By Alois Vinga
INSOLVENT Capital Bank Corporation (CBC) has lost 76 million shares it held in First Mutual Holdings Limited after Rainbow Tourism Group (RTG) successfully attached the stake to recover a US$2.5 million debt.
According to the RTG chief executive, Tendai Madziwanyika, the shares were seized after a prolonged legal battle.
“It took us six years to eventually recover that money and when I started in 2012 that money was already owed.
“Initially it was difficult to get the money because back then Capital Bank was operational and they were presenting payment plans which they never honored until the bank went down,” Madziwanyika said.
The RTG boss revealed that he was then forced to focus priorities on getting the money through legal processes which were difficult since CBC did not have directors and even registered offices at some point in time.
“We had to work through all that, which is why we are employed as management to solve problems.
“So our investigations revealed that CBC had shares in First Mutual Holdings Limited so we obtained a writ of execution and enlisted the services of the Sheriff who managed to attach the shares and recovered our money with interest of course,” he said.
CBC was forced to wound up operations after the financial institution failed to service its debts amounting to over US$25 million.
The bank’s accounts showed that a serious loss was suffered, while its capital and reserves were in the negative. The financial institution had total outstanding liabilities in excess of US$35 million.
John Chikura, from Deposit Protection Corporation was appointed the bank’s provisional liquidator.
Capital Bank’s license was cancelled in June 2014 and several debtors are still battling to recover various amounts which they were owed by the financial institution.