Harare Bureau
THE Deposit Protection Corporation Zimbabwe has taken over the provisional judicial management of Tetrad Investment Bank, following the resignation of Winsley Militala in a step towards liquidation of the bank.

In a statement, the Reserve Bank of Zimbabwe said “within the framework of promoting the balance between the multiple interests of depositors, shareholders, potential investors and other creditors, appointed the Deposit Protection Corporation as the Provisional Judicial Manager of Tetrad Investment Bank Limited to oversee the day to day management of the bank.”

However, sources at the Reserve Bank said a meeting held recently between shareholders of the bank, central bank officials and Militala “seems to have concluded that no investors were likely to come on board”.

The RBZ had given Tetrad a deadline of April 2 to come up with a credible recapitalisation plan for the bank.

Tetrad was negotiating with Horizons Capital Consortium and AAY Investment to inject capital into the bank.

The bank was placed under provisional judicial management in February this year following the expiry of its scheme of arrangement meant to recapitalise operations.

According to the judicial manager, the bank was crippled by related party loans. He said related party loan balances of $19 million accounted for 76 percent of the unsecured loan balance of $25 million as at end of 2014, with no security to recover the balances.

“Following the complaints that the provisional judicial manager was frustrating the recapitalisation process, the central bank became so concerned and called for a meeting to hear the matter from all parties,” said one source who requested anonymity.

“During the meeting, the shareholders seemed to have failed to prove that there were serious investors. Besides, RBZ had given the bank up to April 2 to recapitalise and there is nothing concrete with regard to the issue.

“This is how the DPC is now coming in; technically as provisional judicial manager until the return date of August 6 when the bank is likely to be placed into liquidation.”

The source said the hand-over/take-over process would begin next week Monday.

Militala confirmed that he had stepped down, but referred further questions to Reserve Bank governor John Mangudya.

As at May 31, the bank’s liabilities exceeded assets by almost $30 million while cash position was around $500,000.

Money recovered during the judicial management was $650,000. At the holding level, Tetrad intends to reduce loans owed by related parties through disposal of THI Insurance, but the deal is yet to be finalised, the source said.

Some properties which have been pledged to the National Social Security Authority have been foreclosed.