By Correspondent
Bulawayo City Council (BCC) has been ordered to follow through on its equity interest in the now defunct Tetrad Investment Bank 10 years later.
Council had an equity investment in Tetrad Investment Bank Limited carried at $526 220 for 2019 and 2020.
Council was previously paid $5 500 on November 29, 2017 and issued with 5 262 220 shares valued at $526 222.
However, Tetrad had its operating licence cancelled by the Reserve Bank of Zimbabwe.
It was subsequently placed under provisional judicial management by the Harare High Court after the bank’s liabilities exceeded its assets.
In a report the Auditor General says since then it hasn’t been clear what Council has retained from the bank.
“The provisional judicial management of the bank was lifted in October 2018.
“(This) followed successful conclusion of a scheme of the arrangement involving conversion of debt to equity.
“I was unable to obtain sufficient appropriate audit evidence about the valuation and equity interest of the Council’s investment in the bank.
Council should engage Tetrad with a view to determine Council’s equity interest therein,” she said.
Tetrad Troubles
Tetrad failed to commence operations following the lifting of Provisional Judicial Management in October 2018.
The institution unsuccessfully courted potential investors and failed to put in place requisite infrastructure to facilitate commencement of banking operations.
Since then its shareholders voted to surrender its banking licence and convert it into a property development company.
The moribund bank, is now owned by its shareholders after a debt-to-equity scheme of arrangement in September 2015.
At the height of liquidity challenges mainly between 2014 and 2015 BCC lost money as various banks collapsed.
The then town Clerk Christopher Dube the city was involved with some of the banks in one way or another hence their collapse or closure resulted in some losses.
“Every effort was being made to recover the money that was lost”, said council.
It gave a list of four banks owing and their outstanding amounts.
Tetrad Investment Bank topped the list with $536 220 followed by Allied Bank, which owes $476 544.
AfrAsia Banks owed $2 787 while MetBank, which survived liquidation owed $32 512.
However, Metbank reportedly later settled its debt with Council.
In 2018 BCC recovered from the Metbank $32 512 of the $1 million it lost after the financial institutions went under a few years ago.
BCC is yet to recover $476 544 in money market investments it had placed with Allied Bank.
The Allied licence was cancelled by the Reserve Bank of Zimbabwe on January 8, 2015.
BCC is also owed $2 287,40 by the now defunct AfrAsia Bank, which folded on February 24, 2015.
