DPC sues failed banks’ executives

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The Deposit Protection Corporation (DPC) has started taking legal action against shareholders and directors of banks whose institutions failed due to poor corporate governance. DPC chief executive officer John Chikura said this in Bulawayo said DPC recently started suing of shareholders and directors and these court cases are playing out in the courts. About eight banks have collapsed in recent years due to alleged lack of corporate governance and corruption among other issues. The banking institutions that have failed recently include AfrAsia Kingdom (formerly Kingdom Bank), Tetrad, Royal Bank, Interfin Banking Corporation, Trust Bank, Allied Bank and Genesis. Chikura said the DPC has since issued summons to shareholders and directors of Royal Bank, Trust Bank and Interfin while others were being worked on. Royal Bank was majority-owned by Jeff Mzwimbi and Simba Durajaji, Trust Bank by William Nyemba and Interfin by Farai Rwodzi, Jeremiah Tsodzai and Ray Njanike. – The Herald, 2 August 2017

There are growing fears that CFI Holdings, once a blue chip counter on the Zimbabwe Stock Exchange may lose mills at subsidiaries AgriFoods and Victoria Foods, amid mounting debts at $55 million and an urgent demand for recapitalisation. The fears are based on mounting pressure on the judicial manager for AgriFoods and Victoria Foods, to act, possibly by way of disposing of some assets and get funds to pay creditors. Losing the mill spells death for CFI, according to director Hamish Rudland, majority shareholder in Zimre Holdings. Zimre Holdings and the National Social Security Authority teamed up to form Stalap Investments to wrestle control of CFI from Nicholas Van Hoogstraten. Disposing off the mills is clearly not an option for Stalap but the worry is on the other shareholder, Van Hoogstraten. CFI requires at least $30 million recapitalisation over the next five years, according to director Mr Hamish Rudland but shareholder bickering has taken centre stage ahead of emphasis on a turnaround strategy to boost performance and profitability. – The Herald, 2 August 2017

The ongoing cash shortages in the economy have forced several manufacturing companies to seek foreign currency from illegal dealers popularly known as “osiphatheleni” so as to procure raw materials. This has added a cost burden on producers, industry experts say, which has a negative effect on the competitiveness of local companies, who are already constrained by a myriad of cost drivers. This emerged during a National Economic Consultative Forum (NECF) dialogue on pricing in Bulawayo where industry and commerce executives urged monetary authorities to come up with measures to cushion the productive sector to foster economic growth. – The Herald, 2 August 2017

Zimbabwe Platinum Mine’s (Zimplats) revenue for the quarter ended 30 June 2017 increased 9% to $143.59m compared to $131.26m in prior quarter. In its quarterly update, Zimplats said the growth in revenue was mainly due to the 16% increase in 4E metal sales volumes. The growth was however partly offset by a general decrease in metal prices. Platinum prices for the quarter were down 4% to $941 against $981 in the quarter to March. Profit from operations after royalties decreased by 28% to $30.3m from US$42.2m reported in the previous quarter. – Financial Express (Online)

By |August 2nd, 2017|Categories: Headlines|

About the Author:

Kudzanai Sharara
Kudzanai’s background in financial journalism with ZFN, combined with a continuing education in financial management, provide a solid grounding for his work in the research department.