Seniors suffer as Tetrad saga leaves hundreds without life savings

Seniors suffer as Tetrad saga leaves hundreds without life savings

By Chipo Musoko, HARARE, March 13 (The Source) – The Tetrad creditors’ meeting last Wednesday had a distinctly senior look, unsurprisingly so considering the sizeable number of pensioners who saved and invested with the institution.

Hundreds of them, some struggling to walk and being helped by aides, turned up at the Harare International Conference Centre with the hope of discovering the fate of their investment locked up in the troubled bank.

 

Courtroom drama

The Master of the High Court, Eldard Mutasa and his deputy, who presided over the proceedings which turned the gigantic HICC into a courtroom, said the meeting had been moved from the High Court due to the huge number of creditors who could not be accommodated even in the biggest room at Mapondera Building.

He said  the court received 400 claims from Tetrad bank creditors and read them all out before inviting the judicial manager, Winsley Militala to give his report, which left the creditors shocked.

Militala said the Russian investor that the company had been touting since last year had not given a firm commitment and that the bank should be liquidated.

“The money I have is not enough to pay creditors. I collected $100,000 since I took over one and a half months ago,” Militala said.

He said the bank, which was stopped from taking deposits by the central bank last year had assets worth $43,5 million while liabilities stood at $69,8 million, making it insolvent.

 

Angry creditors bay for blood

Taking to the floor one after the other, the creditors including lawyers representing some who were absent, narrated their challenges and frustrations since the closure of the bank last year.

“Tetrad traded for four years while insolvent. We want the directors prosecuted. Please consider lifting the corporate veil, they also breached the Company’s Act,” said one creditor.

Militala concurred that an interrogation must be conducted to recover the bank’s assets and for prosecution of  “anyone who caused the bank’s failure.”

Others called for a forensic audit to unearth the goings on at the bank but later changed their minds after some creditors said the exercise was expensive and would delay the liquidation process to salvage whatever remained.

“It is clear we will be simply wasting our time and money because once we extend the period (under judicial management), it will increase costs and diminish the dividend, especially to unsecured creditors,” said another creditor.

“The people running Tetrad cannot be trusted in the way they dealt with deposits. Last year when we agreed to a scheme, they said assets were worth $85 million and liabilities $83 million and now the judicial manager says they are worth $43 million. Where has the money gone and how come the liabilities have gone down to $63 million,” asked Mike Hamilton, a public relations practitioner and one of the creditors.

The finance director, Thomas Chimanda said the loan book had been reduced as some payment plans had been agreed. He also said the scheme chairman, retired Justice George Smith had asked creditors to allow the bank to pay some with medical expenses and those in desperate situations.

Group chief executive, Eugene Mlambo said management had made suggestions to Militala which were not taken aboard and that they were willing to provide more information on outstanding issues.

“We are prepared for a forensic audit to be done. We can write a report to clarify issues raised,” he said.

 

Shareholder pleads for patience

One of the bank’s shareholders, Harry Orphanides pleaded with the creditors not to liquidate the bank.

“Liquidation means the investor will walk away. Go for final judicial management and give the investor time to recapitalize the bank. I urge you do not go for liquidation at this stage, think of this very carefully,” he pleaded.

Creditors were adamant that they wanted the bank liquidated after being given empty promises for too long.

“We are not interested in dummies sold to our clients for a long time. They are not interested in the new investor and where is the investor anyway? Our clients want to minimize further costs. Time is up, we should share what is there,” fumed one lawyer.

Victoria Ndoro, representing 120 workers who are owed $480,000 retorted: “We have been hearing different stories for the past two years. If we go under liquidation most of us will be lucky to get 10 cents for a dollar,” she said.

Another creditor representing Innscor Africa Holdings subsidiary, Irvine’s said: “There is a moral issue, the directors should be held accountable. The majority of people here are pensioners and are not being taken seriously.”

The creditors raised a red flag on the proposed investment by Horizon, a consortium made up a Russian investor, government and other local investors.

“If anybody thinks the investor coming in will solve the problem, take note of Kingdom (Financial Holdings). It got an investor and still went down and costs had increased. We have to cut our losses. All delays are in favour of management,” said the creditor.

Militala concurred that the investor was rather elusive.

“The foreign investor has specific days of coming either Thursday or Sunday. If he is in the country, he is yet to see me as the judicial manager,” he said, describing the meeting he had with the local representative of Horizon as “not the best of meetings I have ever had in my life.”

“We would hold numerous meeting as to when the investor is coming. I advised them that what I wanted from the investor was something bankable, an irrevocable letter of undertaking, stating the amount and timeframe,” he said.

“I insisted that for me to go for final judicial management there must be a cause.”

During the meeting, Orphanides and another creditor fought over a microphone.

 

Seventy-three year old pensioner loses $51,000

“I am 73 years and I have a 38-year old handicapped child I take care of and I  am not prepared to accept 10 cents in a dollar. I don’t care whether its Horizon or sunset, I want my $51,000. I give them one month,” said the pensioner who said she had lost her lifetime savings.

Hamilton questioned the existence of the investor.

“Last year we were asked to google the name of investor and I could only get a small village shopkeeper. When I googled Horizon, I only found local articles about it,” he said.

“Now we are told the investor is in the US but we were told Horizon is a locally registered company and that one of the investors is the government. Who are the local investors? If government is one of them, why are they not saying so?”

Another creditor said: “This investor Master (of High Court) is non-existent, it’s high time citizens accept facts as reality. Where is he, who is this investor? If you postpone you are simply doing it for nothing. We are asking for the mismanagement of the bank to continue. It’s better to bite the bullet now and protect other Zimbabweans in future.”

The creditors eventually gave the Russian investor one month to inject fresh capital into the troubled bank or they would vote for its liquidation, a position supported by Mutasa, the Master of High Court.

“It looks like the general position is that we extend the return day (for a judge to rule on whether to liquidate or put the bank under final judicial management) and the investor be given a month,” said Mutasa.