Former Interfin Bank bosses sued for $136m

THE Deposit Protection Corporation (DPC), has dragged the defunct Interfin Bank’s majority shareholder Farai Innocent Rwodzi to the High Court seeking to recover over $136 million as compensation for prejudice caused by his negligence.

BY CHARLES LAITON

The Liquidator is accusing Rwodzi of negligently causing the bank’s collapse.

In the summons issued last month, DPC cited Rwodzi, directors Timothy Chiganze, Jeremiah Tsodzai, Raymond Njanike, Emmanuel Tagarira, David Mbiba, James Shumbanhete, Pelagia Kafesu, Dr Teddy Zengeni, Maxwell Revai, Christopher Sambaza, Tendai Chimuriwo and Nomsa Ncube as respondents. DPC accused Rwodzi of using his influence as the shareholder to acquire loans which he used to service personal debts and for entities in which he had a direct or indirect interest, while at the same time prejudicing the bank of $136 097 897, 09.

“On diverse occasions first defendant (Rwodzi) wrongfully and unlawfully or fraudulently utilised his influence as a controlling shareholder in the bank and caused the board of directors of the bank and/or the employees of the bank to grant loans to companies or entities in which first defendant had a direct or indirect interest in circumstances where no proper security was granted or pledged,” DPC said in its founding affidavit.

The liquidator said Rwodzi misrepresented the financial status of the bank to shareholders and the RBZ.

DPC also said all the 12 cited directors, at all material times, owed the bank a fiduciary duty to ensure that it was operated according to sound corporate principles and that good corporate governance and accepted banking practice was adhered to at all times.

It further said the directors were also responsible for the control, direction and management of the bank, but later reneged on their mandate leading to the collapse of the financial institution.

Amongst other breaches of their fiduciary duty, DPC said, the directors failed to ensure that any meaningful capital was injected into the bank resulting in a real negative capital of $5 876 089 as at March 31, 2010.

“These defendants as members of the board of directors of the bank failed and/or neglected to properly supervise and/or monitor the lending activities of the bank, which resulted in the granting of loans to related parties and/or customers without adequate security or in the exercise of normal and reasonable prudential banking practice,” DPC said.

The liquidator further said the board of directors negligently allowed the bank to pay interest on a loan obtained from a third party for the benefit of Rwodzi utilising the depositors’ funds to the prejudice of the bank.


“These defendants permitted and/or sanctioned risky or reckless investments to be made by the bank. And in any event permitted and/or sanctioned investments to be made by the bank which did not relate to banking business and was thus unauthorised.”

The defendants have since entered an appearance to defend notice with Ncube seeking further particulars requesting to know when she was allegedly appointed an executive director of the bank.

Ncube said she wanted to know what the position of the bank was as a result of which the Reserve Bank of Zimbabwe placed it under curatorship and in what respect she was alleged to have breached her fiduciary duty owed to the bank among may other questions. According to the court papers Interfin Bank was initially placed under curatorship by the Reserve Bank of Zimbabwe (RBZ) in May 2012 and Peter Bailey was in June of the same year appointed curator before his tenure expired in December 2014 at which time DPC was then appointed to take over.

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4 Comments

  1. One needs to obtain a banking licence and its aluata continua which is not a crime in Zimbabwe. All depositors funds belong to the owners of the indigenous banks hence its wise to deal with international banks.

  2. spot on;making money using other people’s money

  3. Take them to court . Njanike is actually proud and says he is one of the richest men in Harare. Lift the corporate veil and nail them. This is unjustified enrichment.

  4. This is a test case for the Zimbabwe banking industry. Its so painful that bank owners think depositors’ funds belong to them. I pray the Courts convict these fraudsters disguised as bankers.

  5. These people are thieves. The long and short of the whole thing is that, they collected money from people and shared it amongst themselves. I heard about the amounts each got as loans to their private companies and from the look of things it was a deliberate move because they knew that the bank will fold. Mbavha dzevanhu

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