Trust liquidation set aside

HARARE - Zimbabwe's High Court has set aside a liquidation order imposed by the Reserve Bank of Zimbabwe (RBZ) against Trust Bank (Trust).

The central bank had approached the Court seeking to liquidate Trust arguing the bank was undercapitalised with a core capital of $1,9 million against the required minimum threshold of $75 million by December 2013.

RBZ’s move was despite the fact that Trust was in tentative discussions with a South African investor, Mining Oil and Gas Service (MOGS), which was willing to inject $20 million into the institution.

High Court judge Joseph Mafusire dismissed the central bank’s liquidation application yesterday.

Trust’s lawyer, Thabani Mpofu, has since filed summons against the RBZ, seeking an order to declare the liquidation as “unlawful and unconstitutional”.

“The intention to harass plaintiff is malicious, unreasonable, unlawful and wholly unconstitutional and must be declared to be so in that,” read part of the application.

The bank had earlier on told the court that depositors were unlikely to support outright closure of the institution hence it must be given a chance to engage investors for fresh capital injection.

It claims the central bank is hampering its recapitalisation initiatives.

“The intention by defendant to liquidate plaintiff in the current economic conditions and when it is a lot more financially stable than rival banking institutions which defendant has not liquidated smacks of bad faith, is malicious, takes away plaintiff’s rights to fundamental justice and is grossly unreasonable as an administrative act,” Trust argues.

The bank further seeks an order mandating the RBZ to facilitate its recapitalisation drive that it has embarked on.

Before revocation of the bank’s licence, MOGS, a subsidiary of the cash-rich Royal Bafokeng Holdings — was seeking government approval to construct a fuel pipeline linking Beira and three southern African countries through Zimbabwe as part of the deal to invest in Trust.

The transaction talks, however, hung in the balance after the central bank cancelled Trust’s licence arguing the institution was financially unsound while it also failed to operate in line with set administrative and accounting practices.

Last December, High Court judge Loice Matanda-Moyo placed Trust under provisional liquidation. She ordered it to provisionally wind up, paving way for liquidation.

Prior to cancellation of the bank’s licence, its parent company, Trust Holdings Limited, voluntarily delisted from the Zimbabwe Stock Exchange after failing to meet the bourse’s obligations.

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