‘Arrogant’ Tetrad judicial manager faces chop Winsley Militala
Winsley Militala

Winsley Militala

Mashudu Netsianda Senior Court Reporter
TETRAD Investment Bank has filed an application at the Bulawayo High Court seeking an order for the removal of Winsley Militala of Petwin Executor and Trust Company (Pvt) as its provisional judicial manager.

The bank was early this year placed under judicial management by Justice Martin Makonese following an application by the company’s board of directors citing liquidity pressure due to unfavourable macro-economic conditions, high non-performing loans and negative revenue growth.

In its application filed through lawyers, Venturas and Samukange Legal Practitioners, citing Winsley Militala, Petwin Executor and Trust Company (Pvt) and the Master of the High Court as respondents, Tetrad Investment Bank accuses the judicial manager of failing to comply with the provisions of the Companies Act and producing a “flawed and inaccurate” judiciary management report designed to mislead creditors and shareholders.

In his founding affidavit, Miccah Moyo, Tetrad Holdings (Pvt) Ltd chairman is seeking the removal of Militala so that he can be substituted with a replacement in terms of section 273 (1) b as read with section 313 (1) of the Companies Act.

Moyo argued that Militala has been dismissive of management and arrogant in exercising his mandate. He also accuses the judicial manager of raising a fee note for $144, 900 for two months of service without prior approval of the Master of the High Court.

Moyo said the judicial manager failed to properly engage Russian investor Horizon Capital and its representatives.

“On March 16, 2015, first respondent (Militala) after less than two months acting as the bank’s provisional judicial manager presented an invoice for his services for $144,900. Since his appointment, Militala has failed in any meaningful way to properly engage Horizon Capital and its representatives and a meeting, which was initially scheduled to be held on April 2, 2015, was postponed.

“I submit it was critical that Militala engaged Horizon Capital fully so that he could be fully appraised of the developments before the two creditors meetings in Harare and Bulawayo on April 22 and 24, 2015 so that he could make full representations to the creditors on the acquisition in those meetings,” said Moyo.

The bank’s chair also said Militala failed in his judicial manager’s report to highlight or investigate why loans of more than $2 million were collected in October, 2014 and six months later only $13, 000 is collected.

“The judicial manager produced a flawed report based on inaccuracies as it makes no attempt to assist creditors with providing adequate information as to the implications of the liquidation for each class of creditors. It is submitted that it is grossly unreasonable for Militala to neglect to attempt to ascertain how much of their investment secured creditors are likely to recoup and how much unsecure they (creditors) are likely to recoup,” said Moyo.

“The applicant is seeking the removal of Militala as the provisional judicial manager and his substitution in order that the judicial management exercise is completed. We have resolved that given his conduct we have no option but to cancel the security for his cost,” he said.

In its application for judicial management, the Tetrad Investment Bank, through its acting chief executive officer Eugene Mlambo, said it was just and equitable for the banking institution to be placed under provisional judiciary management to protect its recapitalisation process.

“Owing to the depressed liquidity conditions as well as high default on its debtors’ book, the applicant (Tetrad) is unable to meet demand or upon maturity, deposits place with it or indeed meet sums due to trade creditors. Consequently, the applicant entered into a Scheme of Arrangement under Case No. HC 1532/14 with its creditors in order to allow for recapitalisation of the bank by Horizon Capital Consortium Zimbabwe (Pvt) Ltd (Horizon) in terms of the agreement signed between Tetrad Holdings Ltd and Horizon,” said Mlambo.

Last year, the Reserve Bank of Zimbabwe (RBZ) suspended Tetrad Investment Bank from taking deposits and issuing loans until the troubled institution had completed its recapitalisation exercise. In August, Tetrad creditors voted for the scheme meeting that agreed to defer claims to allow processes to recapitalise the institution.

The creditors further agreed to allow Horizon Capital to finalise acquisition of a controlling stake in the bank. Horizon is made up of a Russian investor Sergey Pokusaev, the Zimbabwe government and other local investors. Before the scheme meeting, creditors had obtained writs of execution to attach the bank’s assets.

Last year in May, Tetrad Holdings shareholders approved the takeover of the group’s investment banking arm by Horizon, which wanted to inject $200 million fresh capital into the struggling bank, which is among the seven financial institutions being monitored by the central bank under the Troubled and Insolvent Bank Policy.

During a scheme of arrangement meeting at a Bulawayo hotel attended by hundreds of angry creditors and depositors as well as a consultant representing the potential investor, management pleaded for the deferment of payment until October 31 to pave way for the takeover processes to be completed, or risk losing out.

The bank, which has over 3,000 depositors, had been issued with 65 summons, with 17 of those seen as presenting a threat to its assets.

Established in 1995, the Tetrad Group is a Zimbabwean based organisation with interests in the financial services sector, insurance, property, mining and other areas of commerce. It comprises a Merchant Bank, Tetrad Investment bank; an asset management company, TFS Management Company; a micro finance company, Multiridge Finance, an insurance company, THI Insurance and a property development and management company.

 

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