HARARE - Allied Financial Holdings (AFH) says Terence Mukupe’s appointment as the group’s chief executive — under a deal with a Mauritius-based consortium — is expected to bolster the institution’s operations.
Farai Mutamangira, AFH’s chairperson, said the coming in of Mukupe “reaffirms our commitment to building a much stronger institution”.
Mukupe, leading the consortium that will acquire a significant stake in AFH’s subsidiary, Allied Bank, has exposure in several continents, having worked for world class financial institutions in the United States, Russia and Africa.
He was recently employed by Russian investment company Renaissance Group as chief executive of its Zimbabwean subsidiary Renaissance Capital.
However, Mukupe unceremoniously left the group in 2012 when he fell out with its Russian Billionaire owner Mikhail Prokhorov over Renaissance group’s failure to pay agreed transactional fees relating to, among others, empowerment compliance deals.
Last year Mukupe dragged the investment group to the High Court seeking an order to garnish and attach the group’s financial and fixed assets.
Allied Bank, which is battling to raise $30 million to meet the $25 million minimum capital requirements set by the central bank, says it has put plans in motion to be recapitalised.
Stephen Gwasira, Allied Bank chief executive, said the tight liquidity constraints experienced towards the end of 2013 resulted in, among other constraints, cash shortages, limited capacity to lend and consequently diminishing revenues in the face of escalating operating costs.
“The solution to the liquidity constraints lies in the successful finalisation of the ongoing recapitalisation initiative.
“The return of the interbank market and lender of last resort facility will also go a long way towards mitigating the liquidity squeeze being experienced,” he said. Gwasira noted that Allied Bank is currently considering a number of short to medium term strategies to grow revenue streams and contain costs.
“Some of the measures considered include short time, unpaid leave and branch rationalisation. Funds permitting the retrenchment option will also be considered.
“The board is kept abreast of all these initiatives and the measures are being pursued with the board’s full support,” he said.
Gwasira added that some of the measures have already been implemented and the bank has started realising the benefits.
“For instance the bank relocated some operations to own premises and in other cases to more affordable rented premises.
“However, where initiatives involve staff great care is being exercised to ensure that provisions of the Labour Act are strictly observed,” he said.
Formerly known as ZABG Bank, the financial institution was later rebranded to Allied Bank after Transport minister Obert Mpofu acquired the bank through his company, Trebo and Khays.