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THE Deposit Protection Corporation (DPC) will pursue litigation against all bank directors and shareholders who abused depositors’ funds, leaving the institutions without enough assets to recover the funds.
DPC chief executive Mr John Chikura said in an interview yesterday that the deposit insurer was determined to recover all or a significant portion of the depositors funds that were lost in the failed banks.
The DPC chief executive’s remarks come in the wake of a similar process already underway at Interfin Bank, where the State appointed liquidator is suing directors and shareholders for prejudicing depositors of $136 million.
According to the liquidator, Mr Ngoni Kudenga of BDO Zimbabwe, shareholders and directors allegedly took advantage of Interfin’s curatorship to hide assets and putting some companies under judicial management to avoid legal action for insider loans worth $90 million they accessed when the bank was still running.
DPC is in the process of compensating depositors of failed banks including AfrAsia, Allied Bank, Genesis Investment Bank, Capital Bank, Royal Bank, Trust Bank and Tetrad Investment Bank, to a maximum insurable limit of $1 000.
“We are doing the same (litigation) anywhere where there are directors or shareholders who abused depositors’ funds. DPC is determined to recover all the funds that depositors lost. If we cannot recover the money from assets, where banks were left as shells, we will try and recover the funds from the director or shareholders,” Mr Chikura said.
He said chances for successful prosecution of the directors and shareholders deemed to be responsible for the collapse and loss of depositors’ funds were bright if all participants in the process co-operated.
The DPC CEO said Zimbabwe has had more than enough laws to bring to book directors and shareholders of failed banks who took advantage of their positions and vulnerability of depositors to personally benefit.
Mr Chikura said shareholders and directors of failed banks should be prosecuted for abusing millions of dollars of depositors’ funds in a country where people receive harsh prison term for stealing cattle.
DPC is suing Interfin founding majority shareholder Farai Innocent Rwodzi and 12 directors at the High Court over $136 million lost by depositors of the failed bank.
The other directors being sued are Timothy Chiganze, Jeremiah Tsodzai, Raymond Njanike, Emmanuel Tagarira, David Mbiba, James Shumbanhete, Pelagia Kafesu, Dr Teddy Zengeni, Maxwell Revai, Christopher Sambaza, Tendai Chimuriwo and Nomsa Ncube.
Rwodzi is being accused of using his influence as major shareholder to acquire loans which he used to settle personal debts and capitalise companies where he had shareholding interests or was a director.
The deposit insurer argues that the directors were responsible for the control, direction and management of the bank, but later reneged on their mandates leading to the collapse of the financial institution.
Online Reporter