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Martin Kadzere : Senior Business Reporter
TRUST Holdings’ banking subsidiary Trust Bank has been placed under final liquidation and shareholders were given 14 days to appeal against the move. “Trust Bank was placed under final liquidation on May 19, 2016, and given 14 working days to appeal,” one official with the Deposit Protection Corporation said yesterday.Trust Bank was placed under provisional liquidation in October 2014 after shareholders withdrew court papers opposing the process. The provisional liquidation order was to allow the bank to conclude its recapitalisation deal.
“It is clear that the bank cannot raise funds to recapitalise,” one official who spoke on condition of anonymity said.
In January 2014, the Deposit Protection Corporation announced it was instituting liquidation processes following the cancellation of its license by the Reserve Bank of Zimbabwe due to a weak capital position and abuse of depositors’ funds. But Trust successfully opposed the liquidation arguing that the institution was on the verge of concluding a recapitalisation agreement with an unnamed South African investor.
In December 2013, the Reserve Bank of Zimbabwe cancelled the banking licence for Trust Bank over allegations of abuse of depositors’ funds and violation of the Banking Act.
The bank was financially unsound and was not operating in line with sound administrative and accounting practices and procedures. In particular, the bank was critically undercapitalised with core capital of $1,9 million and had been posting persistent loss.
Prior to the cancellation of its licence by the central bank, the institution had been facing critical liquidity challenges emanating from the poor loan book and the inadequate working capital and gross abuse of depositors funds.
No official comment could be obtained from DPC chief executive Mr John Chikura by the time of going to print.
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