By Tawanda Musarurwa

HARARE – The recovery of the now redundant Allied Bank’s outstanding loans is hanging in the balance amid revelations that the debts were surrendered to third parties, while a signif-icant portion of the facilities granted to debtors did not have security.

The delay in the recovery process will come as a con-cern to the financial institu-tion’s creditors, among them a number of Government departments.

Said Deposit Protection Corporation (DPC) chief executive officer Mr John Chikura:“The disposal of

immovable assets and recov-ery of outstanding loans has taken longer than initially

anticipated. This is mainly attributed to external factors which include among others,

the debts that were ceded to third parties,” he said.

News Update as @ 1530 hours, Monday 11 April 2016

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Defunct Allied Bank’s unsecured loans delay recovery process

Mr John Chikura

2 NEws

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“Most facilities granted to debtors do not have secu-rity and this has negatively impacted on the rate of recoveries.”

In addition, disposal of the bank’s immovable assets is presently on hold as the matter is before the courts, which might further hold-up the institution’s liquidation.

“All immovable assets of the bank consisting of land and buildings with an original book value of $16,7 million are currently in dispute and the matter is now in the Courts,” said Mr Chikura.

Allied Bank is currently in the process of final liquida-tion after the Reserve Bank of Zimbabwe cancelled its operating licence in Janu-ary last year saying it had found the bank to be “grossly undercapitalised and is fac-ing chronic liquidity chal-lenges.”

This was after a voluntary surrender of the licence by the bank during the same month. Two creditors’ meet-ings have so far been held, the first one last year and another one earlier this year.

The first meeting of Allied Bank creditors was held on June 24, 2015 and 93 claims valued $9, 7 million were provisionally accepted while 15 claims valued at $356 196,30 were rejected for non-appearance.

During that first meeting, the claims presented revealed that Government ministries, parastatals and municipali-ties were among the bank’s creditors.

And a second meeting of creditors was held on Feb-ruary 25, 2016 for consid-eration of the Liquidator’s Report and further proof of claims, and claims worth over $6 million were pro-visionally accepted by the

Master of High Court.

Mr Chikura said as at the mid of last month just over $800 000 had been recovered, while another creditors meet-ing is in the offing.

“As at 15 March 2016, about $802 448 had been recovered being $217 851 collected from the various debtors; $182 387 realised from disposal of movable assets; and $402 209 recovered from Government stocks and claims on the Reserve Bank of Zimbabwe.

“We are likely to hold another special meeting of creditors to give those creditors who missed the two previous meetings, an oppor-tunity to prove their claims.”

Allied Bank’s assets were recorded at $25,8 million while liabilities stood at $34,4 million, when the High Court approved its liquida-tion in February 2015.●

BH24

TAA:DI251386-Y22

3

BH244

By Funny Hudzerema

HARARE -Zimbabwe’s largest seed company, Seed-Co (Pvt) Ltd has acquired new maize breeding laboratory which is expected to benefit the country’s agricultural sector through the breeding of smart climatic responsive seeds.

Seed-Co has been doing its seed sampling in South Africa resulting in the company tak-ing between 10 to 12 years to come up with a new seed vari-ety, but with the new equip-ment that process is expected to reduce to between five to six years.

Speaking during a field-day at Arnold Research Station in Shamva, Seed-Co non-execu-tive director Mr Michael Ndoro said the company is working towards introducing technolo-gies which fight against food shortages through introducing seed varieties which are suita-ble for different climates.

“The laboratory will be used to enhance breeding progress through what is called Molecu-lar Marker Assisted selection, to make new inbred lines using Double Haploid Technology and advanced plant pathology.

“Overall, the laboratory will contribute to enhancing food security in Zimbabwe and reducing dependence on for-eign laboratories by doing seed quality testing locally,” he said.

The new laboratory is expected to be functional by the end of this month with some remain-ing components to be imported from Europe.

Mr Ndoro added that the food security will be achieved through, among other benefits, the speeding up of the pro-cess of releasing new varieties for the benefit of farmers in marginal environments who will get new varieties much quickly; and increasing breed-ing gains in terms of improving the yield potential of existing

varieties.

Currently Seed-Co has secured 2 000 tonnes of fast growing seeds for the next season to fight against climate change.

He added that Government continues to put in place various initiatives to ensure that it stimulates production in all sectors of the agriculture sector.

“Government has already signed the Comprehensive Africa Agriculture Develop-ment Programme (CAADP) as a catalyst for mobilising local resources for financing the agriculture sector in Zimba-bwe.

“This programme is also aimed at strengthening their efforts to enhance the development of agriculture to improve incomes of the rural populations. On the technical side, we com-mend Government for working with development partners such as the Food and Agricul-

tural Organisation to deal with matters related to soil fertility; while also paying attention to the livestock sector,” he said.

Seed-Co managing director Mr Denias Zaranyika said the company will continue to work on new seed varieties and low nitrogen varieties which will benefit farmers under El Nino conditions.

“You will have noticed that our key focus is to continuously review our basket of products with a view to developing or improving on the yield and drought and disease tolerant levels of our cultivars across in all types.

“While we have successfully introduced very short and ultra-short season varieties we continue with other efforts to look at the development of varieties that are adapted to low nitrogen requirements to assist especially our farmers in the rural areas,” he said.●

5 NEws

seed-Co acquires new maize seed breeding lab

BH246

By Funny Hudzerema

HARARE - The leather indus-try has called on Government to intervene in the exportation of raw hides by unscrupu-lous leather importers which is affecting the growth of the sector.

Secretary for Zimbabwe Leather Shoe and Allied Workers Union Mr Isidore Zindoga said there is capacity for growth of the leather industry if value addi-tion is taken seriously.

“We are fighting to re-establish the industry and one of the challenges we are now facing is the importation of raw hides by unscrupulous individuals.

“The unscrupulous individuals are being offered importation licenses by the ministry of agriculture irrigation and mech-anisation and the people are exporting raw leather to other countries,” he said.

The country still largely exports raw hides. In 2011, the indus-

try exported 5,4 million kg of hides and skins worth $28, 2 million while in 2012, over 5,5 million kg worth $29,2 million were exported.

“Raw leather is the initial stage in leather production so once we run short of those we now have the big problem because we are no longer able to pro-duce quality leather.

“By exporting raw leather we are also exporting employment opportunities as a country and this is far away from the value addition concept,” he said.

Mr Zindoga added that the industry should be revitalised through addressing issues affecting the sector from the farmer who produce the leather to the level of manufacturing.

“Our challenge now is to link rural farmers to the market since they are now the big-gest producers of leather after leather production has shifted from commercial farmers to rural.

“We have to remain competitive on the export market but we can’t be competitive enough as long as we don’t have enough relevant skills,” he said.

Currently the country is export-ing high volumes of raw leather and importing it back as fine leather which is stifling the growth of the leather industry and has resulted in the closure of a number of leather compa-nies.

“The leather industry doesn’t require large amounts of money but there is need to retool the industry through acquiring new equipment and reducing the exportation of raw leather. There is also need to review the leather industry strategy since the last review was done four years ago.

“The strategy of the leather industry strategy is very noble but nothing has been done to see that the strategy is fully functional practically,” he said. ●

Zim leather industry calls for raw hides exports ban

7 NEws

By Munesu Nyakudya

HARARE –Innscor’s bakery division, Bakers Inn is aiming to expand into the region once it captures 50 percent of the local market, CEO Mr Ngoni Mazango has said.

Mr Mazango told BH24 that the company first need to ensure a 50 percent market share from the current 44 percent.

“At the present we have got 44 to 45 percent market share and we see an opportunity to get to at least 50 percent market share.

“When we get there we want to move into the region. We still need to ensure that every tuck shop in Zimbabwe and every vendor have got our product.

“We have got the capacity to ensure that we cover the whole of Zimbabwe before we venture into the region,” he said.

He said they are currently car-rying out some due diligence on

how to enter the region.

Mr Mazango said the company has got a sound distribution network nationwide in terms of the vehicles and has just acquired around 200 new vehicles to ensure that their products reach every customer around the country.

He added that as a business they have not been spared from some of the challenges in the economy but this has not stopped them from coming up

with measures to boost sales and reward their customers.

Bakers Inn is currently conclud-ing its ‘Buy and Win’ promo-tion, which has been running over the past month, which the CEO said had driven up their volumes.

“We are very happy with the promotion. We saw our volumes growing by 20 to 25 percent and we are very grateful to our customers,” Mr Mazango said.●

8 NEws

Bakers Inn eyes regional markets

Mr Ngoni Mazango

HARARE - After post ing a 0.12 week-on-week gain on Fr iday, the mainstream industr ia l index has main-ta ined the posit ive momen-tum opening the week with a 0.48 gain to c lose at trading at 98.40.

Beverages giant Delta led the movers with a $0,0060 to trade at $0,5710, whi le mi lk processor Dair ibord rose $0,0048 to c lose at $0,0558 and Old Mutual added $0,0047 to $2,2172.

Giant te lecoms Econet c losed at $0,2594 after a $0,0044 gain and seed producer Seed-Co rose by $0,0015 to sett le at $0,6515.

On the downside, Radar lost $0,0048 to $0,0200, Power-speed retreated $0,0020 to c lose at $0,0230 and Bar-c lays shed $0,0009 to trade at $0,0270.

Fidel i ty L i fe eased a mar-

ginal $0,0004 to sett le at $0,1026.

The mining index was f lat at 20.16 as Bindura, Fal-gold, Hwange and RioZim al l

maintained previous pr ice levels at $0,0102, $0,0050, $0,0300 and $0,1100 respect ively

- BH24 Reporter ●

ZsE9

Equities maintain bullish run

MovERs CHANGE ToDAy PRICE UsC sHAKERs CHANGE ToDAy PRICE UsC

WILLDALE 11.11 0.20 RADAR -19.35 2.00

DAIRIBORD 9.41 5.58 POWERSPEED -8.00 2.30

OK Zim 3.07 4.02 BARCLAYS -3.22 2.70

ECONET 1.72 25.94 FIDELITY LIFE -0.38 10.26

DELTA 1.06 57.10

INNSCOR 0.26 18.75

SEED-CO 0.23 65.15

OLD MUTUAL 0.21 221.72

INDEx PREvIoUs ToDAy MovE CHANGE

INDUSTRIAL 97.92 98.40 +0.48 pOints +0.49%

MINING 20.16 20.16 +0.00 POINTS +0.00%

10 ZsE TABlEs

ZsE

INDICEs

stock Exchange

Previous

today

11 DIARy oF EvENTs

The black arrow indicate level of load shedding across the country.

PowER GENERATIoN sTATs

Gen Station

11 April 2016

Energy

(Megawatts)

Hwange 356 MW

Kariba 453 MW

Harare 30 MW

Munyati 16 MW

Bulawayo 22 MW

Imports 0 - 400 MW

Total 1123 Mw

• Upcoming AGM - Falgold, KPMG Building, Corner 14th Avenue/Josiah Tongogara Street, Bulawayo,13 April, 1000hrs

• 26th April 2016 - The Fifty-Sixth Annual General Meeting of the shareholders of British American Tobacco Zimbabwe (Hold-ings) Limited; Place: British American Tobacco Zimbabwe Offices, 1 Manchester Road, Southerton, Harare; Time: 10.00 hours...

• 05 May 2016 - Barclays Bank of Zimbabwe AGM; Place: Meikles Mirabelle Room; Time: 1500hrs

THE BH24 DIARy

NAIRoBI - Kenya's central bank will provide a facility to any bank or microfinance institution that faces liquid-ity problems through no fault of its own, starting on Monday, Governor Patrick Njoroge said on Sunday.

Njoroge said the facility, for which he did not give the amount but said had no upper limit, would be availa-ble for as long as necessary to provide a sense of calm and reiterated that the finan-cial sector was stable.

"From Monday, we will avail a facility to any bank or microfinance institution that comes under liquidity for no fault of its own. We will avail this facility for as long as is necessary," Njoroge told a news conference.

Last week, the central bank put Chase Bank Kenya into receivership after its gross non-performing loans rose sharply last year. The mid-sized bank was the third lender to be taken over by the central bank in nine months, fuelling worries over

the health of the sector.

On Saturday, President Uhuru Kenyatta said he supported central bank Njoroge's actions to protect

depositors' money.

"We are really dealing with any fear, anxiety that is out there," Njoroge said. `- Reuters●

REGIoNAl NEws 12

Kenya central bank to help banks that face liquidity pressure Rand hits 1-week high on improved

risk appetite

JOHANNESBURG -South Africa's rand firmed to a one-week high against the dollar on Monday as inves-tors bought into riskier but high-yielding emerging markets assets.

"The riskier emerging mar-ket currencies are doing quite well this morning. The risk sentiment seems to be better than what it was through the course of last week," said ETM Ana-lytics economist Jana van Deventer.

At 0832 GMT the rand was trading at its strongest level since April 5, firming 1.04 percent to 14.8200 per dollar. - Reuters●

Hedge funds and other large speculators boosted wagers to the highest since at least 1992 that the yen will strengthen versus the dollar, as Japan’s currency advanced to a fresh 17-month high.

The yen is heading for a seventh day of gains, the longest winning streak since September 2012, as specula-tors defied rhetoric from Jap-anese authorities aimed at checking its advance. Chief Cabinet Secretary Yoshihide Suga repeated Monday that officials are watching the foreign-exchange market “with vigilance,” and will take appropriate action if necessary. Deutsche Bank AG and Bank of Singapore Ltd. said the yen remains at or below fair value.

“The yen is nowhere near overvalued,” making it hard to justify intervention, said Sim Moh Siong, a foreign-ex-change strategist at Bank of Singapore. “Even though the yen has moved quite sub-stantially against the dollar, you look at yen relative to euro and other currencies it hasn’t really strengthened all

that much.”

The yen rose 0,2 percent to 107.84 per dollar as of 6:48 a.m. in London after advanc-ing to 107,63, the strongest level since Oct. 27, 2014. It was little changed at 123,09 per euro.

Japan’s currency jumped 3,4 percent last week and has appreciated against all its 16 major peers this year as investors flock to haven assets amid a rout in stocks around the world.

yen Undervalued

A measure of purchasing power parity from the Organ-isation for Economic Co-op-eration and Development shows the currency is stil l about 2 percent undervalued versus the dollar.

“Japan’s biggest problem with the current yen rally is that it is justified by funda-mentals,” George Saravelos, a strategist at Deutsche Bank in London, wrote in a client noted dated April 11. The yen “is stil l expensive or only just approaching fair value” against the dollar, he wrote.

Speculators increased bets on yen gains against the dol-lar to 98,130 contacts in the week ended April 5, the most in Commodity Futures Trad-ing Commission data starting in 1992. In mid-December, bullish yen contracts were at a 10-month low of 26,400.

A JPMorgan Chase & Co. index measuring price swings among Group-of-Seven currencies rose toward the highest since 2011 last week. Price swings acceler-ated after the yen strength-ened past 110 per dollar for the first time in 17 months, fueling speculation that the central bank will intervene to weaken it.

“The yen can appreciate in the short term, but the mar-ket is extremely long,” said Steve Brice, chief invest-ment strategist at Standard Chartered Plc in Singapore. The currency may strengthen to 106 per dollar, “and then the Bank of Japan may come in and intervene, and push it back beyond 110,” he said

- Bloomberg●

INTERNATIoNAl NEws 13

yen renews 17-month high as hedge funds make record bullish bets

Millions of confidential doc-uments have been leaked from one of the world’s most secretive law firms, exposing how the rich and powerful have hidden their money.

Dictators and other heads of state have been accused of laundering money, avoiding sanctions and evading tax, according to the unprece-dented cache of papers that show the inner workings of the law firm Mossack Fonseca, which is based in Panama.

But how does tax avoid-ance work?

1) An individual or company transfers assets or cash to the nominal ownership of an offshore company, with the transaction facilitated by a law firm such as Mossack Fonseca.

2) The offshore company is registered in a tax haven regime such as the British Virgin Islands, which doesn’t

disclose who the beneficial owner is and which doesn’t co-operate with other tax authorities. So the owner of the assets can avoid national taxes in their resident coun-try – whether income tax, capital gains, or corporation tax – which might otherwise be due.

This is purely an account-

ing issue. The individual doesn’t move to live in the tax haven. And the compa-ny’s employees can be based anywhere in the world. Going offshore be used to hide the proceeds of a crime from the legal authorities.

3) To access the money, the offshore company could lend money with a zero interest

rate to a company based in the home country of the individual which is also ulti-mately owned or controlled by the individual or com-pany that is avoiding tax. This individual or company can then extract cash from the recipient company while paying minimal tax. – Inde-pendent.co.uk●

14 analysis14 ANAlysIs

Panama Papers: How does off-shore tax avoidance work?