Knives out for Timba, Kundishora

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The Reserve Bank of Zimbabwe (RBZ) has filed a criminal complaint against ousted Renaissance Financial Holdings executive (RFHL) chairman Patterson Timba and director Dunmore Kundishora after a forensic audit unearthed fraud at the Renaissance Merchant Bank (RMB).

In a notice yesterday, the RBZ said RFHL directors did not have powers to convene the planned extra-ordinary general meeting scheduled for January 25 without the approval of the curator of RMB.

The central bank in June last year placed RMB under curatorship after establishing there was a systematic abuse of depositors funds, a high level of non-performing insider and related-party exposures that included a $9,8 million loan to Timba, and gross violations of banking laws and regulations.

RMB became the first bank since dollarisation in 2009 to be placed under such management after it was deemed technically insolvent, with a negative capital of about $16,7 million as at April 30 last year and a 38% exposure to insiders.

Undisclosed officials claiming to represent RFHL last week issued a notice advising that an extraordinary general meeting originally scheduled for January 17 but lawfully postponed sine dei by the board had been adjourned to January 25.

The proposed RFHL general meeting scheduled for 25th January 2012 is irregular and unlawful, said the RBZ in response to the announcement of the meeting.

It is being called for and convened by members who are subject to the corrective order and is designed to interfere with the work being undertaken by the RBZ, the curator of RMB, the directors of RFHL and RMB and other stakeholders, in order to restore RMB to a sound financial position and ensure the RMB depositors whose funds are locked up in the bank are paid out.

The RBZ said the proposed meeting was an abuse of the shareholding structure the RBZ had deemed irregular and in contravention of the Banking Act and the Banking Regulations.

Members of RFHL are advised that following a forensic audit investigation that was carried out by BCA Forensic Services (Private) Limited and an investigation by the Bank Licensing, Supervision & Surveillance Division of the RBZ, which investigations unearthed fraud at RMB, the RBZ has filed a criminal complaint against Messrs Patterson Fungai Timba and Dunmore Kundishora with CID Serious Fraud Squad, said RBZ.

The criminal complaint is presently being investigated.

RMB curator Reggie Saruchera of Grant Thornton Camelsa, said placing a banking institution under curatorship has the effect of suspending powers of every director, officer and shareholder of the banking institution concerned, save to the extent the curator may permit them to exercise their powers.

The proposed sham meeting of 25th January 2012 has not been sanctioned by me as the Curator of RMB and I have ascertained that the notice has not been issued by the legitimate representatives of RFHL, its rectors, said Saruchera.

Members are advised that I have filed a criminal complaint against Messrs Patterson Fungai Timba and Dunmore Kundishora with CID Serious Frauds.

I am also aware that criminal complaints have also been filed against the two by Africa First Renaissance Corporation Limited (Afre) and by the RBZ. The complaints are being investigated.

RFHL board chairman Christopher Chetsanga said: RFHL members are advised that the unlawful notice has no legal effect and that there is no valid meeting of RFHL scheduled for 25th January 2012.

Members of RFHL will be aware that Patterson Fungai Timba and Dunmore Kundishora were removed from the boards of RFHL and Renaissance Merchant Bank and directed to reduce their shareholding in RFHL, in terms of corrective order that was issued by the RBZ.

He said the RFHL board remained in charge of all RFHL affairs subject to the powers of the Curator.