Cape Town - African Bank Investment Limited (Abil) said on Thursday that after paying all its creditors in full to the tune of R1bn, the company still has cash reserves of R250m.
This follows the successful implementation of the adopted business plan and the end of business rescue proceedings of Abil, the board announced in a statement.
Former business rescue practitioners John Evans and Dawie van der Merwe said as a result of the successful business rescue process the company is no longer distressed and can continue to operate as a going concern.
The company is an investment holding company, with income generated through dividends received from its 100% owned subsidiary, Standard & General Insurance Company (Stangen), which is in a strong financial position with reported equity of R1.1bn as at September 2015.
"We believe we have succeeded in an optimal outcome for Abil's creditors without jeopardising the future of the company. Our ongoing involvement will also provide continuity in the coming months until a new board is constituted following the AGM," said Evans.
"Although the business rescue proceedings are completed, the former business rescue practitioners will in the interim manage and safeguard the assets of Abil on behalf of its board, ensuring an orderly handover to the new board and once appointed, new executive directors of the company.
"The former practitioners will continue to assist the board to compile and publish the company's interim results by the end of June and to convene an AGM as soon as possible thereafter," the business rescue practitioners said.
Abil shareholders will have the opportunity to vote on the appointment of a new board and confirm a name change for the company among other items at the AGM.
The latest announcement follows the release earlier this month of the findings of the Myburgh Report on African Bank Limited, which found that although there was no evidence that the business of African Bank Limited was conducted with the intent to defraud depositors or other creditors of the bank, the business of the bank was conducted negligently in certain respects.
The report found, among other things, that the business of the bank was conducted negligently by not making prudent, appropriate provisions from time to time, not properly managing reasonably foreseeable risks such as a poor economy, competition and labour unrest and by aggressively growing the book.
It was also found that the board members were negligent in allowing themselves to be dominated by Leon Kirkinis, CEO of Abil and the bank.