A MAJOR rift has emerged among ZABG board of directors on whether the bank should continue to operate or shut down after a Supreme Court ruling in September that the bank was operating with illeg
ally acquired assets.
The board of directors is at loggerheads on what move to make after the court ruled that they were operating with assets unlawfully acquired from Trust and Royal Bank in the controversial takeover sanctioned by the Reserve Bank of Zimbabwe (RBZ) earlier this year.
Sources said one camp on the board is pushing for the closure of the bank pending a decision by the central bank, while the other is arguing that they must “wait and see”.
At one of the meetings held last month some directors, sources say, warned that by continuing to operate with unlawfully acquired assets they were risking serious lawsuits. The owners of Trust and Royal are contemplating suing the directors in their individual capacities, a move that could financially cripple most of them. It is understood that Royal lawyers are also mulling making a criminal complaint to the police against the directors.
There are other members of the ZABG board who are arguing that the bank should wait and see RBZ’s next move regarding the issue. One director told businessdigest last week that the gulf was widening as some of the directors now fear for their personal estates which are likely to be endangered if they are sued in their individual capacities.
“We cannot agree on what to do with this matter. We just don’t have a common position on the issue,” said the director.
It emerged on Monday that some board members were considering stepping down but are afraid of a possible backlash from the central bank.
The source said some of the board members are battling to pay back massive productive sector loans that they got from the Reserve Bank and are afraid that the central bank might call them in upon their resignation.
The divisions on the board come amid revelations this week that the central bank is also using delaying tactics to prolong the life of the troubled bank which would collapse if it returns the assets to Trust and Royal Bank – who the Supreme Court said were the rightful owners.
The central bank has since appealed to the Supreme Court seeking to overturn an earlier High Court order compelling it to make a decision on the asset dispute between ZABG and the collapsed banks. – Staff Writer.