- Published on 11 January 2015
- Written by The Zimbabwean
Obert Mpofu, the current transport and former mines minister, has lost his banking licence due to longstanding viability problems.
Allied Bank was struggling to meet the required minimum capital of $25 million and only had $3.4 million as its core capital.
The closure of the bank comes amid reports that the newspaper title he had also bought, the Zimbabwe Mail, is on the brink of collapse.
Mpofu bought major shareholding in the bank in Allied Bank in 2012 through his business vehicle, Trebo and Khays, when he was mines minister.
The purchase raised eyebrows over where he obtained the $23 million to buy the stake at a time the diamond industry was rocked by allegations of shady dealings and unprocedural allocation of mining licences.
The Reserve Bank of Zimbabwe (RBZ), yesterday issued a statement announcing the cancellation of the Allied Bank licence in terms of Section 14 (4) of the Banking Act (Chapter 24:20).
Allied voluntarily surrendered its licence to RBZ.
"The Reserve Bank has determined that the banking institution is no longer in a safe and sound condition in that the institution is grossly under-capitalised and is facing chronic liquidity challenges."
RBZ will initiate the liquidation of the banking institution in due course.
The Reserve Bank will apply for the liquidation of the institution in terms of Section 57(1) (a) of the Banking Act.
Insiders say the publication has from last year been struggling to pay workers and fund core operations as the stable is failing to attract meaningful advertising and sales are poor.
The Zimbabwe Mail hit the streets over 12 months ago becoming Zimbabwe’s newest daily paper to compete with the Herald, Chronicle, Newsday, Daily News and Southern Eye among others.
But since its launch things have not been going on well for the Mail with late payments of salaries being the order of the day, according to sources at the paper.
Sources said Mpofu appears to have washed his hands off the paper as it was chewing money from his other businesses.
"He seems to also have lost interest since revenue has not been forthcoming and we last saw him some months ago," said a journalist who asked for anonymity.
A source claimed that Mpofu is only good at increasing both toll gates and toll gate fees but allegedly runs his businesses so dismally.
"Obert Mpofu is very rich, that we can't dispute. But he is better off as an ordinary man because all his businesses are performing dismally. He is in fact running losses in all his businesses. He runs a transport company which is being managed by his son who was in overseas for quite some time.
"He refuses to accept contracts from DRC, arguing that his haulage trucks do not go to that risky country, but that where the money is, now his transport company is about to close as well. I wonder why he was made a transport minister when his own transport company is struggling to survive," said a source who claimed to have worked with Mpofu's son in one of their 'transport deals'.