Tetrad Bank directors under investigation for fraud; CID secures search and seizure warrant

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By Staff Reporter

THE Criminal Investigation Department (CID) Asset Forfeiture Unit has obtained a warrant of search and seizure against TETRAD Investment Bank (TIB) directors who are facing arrest for fraud and money laundering.

This has emerged days after the TIB acting board chairperson, Appolinaire Ndorukwigira, stormed out of a preparatory meeting and subsequently resigned ahead of the company’s Extraordinary General Meeting (EGM), throwing the financial institution into turmoil.

A notice of search warrant gleaned by this publication shows that the case is being investigated by CID’s Detective Sergeant Tanyanyiwa Mangena of the Asset Forfeiture Northern Region.

“Whereas from information taken upon oath before myself, there are reasonable grounds for believing that Tetrad Investments Bank Limited  is in possession of control of information or document and has records which are required as exhibits in a criminal docket that is necessary for the purpose of investigating or detecting a case of money laundering …,” reads part of the warrant.

The defunct bank – which has a US$13 million asset portfolio – and its directors was issued with the warrant Thursday in terms of Section 50(1)(a) as read with Section 288 of the Criminal Procedure and Evidence Act (Chapter 9:07).

According to the document, the complainant is the State while the accused include the bank and its directors, Harry John Orphanides, Misheck Mpiwa Chiwayo, John Alexander Brydone Graham, Michael Phillip Seton Gaisford, Andre Lourenco Vermaak and Appolinaire Ndorukwigira.

Ndorukwigira resigned in a huff four days ago amid infighting within the board and chaos in management.

The move jeopardised the bank’s critical EGM due in a week’s time to discuss the future of the institution, which retains a significant residual value with an asset portfolio of about US$13 million.

The EGM – scheduled for 16 December according to the shareholders is contentious as the board wants to use it to change the bank into a property management company and entrench itself against shareholders’ will and interests.

Directors also want to remain in charge of the money-spinning property portfolio for personal benefits.

In his resignation letter written to the board, dated 5 December, Ndorukwigira said he quit because he strongly objected to the agenda of the upcoming EGM, particularly the proposal to transform the bank into a property management company.

After the resignation of Ndorukwigira, a former special adviser to the executive secretary of the African Capacity Building Foundation, the bank’s board now comprises Chiwayo, Graham, Orphanides and Vermaak, all of them Zimbabweans.

The other accused party in the police case is Tetrad Creditors Group Trust (TCGT).

According to minutes of the Annual General Meeting dated September 2022, TCGT was formed after a scheme of arrangement in 2015 which converted depositors into shareholders.

TCGT claims to represent 70.71% of shareholders through proxies and uses this opaque structure to control bank’s affairs.

There has been a refusal by TGCT to allow an inspection of proxies who represent shareholders’ interests whom they claim to have.

The purported proxies are used by directors to control the affairs of the bank. Directors want to use the proxies to vote and pass resolutions at an EGM to entrench themselves.

In addition, the board has been name-dropping to shareholders that they have a blank cheque to do what they want at the bank, claiming protection from some officials at the Reserve Bank of Zimbabwe.

This comes amid a heated row between shareholders and directors for the control of the closed bank.

Shareholders led by Jackie Levey and Dimitri Divaris are battling it out with directors led by Vermaak and trustees such as John Pybus for the heart and soul of the bank.

The bank is now owned by its shareholders, not Tetrad Holdings as was the case before the debt-to-equity scheme of arrangement.

Lack of return on investment for eight years has fuelled a shareholders’ revolt at the bank whose directors are battling with the crisis as it spins out of control.

Against this backdrop, a host of minority shareholders are now increasingly growing impatient with the directors and executives running the bank’s affairs.

Besides lack of return on investment, the shareholders are complaining about lack of audited financial accounts.

They have not received audited financial accounts for the past three years.

The other big issue troubling shareholders is the impression that management and directors are benefitting from the bank’s diversified property portfolio from which they are receiving rentals while equity stake holders get nothing.

Based on this, Dimitri Divaris, son of the late modelling and fashion icon Kiki Divaris, has filed criminal charges against the bank’s directors and TCGT.