Deposit protector moves into AfrAsia, starts paying $4,5mln

Deposit protector moves into AfrAsia, starts paying $4,5mln

By Chipo Musoko, HARARE, April (The Source) – The Deposit Protection Corporation (DPC) has moved into the collapsed AfrAsia Bank after being granted a provisional liquidation order by the High Court and has started paying out $4,5 million to depositors whose funds were locked in the bank.

The central bank in February cancelled the bank’s operating licence after determining that the financial institution was no longer in a sound financial condition. This was after its shareholder AfrAsia Zimbabwe Holdings Limited voluntarily surrendered the banking licence.

DPC was established in 2003 through an Act of Parliament to compensate depositors in the event of a bank’s collapse using premiums paid by banks and pays out a maximum of $500 per depositor, while those with higher balances are paid after completion of the liquidation process.

The High Court placed AfrAsia under provisional liquidation on March 18 and the return date is April 29.

“We moved into the bank a week ago to look at the state of affairs and to verify its depositors and assets.  The provisional liquidation order allows us to secure assets of the bank,” DPC chief executive John Chikura told The Source on Tuesday.

He said the DPC had engaged Grant Thornton’s Reggie Saruchera as its agent to liquidate the bank. The agent is currently compiling all records, including information about creditors, debtors, assets and would use independent valuators for the process.

In the meantime, Chikura said, the DPC had started paying depositors $500 each while the balance would be paid once the liquidation process had been completed.

“We have started paying depositors $4,5 million and the balance will be paid once we have sold the bank’s assets. At the moment we are waiting for the final liquidation order from the court and valuation of assets,” said Chikura.

He said different methods including mobile services were being used to make payouts.

According to statistics from DPC, AfrAsia Bank had 24,163 depositors but the figure is subject to the on-going verification.

DPC is also in the process of paying creditors of other collapsed banks – Trust, Genesis, Capital, Allied Bank and recently Royal Bank following the disposal of its assets worth $3 million versus liabilities of $9 million.

The fate of Tetrad Bank, which is under judicial management will only be known at the end of this month when its creditors meet after shareholders promised to bring in a new investor.

Mauritius-based financial services group, AfrAsia Bank Limited has since pulled out of Zimbabwe leaving the two remaining subsidiaries – microfinance firm MicroKing up for sale while the asset management firm, AfrAsia Capital Management (ACM) faces an uncertain future.