HomeNewsIpec to conclude investigations into Afre subsidiaries

Ipec to conclude investigations into Afre subsidiaries

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Investigations into the dealings of Afre Corporation subsidiaries, Tristar Insurance Company, Pearl Properties and First Mutual Life by the Insurance and Pensions Commission (Ipec) are expected to be completed by mid-next month.

Afre Corporation recently said it had been exposed to the tune of over $6 million by ReNaissance Financial Holdings Limited (RFHL) following interparty financial transactions.

Ipec was ordered by the Finance ministry in May to investigate the three companies following links with the former Renaissance Financial Holdings CEO Patterson Timba.

Timba was in May booted out of the financial group after the Reserve Bank of Zimbabwe and the Ministry of Finance uncovered some irregularities in the dealings of the group.

Commissioner Mannet Mpofu said preliminary investigations into operations had revealed the need for a comprehensive investigation.

“KPMG Chartered accountants Zimbabwe were then appointed to launch a full-scope investigation which is ongoing. The full-scope investigation is meant to shed more light on those dealings,” she said.

“I would not want to pre-empt the findings of the ongoing investigation. The investigation should be concluded by mid-July after which its findings will be treated as provided for in terms of Section 67 of the Insurance Act Chapter 24.07,” Mpofu said.

Last month Finance minister Tendai Biti and Reserve Bank of Zimbabwe governor Gideon Gono said an audit carried out at RFHL uncovered irregular shareholding where three main shareholders had direct or indirect shareholding of at least 70%, which was inconsistent with international regulations.

Biti said there was no separation between activities of shareholders and management as they were both the board and management.

“The board of Renaissance Financial Holdings and Renaissance Merchant Bank failed in their oversight function vis-à-vis as a bank and as a holding company and many of the omissions and commissions would not have occurred had the board been more prudent in providing fiduciary responsibilities.”

Biti said the other reason was undercapitalisation of the bank — but of great concern was the attempt to capitalise through borrowed or depositor’s funds, which was a violation of Section 32 of the Banking Act.

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