany of charges which include violating the Banking Act, a collapse of corporate governance highlighted by the inadequate separation of ownership from management and poor risk management practices. The apex bank also alleged that RFHL’s major shareholders had orchestrated an elaborate scheme to siphon depositors’ funds through an irregular call account maintained at RMB. The RBZ further claimed that insider and related party exposures constituted 24% of total loans while non-performing insider loans accounted for 21% of the loan book.

According to a letter written by RBZ director in charge of bank supervision, Norman Mataruka, the corrective order has since been withdrawn.

“Please be advised that the Reserve Bank of Zimbabwe has reviewed the Corrective Order issued to ReNaissance Financial Holdings Limited, its staff and shareholders ….We write to advise that all previously imposed restrictions on the following are hereby uplifted: Bethel Trust, Patterson Timba, Dunmore Kundishora, Tatenda Madzingo, Norest Kwete, Lydia Timba, Shepherd Muzivi, Lovemore Moyo and Dr Robert Tindwa,” said Mataruka in a letter dated February 26, 2016. “The upliftment means the matter currently before the Administrative Court will be withdrawn; each party meeting its own cost.”

Following the corrective order, Timba through his lawyers, Muza and Nyapadi, took the central bank to the Adminstration Court challenging the charges that were raised after the probe.

In September 2014, the lawyers wrote to the RBZ requesting the unconditional removal of the restrictions, arguing the measures were “primarily issued in response to allegations of fraud and abuse of depositors’ funds made by a third party”.

“The issue of the alleged abuse of depositors’ funds by RFHL at the instigation of its founders was resolved as RFHL was able to settle its overdraft with ReNaissance Merchant Bank Ltd within the time frames imposed by the regulators in terms of the corrective order.

“In the circumstances, no depositor suffered any loss as had been feared through the actions of RFHL and/ or its senior executives and other staff members,” reads a letter written to Mataruka before the lifting of the restrictive measures.

“On the basis of the above, our clients believe that the new facts exist which might not have been available to the Reserve Bank at the time the restrictions were imposed in terms of the Corrective Order to warrant a review and removal of all restrictions imposed on the above named parties.”

The lawyers also said Timba and other shareholders had secured US$140 million to inject into the business from a company called Surya Capital and a Singapore-based firm at the time the measures were imposed.

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