BUSINESS REPORTER
The closed Tetrad Investment Bank (TIB)’s directors and shareholders are fighting over control of the business which has a property portfolio of about US$13m from which it collects rentals and leverages its assets for other financial benefits.
The revolt has been triggered by Bard Santner Investors (BSI)’s takeover of private clients’ portfolio from TFS Management Company, which is under liquidation, last month.
BSI is a subsidiary of Bard Santner Markets Inc, a new Harare-based financial advisory services firm.
Some of BSI clients under the arrangement are also shareholders in TIB, hence their interest in the bank’s affairs and their approach to the asset management company for help.
A number of TIB shareholders have been flooding the new asset management firm seeking help on numerous problems after it emerged that BSI had snapped up TFS Management Company’s managed clients portfolio.
This has fuelled a shareholders revolt at TIB, which directors are battling with as it spins out of control.
This comes as minority shareholders are now increasingly growing impatient with the TIB board of directors running the bank’s affairs.
Since October, 30, 2018, a five-member board led by economist Appollinaire Ndorukwigira has been running the affairs of the bank.
The bank is now owned by its shareholders, not Tetrad Holdings as it used to be before the debt-to-equity scheme of arrangement.
Information obtained this week showed that shareholders are worried as they have gone for eight year without receiving a return on investment.
Besides lack of return on investment, the shareholders said they have not received audited financial accounts for the past three years.
The last financials they received were qualified statements for 2018 which only came in 2022.
Jackie Levey, Sakuma Trading director, says her company which was engaged by TIB to mobilise deposits and investment funds had a property portfolio and loans worth US$5.3 million when the group, including the bank, was placed under judicial management.
“TIB directors are running scared now because for the first time they have got not just Jackie Levey and Sakuma trading gunning for them, but also influential shareholders. They are facing guys who have got more power and influence, and a stable asset management company to help. The problem is that they are the only ones making money from the current situation; so they don’t want to lose it. That’s why they are being defensive. I stood up at the last AGM and I said on behalf of my clients ‘we don’t have faith in any of you; you are not trustworthy, you do not communicate’ and in the last three weeks they began sending messages because they are panicking. But it’s the first time they have had real serious demands for accountability and return for investment, while shareholders oppose their actions.”
Another shareholder Divaris Dimitri said her late mother Kiki Divaris was opposed to the decision to bring in the new board.
“Ever since then there has been no communication from them. The story is that these guys have been running the bank with carte blanche, that is without accountability and communicating for some years. The promise of prospective buyers or investors has been going on for years, but there are no progress,” Dimitri said.
A disgruntled shareholder said there was an impression that management and directors could be benefitting given the fact that the bank has a diversified property portfolio from which it is receiving rentals.
“Lack of trust in the directors and past announcement of takeovers and capital injection have not materialised. Fellow shareholders are mainly old people. Some have died. There is no sense of urgency on the part of management who are fully aware of the demographics of the shareholders.”
Instead of dealing with these issues raised by the shareholders, TIB directors have been dismissive of the minority equity stakeholders’ grievances.
They have been defensive and witch-hunting to intimidate shareholders, while targeting the financial advisory services firm, BSI, which has been approached for help. In a letter to shareholders, dated September 9, 2022, acting TIB company secretary Judy Conway sais the bank was more concerned about distancing itself from a transaction in which BSI took over Tetrad’s managed clients portfolio, not addressing the real issues.
The letter said the transaction created an impression that TIB is a subsidiary of Tetrad Holdings, which it no longer is the case.
“We wish to assure shareholders of Tetrad Bank Investment Limited that the bank has no association with the transaction described in the article, and that TIB is owned by its shareholders and is not a subsidiary of any company mentioned in the article.”
The article in question related to BSI’s takeover of TFS Management Company’s clients portfolio to unlock value for them.
Minority shareholders are currently grouped and exercise proxy through Tetrad Creditors Group Trust (TCGT) represented by banker John Pybus.
TCGT has been complaining about shareholders’ approach to BSI for rescue instead of addressing their concerns.
TIB was incorporated in 1995 as Tetrad Securities Limited. The institution commenced operations in 1996 after obtaining a licence to operate as a discount house in terms of the Banking Act.
