Participants and observers of the Zimbabwean financial sector have been closely following the collapse of the financial empire constructed by Patterson Timba since 1999 on the foundation of his Renaissance Merchant Bank.
The former grain trader extended his activities through a parent company called Renaissance Financial Holdings, encompassing Africa First Reassurance Corporation and with large shareholdings in others including Rainbow Tourism Group.
But Timba’s structure turned out to be a house of cards recently as the Finance Ministry suspended Renaissance Bank management – including Timba – and the Reserve Bank of Zimbabwe placed the investment bank under curatorship.
Stockbroker Thomas Shava is convinced that Timba lost control of Renaissance due to questionable deals. “Some transactions made by companies linked to Timba in the Zimbabwe Stock Exchange simply contravened sections of the Securities Act as there was total disregard for corporate governance,” said Shava.
VOA Studio 7 reporter Gibbs Dube traced Timba's decline.
The Reserve Bank itself, meanwhile, has not had much luck finding buyers for assets it had put on sale hoping to pay off some US$1.2 billion in debt.
RBZ companies on the block include exchange-traded Tractive Power Holdings and Astra Holdings as well as Homelink, Tuli Coal and several others.
Sources said prospective buyers are worried no proper valuations of the firms have been prepared, raising concerns the companies could turn out to have large debts.
Economist John Robertson said most Zimbabweans cannot raise funds to buy shares in the Reserve Bank firms or purchase them outright.
“When they are sold they might get prices which are below the market values because of the lack of buyers with decent prices for them,” said Robertson.
Economist Masimba Kuchera said the RBZ has not followed proper procedures in moving to dispose of such assets. “We have not yet seen any government gazette or tender notice authorizing the sale of these RBZ assets,” Kuchera said.
