HomeLocal NewsRBZ to refund seized funds

RBZ to refund seized funds


THE Reserve Bank of Zimbabwe (RBZ) has admitted liability over hundreds of millions of dollars seized from local commercial banks following a directive by Central Bank Governor Dr Gideon Gono in 2007.


While accepting liability in court yesterday, the bank also agreed it would pay back the money with 12% interest per annum.

RBZ lawyer Advocate Linos Mazonde told the Supreme Court bench of Justices Elizabeth Gwaunza, Anne-Mary Gowora and Bharat Patel, that the central bank accepted liability and would pay back the funds to the banks.

The central bank had initially refused to accept liability, saying it had operated within the confines of the law and appealed to the Supreme Court to set aside an earlier ruling by the High Court which compelled it to return the money it had siphoned from TrojanMine’s account at BancABC.

The RBZ argued in its application that High Court judge Justice Nicholas Mathonsi’s judgment, which ordered it (RBZ) to return $1 007 541, 30 to Trojan Mine, had the potential of “opening floodgates” which would result in the central bank being plagued with applications from other institutions whose funds were still held by the bank.

“The money will be refunded at 12% interest per annum and liability is there,” Mazonde said.

Asked by the court to give a timeframe for the RBZ to pay back, Mazonde left the court in stitches when he said: “I cannot be exact on the dates, but it may be after some days, months and so on. It will be paid at some stage to the banks and not individuals.”

Mazonde added: “The taking of the monies was in good faith as indicated in the monetary policy statement. It is not as if the money was being appropriated without the intention of being returned to the banks.”

However, RBZ argued it was immune from prosecution since Gono’s directive was in accordance with the law, an assertion Trojan Mine’s lawyer Advocate Lewis Uriri dismissed.

Uriri argued that RBZ misappropriated the funds and did so negligently and without good faith.

“The appropriation was done not in terms of the RBZ Act, but in terms of RBZ Regulations. The monetary policy statement ordered transfer of balances from authorised dealers’ accounts to the RBZ with the dealer keeping a mirror account,” Uriri said.

“There is nothing in the monetary policy statement which authorised the RBZ to use the money for its own use. The question of immunity cannot be taken for the first time on appeal.”

Uriri further said even assuming it could, the point to be considered was the finding of the High Court that “an actionable wrong had been committed” by the RBZ.
He further said jurisdictional facts did not exist in the matter and the question of immunity could not succeed because the RBZ “intentionally induced
BancABC to breach its contract” with its client.

Judgment in the matter was reserved. Last month, the Supreme Court made a landmark ruling where it ordered Standard Chartered Bank to pay back a client’s funds which it surrendered to the central bank at the behest of Gono six years ago.

This was after the bank’s client, China Shougang International, had taken the matter to court seeking to recover $47 739,86 that the bank had refused to pay, arguing it had surrendered the funds to the RBZ following Gono’s directive.

Bankers’ Association of Zimbabwe president George Guvamatanga said the Supreme Court’s Standard Chartered Bank order “had created uncertainty” in the banking sector.

Recent Posts

Stories you will enjoy

Recommended reading