Tetrad must honour obligations: Mangudya

via Tetrad must honour obligations: Mangudya – DailyNews Live 17 November 2014 by Ndakaziva Majaka

HARARE – Troubled Tetrad Investment Bank Limited (TIB) must honour its obligations to creditors and depositors, central bank governor John Mangudya said.

Last week, the Reserve Bank of Zimbabwe (RBZ) ordered TIB to halt banking activities — deposit taking and issuing loans — with immediate effect.

The bank, which is failing to meet depositors’ withdrawals and pay off matured investments, entered into a scheme of arrangement with creditors as sanctioned by the High Court in September 2014.

The payment plan was recently extended to January 2015.

Mangudya told businesslive that the RBZ had not revoked TIB’s banking licence, but “what we are saying as the central bank, as enshrined in the Banking Act, is that we cannot have them continue adding to the problems they have…. otherwise maybe the other depositors might also not get their money.”

Upon ordering TIB to stop carrying out banking activities, the RBZ said the move was “considered necessary to protect the public whilst the bank implemented its scheme of arrangement”

“The scheme of arrangement is against the background of the bank’s persistent failure to honour maturing liabilities, including depositor’s funds,” said the financial sector regulator.

Recent market reports said TIB is courting the Zambian commercial bank, Finance Bank Zambia (FBZ). Before that, the hard pressed institution was reportedly in talks with Russian investment consortium Horizon Capital Consortium Holdings.

Meanwhile, TIB’s parent Tetrad Holdings’ losses widened to $11,8 million in the half year to March 2014 compared to $2,8 million.

The banking unit contributed $10 million to the loss.

The group said TIB’s deposits shrunk by 17 percent from $92,9 million to $80,05 million during the period.