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Multi-Million Deal Between Zimbabwe's Social Security Body, Bank in Jeopardy

An $18 million deal sealed early this year by Zimbabwe’s social security authority and the troubled Renaissance Merchant Bank hangs in the balance following a court ruling that the board of the bank which conducted the transaction had been relieved of its duties.

Attorney Thabani Mpofu, representing deposed Renaissance Bank chief executive Patterson Timba, successfully challenged the legality of the board resulting in the High Court on Friday granting a final order barring the board from conducting any business linked with the bank.

Mpofu said the ruling effectively means that the deal signed by the National Social Security Authority (NASSA) and the bank is now in jeopardy.

“The court is yet to make a determination on the legality of the NASSA deal which now stands on shaky grounds,” said Mpofu.

NASSA executives and attorneys representing the board were not available for comment.

The state-controlled entity injected $10 million into the bank and converted to equity an $8.5 million loan to the bank which it failed to repay.

The bank was place under curatorship last year after Timba and his colleagues were accused of abusing depositors’ funds and conducting non-core business activities including the purchase of fuel for local consumers.

Secretary General, Japhet Moyo, of the Zimbabwe Congress of Trade Unions led by George Nkiwane said his organization is worried about workers’ funds being allegedly mishandled by NASSA.