ZIMBABWE Cricket (ZC) has received a reprieve for its US$19 million debt after the Zimbabwe Asset Management Company (Zamco) agreed to service the non-performing loan at lower interest rates, although question marks remain over the long-contentious funds.
By Enock Muchinjo
Zamco was established four years ago by the Reserve Bank of Zimbabwe (RBZ) to acquire, manage and restructure bad loans.
The Zimbabwe Independent can exclusively report this week that Zamco will pay off four banks owed by ZC — Metbank, CBZ, Ecobank and NMB — with the cricket governing body set to transfer its loan repayment responsibility to Zamco at an interest rate of 6,5%, down from some 10%.
The total amount of the debt taken over by Zamco amounts to slightly over US$15 million, although ZC’s overall loan is fixed at around US$19 million, including money owed to the International Cricket Council (ICC).
A 2018 ZC budget planner leaked to us shows that Metbank initially declined entering the Zamco deal due to disagreement over discounted rates with the national special purpose vehicle — initially established by government in 2014 as “part of holistic measures to deal with the problem of rising non-performing loans (NPLs) in the banking sector.”
Metbank had demanded to be paid off the full amount of nearly US$5 million at no discount, which was later agreed upon, paving way for the Zamco arrangement to sail through.
“ZC is pleased to inform the board that Zamco has successfully absorbed the loans from Ecobank, CBZ and NMB with the exception of Metbank,” reads the document.
“Metbank has advised ZC that they are willing to take over their loan balance to Zamco if ZC would pay off the discount; if the board approves ZC to pay off the discount the effect is that ZC loan balances will increase +/-700k. Unfortunately the discussions with ZC failed.”
Meanwhile, the document reveals that ZC repaid the ICC US$2,2 million in January this year as part of its loan payment plan, despite well-placed sources disclosing to Independent that players were told during a meeting with management last week that US$3 million had in fact been settled with the world cricket body in July 2014 as part of holistic measures to deal with problem of rising NPLs in the banking sector
The meeting with players, addressed by ZC chairman Tavengwa Mukuhlani in the presence of senior staffer Givemore Makoni, was held at Takashinga Cricket Club last week in reaction to the prospect of a strike by players — who are owed salaries, allowances, match fees and bonuses.
The players have threatened to boycott the home tri-series with Australia and Pakistan in July if they are not paid.
“The financial situation is a mess right now,” said the source. “Conflicting statements are being given to people, and the players are very, very worried.”
A few more eyebrows were raised when players were told that ZC had been paying US$3 million each year to service its bank loans, in finance costs alone, at an interest rate of roughly 10%.
ZC, it was said, had been forced to go the Zamco route because it was in deep financial trouble and struggling to service the loan principal — which has remained stagnant for years.
Meanwhile, in another twist to the controversy surrounding Zimbabwean cricket funds, a suspicious-looking loan of US$2,4 million, said to be owed to Metbank over and above the original agreed debt, was discovered and noted in an audited report also seen by this paper.
“There is a contingent of US$2 400 000 being the amount claimed by a bank as due to them over and above the amount reflected in these financial statements. ZC has not assumed this amount due to insufficient evidence and consultations are being carried out with the bank,” notes the audit report.
Curiously, a top source at Metbank told the Independent that during the same period, a top-ranking official within ZC (name given) had individually applied with the bank for a loan of exactly the same amount, to finance his private business interests.
The loan was not approved.
“Could this have been a coincidence? One can never know,” remarked the source.
We were unable to establish how ZC will guarantee the payment scheme with Zamco at the time of writing.
Calls have grown louder for the institution of a forensic audit to establish how ZC accumulated such debts, when standards in the game have gone down drastically for a decade and half now — with players and staff regularly going unpaid for several months.