THE High Court has begun the liquidation exercise of the defunct Genesis Investment Bank, a year after the banking institution surrendered its operating licence after failing to meet minimum capital requirements.
According to the Government Gazette published last Friday, the court has given creditors a two-week window period to examine the bank’s financial position as it winds up operations.
“Notice is hereby given that the liquidation accounts and plans of distribution in the liquidations mentioned below will lie open at the offices mentioned for a period of 14 days, or such longer period as is stated, from the date of publication hereof, whichever be later, for inspection by creditors,” reads the gazette in part.
Already the Deposit Protection Corporation (DPC), a quasi-government unit tasked with compensating depositors in cases of bank failures, has already undertaken to pay up to $150 to depositors, a figure widely seen as meagre for the bank’s individual and corporate customers.
The DPC indicated that the balance would be settled after the bank disposes its assets. Official figures show that as at May 2012, Genesis had a deposit base of $2 million.
Last year a company lodge belonging to the defunct Genesis Investment Bank in Vumba was sold after the curator invited bids from prospective buyers to meet the bank’s final obligations
Genesis, which surrendered its licence last June, according to the Reserve Bank of Zimbabwe, failed to raise the requisite minimum capital from over 20 different potential inventors whom the bank had tried to engage since 2009.
The central bank said Genesis board of directors had failed to steer the institution out of numerous deficiencies, including gross undercapitalisation (-$3,20 million), persistent losses, poor asset quality, paltry deposit base, and chronic liquidity challenges.
Critics say it is ironic Indigenisation minister Saviour Kasukuwere, who on numerous occasions had threatened foreign-owned companies with closures and takeovers, allowed Genesis to fold.
Kasukuwere is believed to have been one of the bank’s shareholders, but he insists that he had sold his shares at the time it was closed.