Tetrad board, judicial manager fight as bank faces liquidation

Tetrad board, judicial manager fight as bank faces liquidation

By Chipo Musoko, HARARE, April 20 (The Source) – The board of Tetrad Holdings are challenging the call by the provisional judicial manager of its banking unit to liquidate it, accusing him of refusing to engage with the potential investor.

Last month irate creditors of Tetrad Investment Bank gave shareholders a month to finalise injection of fresh capital by a Russian investor or they would vote for its liquidation.

This was after the central bank last November suspended the insolvent institution from undertaking banking activities while it implements a Scheme of Arrangement sanctioned by the High Court last September when it persistently failed to honour maturing liabilities, including depositors’ funds.

At an earlier scheme meeting last year, creditors voted for a moratorium to protect the bank’s assets pending finalization of a reported $200 million rescue deal by Horizon Capital Consortium made up a Russian investor Sergey Pokusaev, the Zimbabwe government and other local investors.

However, during the first creditors’ meeting on March 11, attended by hundreds of angry and mostly elderly depositors, provisional judicial manager, Winsley Militala of Petwin Executor and Trust Company cast doubt on the deal.

The creditors are supposed to meet on April 22 to get feedback and to chart the way forward but the board of Tetrad on Monday issued a statement challenging Militala’s report circulated to stakeholders after he recommended a vote to liquidate the bank.

“In our opinion Winsley Militala has failed completely in his attempt to discharge his obligation. For example, although prior to the first creditors meeting he had met with representatives of Horizon, he has failed to meet with them at any time since,” the directors said in a statement to the press.

The board quotes sections of Militala’s report in which he said he had not met with the potential investor.

“At the time of concluding this report, I was yet to meet with Horizon. The advisors to the transaction had initially requested for a meeting and unfortunately failed to show up instead they sent a letter requesting numerous banking information which is being attended to,” Militala said.

“There are no re-capitalisaition initiatives or other forms of intervention that are currently being considered save for the Horizon transaction. The deal according to the members and a local representative is still on the cards though no date of conclusion has been intimated.”

The board claimed Militala had cancelled or failed to attend three meetings arranged with Horizon.

“He has been invited to physically inspect the financial instruments in Horizon possession that would provide the necessary injection of capital to enable the bank to survive,” the Tetrad board said.

“He has not done so and he has now indicated in writing that he is extremely reluctant to meet with any representative of Horizon, not — it would appear — for reasons associated with any discharge of his duties, but for personal reasons related to his own comfort.”