Tetrad directors application struck off urgent matters roll

Business Reporter
Tetrad Investment Bank (TIB) directors and managers’ urgent chamber application has been struck off the High Court roll of urgent matters after they failed to show reasonable cause.

Through its lawyers, Gill, Godlonton & Gerrans, TIB and The Trustees of the Vincent Trust had filed an urgent chamber application for an interdict against Bard Santner Investors (BSI) to stop it from engaging the defunct bank’s shareholders who are demanding a return on investment.

In a ruling on Thursday, Justice Esther Muremba said TIB’s case was not urgent and should proceed through the normal court process.

“Justice Muremba found that the matter could not be dealt with on an urgent basis. The applicant could not show cause why it should be treated as urgent; they could not identify that which could not wait, requiring the court to intervene urgently,” BSI lawyer Mr Everson Samukange said.

He added, “As a result, the matter was struck from the roll of urgent matters and TIB was ordered to pay the respondent’s costs. It was also found BSI as a duly licensed asset management company had not forced any of TIB shareholders to seek its services.

“Further, it was found the allegation of reputational damage by applicants cannot be a justification for the court’s intervention on an urgent basis.”

Mr Herbert Mutasa represented Tetrad.

This comes amid an ongoing heated row between TIB shareholders and directors/management for control of the closed financial institution’s US$13 million assets portfolio.

Shareholders led by Jackie Levey and Dimitri Divaris are battling it out with directors led by Andre Lourenco Vermaak and trustees such as John Pybus.

Since October 30, 2018, a five-member board led by economist Dr Appollinaire Ndorukwigira, who is the acting chairperson, has been running the affairs of the bank which is now owned by its shareholders.
In its court application, TIB and its trustees had said they had “reasonable apprehension” that BSI has certain information about shareholders as a result of “data breaches” that could cause “irreparable harm” to their business interests.

“TIB has a reasonable apprehension of irreparable harm arising from certain data breaches relating to the information that it is in possession of,” the court application said.

TIB said the second applicant, (the Trustees of the Vincent Trust) being the data subject concerned has an equal apprehension of irreparable harm arising from the aforesaid data breach.

“BSI has been, since the beginning of the month, using the aforesaid personal information, in particular, the e-mail addresses and telephone numbers to contact TIB’s shareholders seeking from them their authorisation to take over management of their shareholding in the Bank.

“Even though it is apparent that its actions are unlawful, BSI has refused to make an undertaking to cease the unlawful processing of the personal information that it obtained from TIB’s database.

“TIB will suffer serious reputational damage unless the unlawful actions of BSI are immediately arrested,” TIB said in its application.

However, the judge said there was nothing urgent about TIB’s application as it could not even establish cause for intervention on an urgent basis.

Prior to this, TIB had written BSI a letter dated October 6, 2022, demanding that it ceases interacting with its shareholders.

However, BSI replied on 10 October, saying it had done nothing wrong in engaging TIB shareholders as that is precisely why it exists, and thus its action posed no harm to anyone at all.

“This interaction between BSI and the said shareholders poses no harm to either your clients or anyone,” Samkange of Samkange Hungwe Attorneys wrote in reply.

Bard Santner chief executive Senziwani Sikhosana said was relieved and happy with the court’s finding on this matter so far and awaits its finalisation in due course through the normal court processes.

“However, we find it strange that Tetrad Bank directors and management are trying to tell shareholders what to do with their investments, while in the process dragging us into their issue when we are merely representing our clients and those who also have an interest in unlocking value in their investments.

“We will always stand with our clients who are also shareholders in the bank. “Even those who are not our clients, we are willing to help if approached. That’s our business. That’s why we are there.”

The revolt by shareholders was specifically triggered by BSI’s takeover of private clients’ portfolio from TFS Management Company, which is under liquidation, recently.

BSI is a subsidiary of Bard Santner Markets Inc, a new Harare-based financial advisory services firm offering a wide range of products to clients to unlock value in their investments, especially dormant or defunct assets.

As part of its consolidation process, BSI took over Tetrad’s managed clients portfolio after reaching an agreement with the liquidator. Some of BSI’s clients under the arrangement are also shareholders in TIB, hence their interest in the bank’s affairs.

After reading about BSI’s takeover of TFS Management Company’s managed client’s portfolio in the media, some TIB shareholders have been flooding the new asset management company seeking help on numerous problems.

This has fuelled a shareholders’ revolt at TIB, which directors are battling with.

Against this backdrop, a host of minority shareholders are now increasingly growing impatient with the TIB board of directors running the bank’s affairs, including managing its nearly US$13 million property portfolio from which it collects rentals and leverages it

Shareholders are worried and fretting that they have gone for eight years without receiving a return on investment.

Besides the lack of return on investment, the shareholders are complaining about the lack of audited financial accounts.

The last financials they received were qualified statements for 2018 which only came in 2022.

The other big issue troubling shareholders is the impression that management or directors are benefitting from the bank’s diversified property portfolio from which they are receiving rentals and other benefits.

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