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Africa Moyo
THE Deposit Protection Corporation is pulling all the stops to pursue Interfin Bank’s “doubtful debtors” who borrowed a combined $150 million as the debtors allegedly hid their assets.
The funds are largely considered unrecoverable.
Interfin was placed under provisional liquidation in January after failing to secure $50 million in fresh capital during a three-year curatorship period despite reported interest from 12 potential suitors.
The bank was rocked by insider loans and related party loans amounting to $90,6 million as at January 27, 2015.
Weak loan origination procedures also resulted in a number of loans being issued with no security or proper documentation.
Almost 52 Interfin debtors with outstanding values estimated at $88, 2 million could not be located by the Sheriff while a measly $2,5 million had been received in partial and full payments.
Interfin was placed under final liquidation by the High Court on March 4, 2015 and DPC was confirmed as the final liquidators.
Already, there are indications that the DPC might pursue ex-Interfin directors if it is proved that they were “reckless and or negligent in the discharge of their oversight responsibilities over the banks’ activities”.
DPC public relations manager Mr Allen Musadziruma said the Corporation will make concerted efforts to recover money from doubtful debtors.
“Any amounts collected will be paid to depositors as an additional dividend,” he said.
It is believed that out of a loan book of $167 million, the DPC has realistic chances of recouping a meagre $17 million.
The liquidator will also sell other assets at book value and deduct liquidation expenses as well as pay preferred creditors. The amount available to concurrent creditors will be US$18, 5 million.
The DPC noted that sound corporate governance practices could help instil confidence in the banking public.
“As a part of the financial safety net, DPC in collaboration with other key stakeholders will continue to advocate for the implementation of good corporate governance in line with the National Code on Corporate Governance and strengthening of the regulatory and problem-bank resolution framework in an effort to protect depositors from bank closures.
“In addition, the Corporation is advocating for the strengthening of the regulatory and problem-bank resolution framework to provide for finality and speed resolution of problem and or failed banking institutions,” said Mr Musadziruma.
The National Code on Corporate Governance will ensure strict adherence to corporate governance practices by both the private and public sectors.
Interfin, whose shareholders are Mr Jerry Tsodzai, Mr Farai Rwodzi and Mr Tim Chiganze with 60 percent ownership, was established in 1999.
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