A COMPANY linked to Mines Minister Obert Mpofu has invested some US$23 million to takeover the Zimbabwe Allied Banking Group (ZABG) which was threatened with closure after struggling to meet new minimum capital requirements.
Commercial banks are now required to have minimum capital of about US$13 million and ZABG, formed following the amalgamation of several banks after the 2003-05 financial crisis, was among the institutions struggling to meet the new threshold.
The central bank has since announced the closure of Genesis Bank after it failed to secure investment to meet the new capital requirements while another struggling institution, Interfin Bank Limited, was been placed under curatorship.
However, state media reported at the weekend that Trebor Khays, a private company linked to Mpofu, had invested US$22,8 million in ZABG, leaving the bank in a healthy capital position.
“The bank is now fully capitalised after an injection of about US$22,8 million by Trebor Khays,” sources close to the deal told The Herald newspaper.
“The business has started to grow as shown by the rollout of personal loans and a range of new products.”
ZABG, with 22 branches around the country, was formed following the amalgamation of the struggling Royal Bank, Barbican Bank and Trust Bank in 2004 as the central bank moved to contain a serious crisis which had hit the sector then.
Royal Bank and Trust Bank have since reclaimed their operating licences after successfully challenging the amalgamation.
But the intervention by Mpofu – whose Mines Ministry has gained renewed significance with the discovery of diamonds in the eastern Manicaland province - has sparked fresh questions about the source of wealth.
Mpofu – said to be one of the country’s richest ministers – insists he is just a shrewd businessman.
Still, Finance Minister Tendai Biti recently said he found it difficult to relate the wealth accumulated by cabinet colleagues to their monthly government salaries of just US$800.
Biti claims officials from Zanu PF are looting the country’s diamond wealth at a time the government struggles to pay its employees decent wages.
“There is no doubt that a small coterie of individuals is benefitting from Zimbabwe diamonds. Some of us who are benefitting are not afraid to flaunt our monies. We are buying all kinds of assets,” the Finance Minister, who is also a senior MDC-T official said recently.
“I am a government minister and earning US$800. How do I buy some of the assets that we are buying?”