HOME Affairs minister Obert Mpofu recently lost a battle to block the High Court from forcing him to surrender some of his properties in his sprawling yet now collapsing business empire to the Deposit Protection Corporation (DPC) which is involved in liquidating his now-defunct Allied Bank Limited.
DPC was established by government to protect depositors against loss of their insured deposits in financial institutions, including banks. Besides compensating depositors in the event of a bank failure, the DPC actively participates in the resolution of failing or failed financial institutions and liquidation of closed banks. Mpofu had been resisting DPC moves to take control of six of his properties valued at about US$17 million through frivolous and vexatious court processes.
In his latest failed bid to block the DPC from sequestrating the assets, Mpofu claimed the initial court judgment against him had been granted erroneously. However, High Court judge Justice Nyaradzo Priscilla Munangati-Manongwa dismissed the application with costs.
This came as authorities in South Africa lodged an 87-page high court bid to go after personal assets of executives accused of looting VBS Mutual Bank – which is currently under curatorship – of more than R1,5 billion in a fraud scheme of epic proportions. Some of the executives lived the high life of billionaires, raiding depositors’ money to purchase mansions, sports cars and a helicopter.
In a strongly-worded court application, the South African State gave a clear indication that it wants recover every cent of depositors’ money lost through the large-scale fraud.
The biggest victims of the fraud were 21 municipalities, community members and businesses in Venda region as well as the Public Investment Corporation. Curator Anoosh Rooplal brought an urgent an application in the Johannesburg High Court this week to have the bank’s executives and their companies sequestrated; taking legal possession of the assets.
Rooplal said more egregious than the perpetration of plunder of such enormity was that the looting was orchestrated by top VBS executives.
This is familiar to Zimbabweans.
Before the multicurrency system in 2009 which brought macro-economic stability and recovery, a number of banks had collapsed. After that eight banks — Genesis, Capital, Interfin, AfrAsia, Tetrad, Royal, Trust and Allied — also went under prejudicing depositors of their hard-earned cash, savings and destroying public trust in banks. The bank failures were due to poor corporate governance, mismanagement and corruption. Instead of policymakers focusing on keeping the banks afloat as they did during the global financial crisis, governments must now come up with punitive measures to deal with fraudulent bankers. More so in this country where vulnerable depositors not only work hard for the money but also suffer to withdraw it from banks.
It is ridiculous that executives who run down banks by abusing depositors’ funds in Zimbabwe serve a shorter jail sentence than livestock thieves. Depositors’ funds, no matter their quantum, should be protected from greedy and parasitic bank executives who lead lavish lifestyles they can’t afford at the expense of their clients. Zimbabwean bankers must learn it the hard way like jailed international bankers Kweku Adoboli, Nick Leeson and Tom Hayes.