HARARE - Zimbabwe's High Court has postponed Trust Bank (Trust)’s liquidation process to February 18 following a successful challenge by the financial institution’s lawyers.
Represented by Thabani Mpofu, the bank chiefly argues that depositors are unlikely to support outright closure of the institution hence it must be given a chance to engage investors for fresh capital injection.
“We applied for the postponement of the hearing so that we have enough time to compile our opposing papers,” he told businessdaily yesterday.
While the Reserve Bank of Zimbabwe (RBZ) says Trust was undercapitalised — with a core capital of $1,9 million against the central bank’s minimum threshold of $75 million by December 2013 — it has been in tentative discussions with a South African investor, Mining Oil and Gas Service (Mogs), which was willing to inject $20 million into the institution.
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 in terms of the High Court Order HC 10703/13.
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.
The postponement of Trust’s liquidation will mean that the Deposit Protection Corporation (DPC)’s intention to immediately pay all its depositors an amount not exceeding the maximum insurable limit of $1,7 million ? $500 per depositor ? would be halted.
Last week, DPC chief executive John Chikura said as the duly appointed provisional liquidator of Trust, he was empowered to reimburse depositors who were affected by the bank’s closure.