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RESERVE Bank of Zimbabwe (RBZ) has cancelled the Tetrad Investment Bank (TIB) licence after the financial institution’s shareholders resolved to voluntarily surrender it and requested for its cancellation.
The investment bank was placed under provisional judicial management in 2015 after a deal with Horizon Capital Consortium Zimbabwe, the prospective investor that had agreed to recapitalise the institution, failed to materialise.
TIB was then placed under the provisional judicial management of the Deposit Protection Corporation (DPC).
In 2018, the institution was removed from provisional judicial management and handed over to its new management as the institution sought to resume normal operations.
Following the processes undertaken during the Provisional Judicial Management period, the institution did not have any depositors on its books, RBZ said.
In a notice, the RBZ registrar of banking institutions said TIM is no longer a banking institution therefore its status is that of a company in terms of the Companies and Other Business Entities Act (Chapter 24:31).
“It is hereby notified, in terms of section 15 of the Banking Act (Chapter 24:20), that at the banking institution’s request, the Registrar of Banking Institutions has cancelled Tetrad Investment Bank Limited licence with effect from the date of this notice.
“This follows the institution’s voluntary surrender of its licence and request for its cancellation in terms of Section 14 (4) of the Banking Act,” reads part of the notice.
“The institution’s shareholders have resolved to surrender the merchant banking licence for cancellation, and instead, to pursue options available in the management and development of its property portfolio.
“Tetrad Investment Bank Limited failed to commence operations following the lifting of Provisional Judicial Management in October 2018. The institution unsuccessfully courted potential investors and failed to put in place requisite infrastructure to facilitate commencement of banking operations.”
RBZ added that in the circumstances, the maintenance of registration of TIB as a banking institution is undesirable.
“Accordingly, the Registrar has cancelled the bank’s licence in terms of Section 14 (4) of the Banking Act. As a consequence of the said cancellation, Tetrad Investment Bank Limited is no longer a banking institution as defined in the Banking Act, and therefore its status is that of a company in terms of the Companies and Other Business Entities Act (Chapter 24:31). Members of the public are accordingly advised not to undertake any banking transactions with the institution.”
RBZ is on record saying TIB was placed under provisional judicial management within the framework of promoting the balance between the multiple interests of depositors, shareholders, potential investors and other creditors.
TIB was crippled by related party loans, whose balances of $19 million accounted for 76 percent of the unsecured loan balance of $25 million as at end of 2014, with no security to recover the balances.
TIB was incorporated on June 12, 1995 as Tetrad Securities Limited.
The institution commenced operations in 1996 after obtaining a licence to operate as a discount house in terms of the Banking Act.
Tetrad Securities Limited’s discount house licence was converted to a merchant banking licence on March 6 2009. But TIB’s licence was withdrawn by the Reserve Bank of Zimbabwe in 2014.
In 2015, the bank was then placed under provisional liquidation, while it looked for a new investor. Its liabilities exceeded assets by US$1,5 million.
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