Source: Tetrad acting board chairman resigns | The Herald
TETRAD Investment Bank (TIB) acting board chairperson Appollinaire Ndorukwigira, a top economist, stormed out of a critical meeting in Harare and subsequently resigned three days ago amid a fight among directors over the company’s forthcoming controversial Extraordinary General Meeting (EGM).
This comes against a backdrop of a shareholder revolt at the bank and chaos within the management of the now-defunct financial institution which has a US$13 million asset portfolio.
Mr Ndorukwigira, a Harare-based Burundian economist who is a former special adviser to the executive secretary of the African Capacity Building Foundation, said in his resignation letter to the board, dated December 5 2022, that he quit as he strongly objected to the agenda of the upcoming EGM, particularly the proposal to transform the bank into a property management company.
After Mr Ndorukwigira’s resignation, the bank’s board now comprises Messrs Misheck Mpiwa Chiwayo, John Alexander Brydone Graham, Harry John Orphanides and Andre Lourence Vermaak – all Zimbabweans.
The EGM – scheduled for 16 December – is controversial as the board wants to use it to change the bank into a property management company and entrench itself against shareholders’ will and interests. Directors also want to remain in charge of the money-spinning property portfolio for personal benefits.
“The meeting of the board which took place on December 1 2022 at the Pavilion, St George’s College (Harare), refers. In that meeting, I did strongly object to the proposed agenda of the Extraordinary General Meeting of the company as well as the proposed draft resolution to recommend the surrender of the banking licence and the proposed conversion of Tetrad Investment Bank into a property management company,” Mr Ndorukwigira said in his letter.
“As the records of the meeting would show, I did oppose that draft resolution on the basis that the proposed new business orientation is based on insufficient technical and financial data demonstrating the viability of the new property management company.
“The executive management has failed to produce a credible business plan that would clearly demonstrate that shareholders would be better off by adopting the property management business model.
The documentation sent to shareholders does not show the type of activities to be undertaken to improve the revenues of the company, other than collection of rental income of the current property
portfolio over the next five years.”
Mr Ndorukwigira said as a result of the seemingly dodgy and self-serving proposal, he is opposed to the move to convert the bank to a property management company.
“I did oppose the draft resolution of converting TIB into a property management company because shareholders were being advised to take a critical decision regarding their investments without duly audited financial statements of the company for 2019-2021 fiscal years.
“When Mr John Graham (acting chief executive and chairman of the Tetrad Creditors Group Trust Management Committee) insisted that the board should vote on sending the EGM pack as prepared by management without any change, despite efforts of the chairman to find a workable compromise of holding an EGM to elect a new board, I walked out of the meeting.
“I was shocked to see that the executive management has gone ahead with the dispatch of a supporting document to the EGM in the name of the board without a vote of the board and also without informing the acting chairperson of the board.
“Against this background, I am tendering my resignation as director and acting chairman of the board of directors of Tetrad Investment Bank with immediate effect.”
Mr Ndorukwigira added: “I am hereby requesting the acting chief executive to circulate this resignation letter to members of the company ahead of the forthcoming Extraordinary General Meeting to be held on 16 December 2022.
“For the record, I hereby formally advise that I am immediately withdrawing my proxy that I may have given to any person to vote on my behalf in respect of any matters relating to TIB affairs.”
This comes amid a heated row between TIB shareholders and directors for control of the closed financial institution’s US$13 million assets portfolio. Shareholders led by Mr Jackie Levey and Mr Dimitri Divaris are battling it out with directors led by Mr Andre Lourenco Vermaak and trustees such as Mr John Pybus.
Since 30 October 2018, a five-member board led by Mr Ndorukwigira, who was the acting chairperson until three days ago, has been running the affairs of the bank. The bank is now owned by its shareholders, not Tetrad Holdings as used to be the case before the debt-to-equity scheme of arrangement.
Lack of return on investment for eight years has fuelled a shareholders’ revolt at the bank whose directors are battling with a crisis as it spins out of control.
Against this backdrop, a host of minority shareholders are now increasingly growing impatient with the directors and executives running the bank’s affairs, including managing its US$13 million property portfolio from which it collects rentals and leverages it for other financial benefits.
Besides lack of return on investment, the shareholders are complaining about lack of audited financial accounts.
Shareholders have not received audited financial accounts for the past three years. The last financials they received were qualified statements for 2018, which only came in 2022.
The other big issue troubling shareholders is the impression that management and directors are benefitting from the bank’s diversified property portfolio from which they are receiving rentals, while equity stakeholders get nothing.
Shareholders are also disgruntled because the directors have made a series of empty promises on purported takeovers and capital injection which have not materialised, including the fake story of Russians coming on board a few years ago.
The other issue arising is that some of the shareholders are mainly old people.
As a result, some of them have died without benefitting anything from their investments, while others are fast ageing.
Yet, shareholders say, there is no sense of urgency on the part of management or directors who are fully aware of the demographics, particularly age, of the equity stakeholders who need the money the most now in the twilight of their lives.
To make matters worse, there has also been a communication drought from management or directors to shareholders. Some of the agitated shareholders have spoken out against the current untenable situation.
TIB was incorporated on 12 June 1995 as Tetrad Securities Limited. The institution commenced operations in 1996 after obtaining a licence to operate as a discount house in terms of the Banking Act. Tetrad Securities Limited’s discount house licence was converted to a merchant banking licence on 6 March 2009.
But TIB’s licence was withdrawn by the Reserve Bank of Zimbabwe in 2014. In 2015, the bank was then placed under provisional liquidation, while it looked for a new investor. Its liabilities exceeded assets by US$1.5 million.
Initially, Tetrad Holdings, established in 1995, comprised financial services (a merchant bank, TIB; asset management entity, TFS Management Company; a microfinance unit, Multiridge Finance; and an insurance company, Tobacco Hail Insurance), a mining and mineral resource processing company, Tetrad Resources; a property development and management company, Tetrad Properties; and other interests.
However, when the group closed in 2014, it was broken into different entities. This left the bank, TIB, in the hands of depositors after a debt-to-equity scheme of arrangement.
Tetrad acting board chairman resigns
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