Royal Bank creditors get $765 000

HARARE - Deposit Protection Corporation (DPC) says it has paid about $765 000 to Royal Bank (Royal) creditors.

The corporation’s chief executive, John Chikura, yesterday told the businessdaily that his organisation would be in a position to determine the exact amount to be realised from the disposal of the beleaguered financial institution’s assets in approximately six months.

“ . . . preferred creditors were paid an amount of $556 886 from the first liquidation and distribution account while secured creditors were paid $208 138,” Chikura said, adding that there had been no dividend to unsecured or concurrent creditors.

The DPC boss also said the disposal of Royal’s assets and recovery of loans was still on-going.

This comes as three creditors meetings were held in 2015, with the first interim liquidation and distribution account approved by the Master of the High Court end of last year.

According to DPC — Royal liquidator — the disposal of immovable assets and recovery of outstanding loans has taken longer than initially anticipated, given the initial position that preferred creditors were supposed to have been compensated in May 2015.

“This is mainly attributed to external factors such as the illiquid market and legal processes which have to be followed in the litigation of clients who owe the bank. Furthermore, most of the facilities granted to debtors do not have security and this has negatively impacted on the rate of recoveries,” Chikura said.

However, the DPC anticipates declaring a second dividend by August.

“The unsecured or concurrent creditors will receive their dividend once all the preferred creditors such as Zimra and Nssa have been paid in full as required by law. The liquidation dividend to unsecured or concurrent creditors will be paid on a pro-rata basis depending on the rate of recoveries,” he said.

Royal — which surrendered its licence in 2012 after it had been deemed unsafe by the central bank — has creditors clamouring for a forensic investigation targeting the beleaguered bank’s chief executive Jeffrey Mzwimbi, top executives and other directors amid allegations the financial institution’s top brass flouted regulations.

Royal was in an unsound financial position after experiencing deteriorating financial performance and results.

In February 2013, a provisional liquidation order was granted by the High Court of Zimbabwe.

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