HARARE – The Zimbabwe Amalgamated Housing Association (Zaha) has approached the High Court seeking to recover nearly $1,5 million that was locked up in Allied Bank of Zimbabwe.
Allied Bank, majority owned by a vehicle linked to Economic Planning and Investment Promotion minister Obert Mpofu, had its licence cancelled by the Reserve Bank of Zimbabwe in January 2015 after it was found to be in an unsafe financial position.
According to the High Court application filed last Wednesday, Killer Zivhu, who is Zaha’s chairman, is seeking an order for the removal of the liquidator Cecil Madondo for alleged failure to comply with his statutory duties to repay the locked-up money.
In the application, Zaha cited Madondo, Allied Bank and the Master of High Court as respondents.
“This is an application for the removal of the first respondent (Madondo) from holding the office of liquidator in second respondent (Allied Bank) in terms of Section 273 (1) (b) of the Companies Act or in the alternative Section 280 of the Companies Act which is to compel the first respondent to lodge with the third respondent (Master of High Court) final true accounts and status as to how the liquidation process is to be wound up,” Zivhu said in an affidavit.
When Allied Bank had its licence cancelled, Madondo was appointed the liquidator.
Madondo later called for a creditors’ meeting in June of the same year and at the meeting, Zaha lodged a claim of $1 410 549,38, which was accepted by the bank.
Zaha, according to court papers, later made follow-ups pertaining to the progress of the liquidation process and when it was to be paid its money that was held up in the bank at the time the financial institution was placed under liquidation.
“It is my humble submission that a person appointed as a liquidator owes some fiduciary duties to the creditors amongst others which is to keep creditors well informed of the steps which he is taking to recover what is owed to them and the duty to comply with provisions of the law regarding the lodging of accounts,” Zivhu said.
He further told the court that Madondo is failing on his duties, considering that it is more than two years since his appointment, yet he has done nothing towards making sure that creditors get their money.
Zivhu said that Madondo has grossly failed to protect the interests of creditors and must be relieved of his duties.
“Should this honourable court consider that the first respondent is still fit and proper to hold the office of liquidator, I therefore seek a compelling order in terms of Section 280 to lodge his full and final distribution account with the Master of High Court within seven working days from the date that this order is granted,” he said, adding that Madondo must surrender the bank’s assets, including title deeds, records, bank accounts among other items to the Master of High Court within seven days of the order.
At its closure, the financial institution had a core capital of $3,14 million against a regulatory minimum of $25 million and had unsuccessfully tried to mobilise more funding.
When its liquidation was approved, it was estimated the bank had assets worth $26 million while liabilities stood at over $34 million.
The Deposit Protection Corporation (DPC) said in an update on the liquidation process the Master of the High Court had to date approved claims worth $15,7 million submitted after three creditors meetings held since the institution’s closure. But the bank has failed to pay depositors who had their funds locked in the failed bank.
Madondo and the bank are yet to respond to the application. The matter is still pending before the High Court and yet to be set down for hearing.