Renaissance placed under politically motivated curatorship

HARARE – The troubled Renaissance Merchant Bank has been placed under curatorship by the Reserve Bank of Zimbabwe (RBZ) in consultations with government for the next six months after investigations revealed the collapse of corporate governance structures within the institution, but sources said the whole charade is politically motivated.

Renaissance Merchant Bank came under the spotlight in the past few weeks with revelations that there has been collapse of corporate governance structures, gross abuse of depositors’ funds, capitalisation through borrowed and depositors funds, irregular shareholding structure, technical insolvency and lack of separation of ownership and management.

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Addressing a news conference in the capital, Reserve Bank of Zimbabwe Governor Gideon Gono said placing of the bank under curatorship is meant to protect depositors’ funds, preserve the assets of the bank and protect the stability of the financial system.

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Gono also indicated that the placement of the bank under curatorship will also see the removal of some individuals from office to ensure the institution addresses gross corporate governance deficiencies.

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Mr. Reggie Saruchera of Grant Thornton and CAMELSA has been appointed thecurator which means that the powers of every director, officer and shareholder of the banking institution have been suspended.

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Renaissance Merchant Bank will suspend operations for a period of two weeks to facilitate the curator’s assumption of duties.

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Renaissance Financial Holdings founder Mr Patterson Timba made a mistake of borrowing US$5 million loan from Zanu PF linked business tycoon Mr Jayesh Shah to recapitalise Re-naissance Merchant Bank.

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He however, failed to repay the loan within the agreed period.

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The loan was extended at an interest rate of 42 percent per annum and Mr Timba’s failure to repay in time sparked a bitter struggle as Mr Shah threatened to muscle him out of the merchant bank.

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This prompted a three-week politically motivated investigation by the Reserve Bank of Zimbabwe which unearthed what it called shareholding and corporate governance irregularities.

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The investigation also revealed that Renaissance Merchant Bank was undercapitalised.

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Timba is understood to have made six monthly interest payments of US$750 000 twice and was suppose to make the final interest and capital repayment of US$5,75 million by March 4, this year.

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Mr Timba was able to reimburse US$3,75 million and later made the final payment, plus late payment interest of US$5,8 million two weeks later.

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Sources said Mr Shah then suddenly demanded an additional payment of US$12 million claiming the value of Renaissance had grown as a result of the loan advanced, a move some say was instigated by political dark forces.

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In the end, Mr Timba is said to have paid a total of US$7,2 million.

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Mr Timba is said to have “strongly” resisted the additional payments.

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Patterson Timba is the brother of the MDC-T Member of Parliament for Mount Pleasant Jameson Timba, who is also Minister of State in the Prime Minister’s Office.

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Patterson has been involved in the financial and related services sector since the 1990s.

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The link to his brother an MDC-T cabinet Minister and working in the Prime Minister Morgan Tsvangira’s office seems to have sealed the fate for one the of the country’s banking expert.

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Timba began his career at Ernst & Young where he served articles of clerkship. 

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He left Ernst & Young in early 1994 to join Standard Chartered Merchant Bank as Manager-Corporate Finance, where he was involved in several classical corporate finances transactions.

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He held this position until joining Stanbic Bank’s Merchant Banking Division where he continued in his investment-banking career, before joining National Merchant Bank Limited (now NMB Bank Limited) to head their Corporate Finance Division.

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In November 1999, he founded the ReNaissance Financial Holdings Limited Group, an integrated financial services investment holding company with interests in merchant banking, securities trading, fund management and insurance and related services, with offices in Harare and Kampala.

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In September last year, in another politically sticthed up charge heralding Timba’s woes, Patterson and his brother appeared at the Harare Magistrates’ Court facing allegations of fraudulently attempting to take over a mining company. \r\n

Timba was jointly charged with his brother Stephenson, the chief executive of Freshco Resources.

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The two were accused of using fraudulent documents to seize ownership of Glencairn Mine, which had several gold claims in Kadoma, Mr Martin Rushwaya, Prosecutor Ms Tendai Chiduwa alleged that in 2004 businessman Jameson Rushwaya, the brother of Defence Permanent Secretary and his wife Annie saw an advertisement in the local Press for the sale of Glencairn Mine.

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Glencairn, which was at that time owned by Collen Rose and Sarah Hayle, was registered under Tolrose Investments.

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The Rushwayas were interested in purchasing the company and allegedly sought funding from the Timba brothers.

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Th State’s case said that Timbas advised them to apply for a loan from Stanbic Bank.

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As per agreement, the couple and the Timba brothers allegedly formed a company called Aeprom Resources (Private) Limited and restructured shareholding.

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According to the new company, Swimming Pool and Underwater Repairs got 6 150 shares, One Way Ministries Church 1 000 shares, Tongesai Kapondo 499 shares, Jameson Rushwaya 2 348 shares and his wife a single share, the court was told.

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It is alleged Aeprom Resources got Z$3,480 trillion from Stanbic Bank with Jameson Rushwaya offering his Bulawayo house.

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One of the Timba brothers offered a Harare flat, the prosecution says.

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The money was used to buy Glencairn Mine from Rose and Hayle in November 2004.

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On February 23, 2005 Rose and Hayle resigned from Tolrose Investments and the Rushwayas took over as directors.

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When Aeprom failed to repay the Stanbic loan, it is alleged Patterson Timba cleared it, but the firm’s operations continued under the Rushwayas directorship until March 2010.

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It is the State’s contention that this year, the Timba brothers and Sabtenia Jakaza, Margaret Ditima, Tongesai Kapondo and Samuel Mazowe — who were all at large — plotted to oust the directors.

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They allegedly originated a fraudulent CR14 form for Tolrose Investments dated March 31 imposing themselves as additional directors.

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The two are also accused of appointing Mazowe as secretary before sending the document to the Registrar of Companies, the State alleges.

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It is the State’s case that the Timbas submitted the document with the full knowledge that it was fraudulent.

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