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RBZ to rule in ZABG dispute

Shakeman Mugari


A SIX-MEMBER independent panel investigating the controversial take-over of two commercial banks’ assets by the year-old Zimbabwe Allied Banking Group (ZABG) has presented its report to the central bank, now expected to make a ruling in a case in whi

ch it is an interested party.

The Reserve Bank of Zimbabwe (RBZ) is expected to make a ruling within the next two weeks, according to a private undertaking made by RBZ governor Gideon Gono to the panel, sources said.

The panel completed the report on its findings on the dispute last week.

The panel’s report will put to rest a two-year dispute between the RBZ and the collapsed Trust and Royal banks, which allege the central bank facilitated the illegal take over of their assets by ZABG, in which the RBZ is the controlling shareholder.

The RBZ was earlier this year forced to appoint an independent panel after the two banks challenged their closure and forced inclusion into ZABG.

They have since taken the RBZ and the curators appointed to run the commercial banks to court.

The curators were accused of colluding with the central bank to sell their assets to ZABG.

The Supreme Court last year ruled as “unlawful, null and void” the disposal of Royal and Trust Bank’s assets by the curators.

Sources this week said the panel had handed its findings to Gono who is now expected to make a determination on the issue within the next two weeks.

The source told businessdigest that the governor was now planning a meeting with the panel to discuss the contents and implications of the report.

That meeting is likely to take place next week when South Africa’s corporate governance guru, Mervyn King, and former Zambian central bank governor, David Phiri, who were key members of the panel, arrive in the country.

King is currently in New York but is expected in the country next week, the same time Phiri is also expected in.

“Once these two arrive, the full panel will meet with Gono to discuss the contents of the report,” said the source.

“The panel will give Gono a briefing on the implications of the findings. A determination is expected thereafter,” a source said.

Sources said indications were that the report would recommend the return of Trust and Royal banks assets, a move that would put ZABG in the lurch.

In any case, the Supreme Court had already made the ruling in favour of the two banks’ shareholders. The ruling said ZABG was operating with assets unlawfully acquired from the closed banks.

If ZABG is stripped off its assets, it would become a shell company and consequently close down, a prospect experts said was unlikely as it would spoil Gono’s pride as the architect of the project.

There was also a possibility that Trust and Royal shareholders could claim ZABG’s profit made through their assets.

The closed banks are already working on a comprehensive post-ZABG plan in anticipation of a favourable outcome.

The two banks have already agreed on a new shareholding structure but say they will maintain the current workforce and branches if reopened.

The new entity would be known as Trust-Royal Bank.

“ZABG has nothing. It has no assets of its own,” said one of the sources involved in the talks.

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