Categories: Stories

High Court approves $16 million Allied Bank claims

The High Court has approved claims by collapsed Allied Bank creditors worth $16 million while assets valued at nearly $17 million are currently in dispute, the bank’s liquidator said yesterday.

Allied Bank, majority owned by a vehicle linked to investment promotion minister, Obert Mpofu, had its license cancelled by the Reserve Bank of Zimbabwe in January 2015 after it was found to be in an unsafe financial position.

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 last February, it was estimated the bank had assets worth $26 million while liabilities stood at over $34 million.

The Deposit Protection Corporation (DPC), which was appointed as the bank’s liquidator, 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.

“As at 30 June 2016, about $824 596 had been recovered being $240 000 collected from the various debtors and $584 596 realised from the disposal of government stocks and movable assets,” said DPC chief executive, John Chikura.

Funds recovered from the process are being used to pay depositors who had their funds locked in the failed bank.

Chikura said rate of recoveries and disposal of assets were being delayed due to a dispute over $16.7 million worth of assets which is in the courts while some loans had been granted to debtors without security.

The $16.7 million dispute relates to properties which the DPC insists the majority shareholder had failed to hand over to Allied Bank before its closure.

A distribution account of funds so far recovered was currently being prepared and would be submitted to the High Court for approval, Chikura said.

“Only preferred creditors will be paid from the first distribution due to the low rate of recoveries,” he said.

“Liquidation dividend to unsecured or concurrent creditors will be paid on a pro-rata basis depending on the rate of recoveries.”

Following the bank’s closure, the DPC paid out over $1 million to depositors in line with its mandate, which at the time, gave the institution powers to immediately pay-out an initial maximum of $500 per depositor affected by the closure.

The limit has since been increased to $1 000 per depositor per account effective June this year.- The Source

(46 VIEWS)

Charles Rukuni

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

Recent Posts

Zimbabwe among the top countries with the widest gap between the rich and poor

Zimbabwe is among the top 30 countries in the world with the widest gap between…

November 14, 2024

Can the ZiG sustain its rally against the US dollar?

Zimbabwe’s battered currency, the Zimbabwe Gold, which was under attack until the central bank devalued…

November 10, 2024

Will Mnangagwa go against the trend in the region?

Plans by the ruling Zimbabwe African National Union-Patriotic Front to push President Emmerson Mnangagwa to…

October 22, 2024

The Zimbabwe government and not saboteurs sabotaging ZiG

The Zimbabwe government’s insatiable demand for money to satisfy its own needs, which has exceeded…

October 20, 2024

The Zimbabwe Gold will regain its value if the government does this…

Economist Eddie Cross says the Zimbabwe Gold (ZiG) will regain its value if the government…

October 16, 2024

Is Harare the least democratic province in Zimbabwe?

Zimbabwe’s capital, Harare, which is a metropolitan province, is the least democratic province in the…

October 11, 2024