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Zim bank grouping in dock
01/02/2005 10:14 - (SA)
Harare - A brand-new umbrella grouping of collapsed Zimbabwean banks got off to a rocky start after one of its partners went to court to try to break free from the new banking group, a daily said on Tuesday.
The Royal Bank - one of the three collapsed banks to be merged into the Zimbabwe Allied Banking Group (ZABG) - filed a suit in the Harare High Court on Monday against a central bank decision to place it under curatorship and subsequently merge it in the ZABG, the state-owned Herald said.
The ZABG, which started operations on Monday in 22 branches across the country, comprises the Royal, Barbican and Trust banks which were closed down last year.
In its suit, the Royal Bank is seeking to bar the central bank from "using its premises, vehicles and other assets in the new project".
It is also seeking to bar all advertisements in which Royal Bank is identified as part of the ZABG and against "the placing of ZABG employees in the offices of Royal Bank or retrenching the employees of Royal Bank".
The case was filed by Royal Bank chief executive Jeffrey Mzwimbi and executive director Simba Durajadi who themselves are accused of defrauding the bank of millions of dollars.
Their suit argued that the merger of the Royal Bank in the ZABG "has been carried out without any consultation with the directors, shareholders, creditors and depositors".
They also claimed that the central bank had grossly misrepresented and undervalued the Royal Bank's assets.
The central bank, which came up with the ZABG to invigorate and clean up the country's crisis-ridden financial sector, plans to take in more collapsed banks in the umbrella body provided they meet certain criteria.
Central bank governor Gideon Gono, the chief architect of the ZABG, did not react to the suit, but simply told the Herald: "We will meet them in court."
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