TETRAD Investment Bank creditors are fuming over the delay by the Deposit Protection Corporation (DPC) to audit the bank, saying it is prejudicing them, businessdigest has learnt.
Tetrad, the last merchant bank in the country’s financial services sector, which went under due to bad loans, poor corporate governance and mismanagement, was declared insolvent in August 2015 with its capital standing at US$51,7 million as of August 31.
Creditors opted for a debt-for-equity swap in a last-minute attempt to breathe life into the troubled financial institution after the bank’s judicial manager, the DPC, proposed the do-or-die arrangement.
The DPC was mandated by creditors to carry out an audit on the bank to establish if the directors and shareholders abused depositors’ funds and to sue them if they are found wanting.
“The DPC is not taking our plight seriously,” one creditor told businessdigest. “The longer they delay in establishing what caused the collapse of the bank, the more we are going to lose out, which is grossly unfair.”
Another creditor said they were “puzzled” by DPC’s delay.
“We do not know why the DPC is dragging their feet on the issue of auditing Tetrad. The forensic audit could be important in that it could help recover some money for us.”
Sources told businessdigest that the DPC wrote to the Reserve Bank of Zimbabwe late last year to get permission to audit not only the bank but Tetrad as a whole.
“The DPC has asked for the go-ahead to audit Tetrad Holdings as this will give them a clearer picture of what has happened with depositors’ funds than just auditing the bank,” an insider said.
“The DPC has been in talks with KPMG (South Africa) for them to conduct a forensic audit on Tetrad as mandated by creditors of the bank but the Reserve Bank has not yet given the go-ahead which means the DPC is stuck on the matter.”
Contacted on the issue, DPC CE John Chikura declined to comment,
“It is not prudent for me to comment on that, all I can say is that the process is ongoing,” Chikura said.
The DPC has also completed a forensic audit on the failed AfrAsia Bank which closed in February 2015, leaving thousands of depositors in the cold.
The forensic audit on AfrAsia was done by Grant Thornton and has been completed with the report now in the hands of the DPC lawyers.
The DPC is in the process of compensating depositors of failed banks which include AfrAsia, Allied Bank, Genesis Investment Bank, Capital Bank, Trust Bank and Tetrad.