BARBICAN Holdings Ltd (Barbican) this week literally blew the whistle on itself when it failed to provide local currency for the foreign currency it was allotted on the auction floor, putting
it squarely under the Reserve Bank of Zimbabwe (RBZ)’s spotlight.
The issue was also compounded by problems at their asset management company which failed to provide adequate information to meet new requirements set by the RBZ.
It is reliably understood that top managers at Barbican Asset Management were aware that the firm was on the brink of collapse and took their time to register the company under the new RBZ regulations.
This apparently led to their disqualification from the auction floors and their subsequent shutdown on Monday.
Barbican Bank has since been placed under curatorship after the RBZ discovered that it was facing a financial crisis.
According to the Reserve Bank, Barbican Asset Management will also be “liquidated and proceeds applied to pay depositors and creditors”.
Sources privy to the events say the Reserve Bank’s Supervision and Surveillance Unit swung into action after Barbican Bank failed to honour its obligation to the central bank.
Barbican Bank had last week successfully acquired foreign currency from the auction.
However on Monday the bank is understood to have failed to pay the equivalent amount in local currency for the hard currency allocated to them at the auctions last week.
Barbican also failed to produce a guarantee that they had the local currency to pay for the foreign currency that was going to be allocated to them on Monday.
According to sources this was a “tip-off” to RBZ officers who immediately began investigations into the bank.
The investigations revealed that the corporate bank and the asset management division were facing liquidity problems.
The inves-tigations revealed that the bank was no longer ina sound fin-ancial position due to undercapitalisation, poor corporate governance and violation of the Exchange Control regulations.
Analysts say the poor timing in the options trading that the company has been dealing in could have triggered the crisis in the asset management firm.
“They might not have been fully covered. They were one of the biggest players in the derivatives market. There is a strong possibility that they were having ‘naked’ options,” said an analyst from a local financial company.
Barbican Holdings was on Tuesday suspended from the Zimbabwe Stock Exchange.
Barbican’s chief executive officer Mthuli Ncube could not be reached for comment, and is believed to be in South Africa.