Transport Minister Obert Mpofu has been fingered for allegedly faking millions of dollars in purchase values for his collapsed Allied bank.

The major shareholder of the collapsed Allied Bank, Trebo & Khays, overvalued and failed to transfer assets pledged as part of the purchase transaction, the bank’s liquidator said on Wednesday.
Allied Bank, which formerly traded as the Zimbabwe Amalgamated Banking Group (ZABG) was created out of the merger of three troubled banks in 2004 as the central bank sought to contain the contagion from a financial sector crisis.
Trebo & Khays, transport minister Obert Mpofu’s family investment vehicle, owned 95 percent of Allied Bank at the time of its closure earlier this year.
In 2012, Trebo & Khays (Private) Limited purchased the then ZABG for $22,5 million, using real estate and $8,4 million in cash.
As part of the payment, Trebo and Khays would surrender land and buildings valued at $16,7 million and a motor vehicle worth $21,000 but, according to liquidator Cecil Madondo, these were never transferred.
Independent valuators had also placed a significantly lower value on the property, less than $5 million.
“So the value was overstated. Faced with this situation, and based on our preliminary investigation, the said immovable property belongs to the bank and it reflected as assets,” Madondo told creditors on Wednesday.
“The immovable assets subscribed as purchase equity consideration by Trebo and Khays should be brought to the fore as these have a material bearing on the success of this liquidation.”
Madondo said he would also seek to secure title deeds of the properties, carry out valuations before disposing them as well as recover vehicles being held by some managers.
Madondo said the bank’s loans worth $3,5 million were mainly related party transactions, with only $26,000 having been recovered.
The bank is likely to write off close to $500,000 in unsecured debts among others.
“The parties to the transaction of the bank should also be asked to account for funds entrusted to them with the banking public subject to the outcome of our forensic audit investigations and a legal opinion,” Madondo said.
According to the bank liquidator’s interim report, the financial institution collapsed due to, among other factors, negative core capital, illiquid toxic assets, management shortcomings, gross undercapitalization, persistent losses, abuse of depositors’ funds, high volume of non-performing loans and bad corporate governance.
When the High Court approved the bank’s liquidation in February, its assets were recorded at $25, 8 million while liabilities stood at $34,4 million.
Allied Bank Limited was issued with a banking licence in 2005 following the sale of assets of other troubled banks – Royal Bank Zimbabwe Limited, Barbican Limited and Trust Bank – and was wholly owned by Allied Financial Services Limited, a government investment vehicle that was managed by the central bank.
Throughout the five year existence to 2010, ZABG faced legal challenges from the shareholders of Barbican, Trust and Royal Bank who challenged the sale of their banks’ assets to ZABC. ZABG was subsequently unbundled in 2010, following an out of court settlement and the return of assets to the banks.
However, according to the Allied Bank liquidator, the unbundling had a negative effect on the bank as it retained all liabilities amounting to $22,5 million, which left the institution critically undercapitalized with a negative core capital of $7,6 million as at December 31, 2010.
As at 31 March 2012 its core capital stood at negative $9,4 million against a minimum regulatory capital requirements of $12,5 million and needed urgent recapitalization.