Bank sued over $500k deposit

Published: 25 March 2014

Tetrad Investment Bank (Tetrad) has been taken to court by the Bindura University of Science Education (BUSE) over a $560 000 deposit, which it has failed to pay on maturity.

This comes as the fledgling commercial bank has been hit by a serious liquidity crunch and is embroiled in a $700 000 dispute with controversial businessman Jayesh Shah, in a case that is still running in the courts.

As such, the bank has been given a March 26 ultimatum in Zimbabwe's High Court to pay up the $555 983,33 deposit or face legal consequences.

"The date on which the payment was supposed to be made, November 8, 2013 has since lapsed," the college's lawyers Mtamangira and Associates said.

"The defendant (Tetrad) has refused, failed, neglected to pay the debt despite numerous demands being placed on the strength of the acknowledgement of debt," the lawyers said, adding the money could be paid to the Bindura-based institution directly or through the deputy sheriff

According to the State's case, BUSE entered into a 30-day investment deal with Tetrad in October 2013 and at which point the retail group committed to pay the $560 000 deposit - made up of a $550 000 principal amount and interest of $5 958,33, which was calculated at 13 percent.

While the upmarket institution has managed to cough up nearly $83 000, it has reportedly failed to honour its end of the bargain and contract since November last year.

Despite persistent pressure and demands by BUSE, Tetrad still owes a balance of $473 000.

Last year, the bank also hit the headlines after a serious row with another client Tapvice Enterprises (Private) Limited, although it is the one which was owed $1 million-plus.

In that incident, the bank's executives were summoned to appear before the magistrates' court on "theft of trust property charges" after withdrawing a total of $1 024 284, 88 from the latter's account.

Meanwhile, the financial institution's parent Tetrad Holdings Limited has recently unveiled a $15 million capital injection, although it is seeking some more cash for its upcoming unit.

The group, which has applied for a conversion of its merchant banking licence to a commercial one, is yet to fully unveil or roll-out out its retail services.

Christina Muchekeza, the bank's head of marketing, recently told the Daily News that Tetrad had undertaken massive preparation for the launch of the project and commercial unit.

"…we are renovating buildings and opening new branches not only along Samora Machel, but also at Arundel Office Park, Mutare and Kwekwe," she said, adding the group had also embarked on a serious information technology upgrade exercise aimed at positioning the bank with international standards.

"In the meantime, we are deploying intelligent teller machines (ITMs). This is a new core banking platform which incorporates mobile banking, Internet banking and a whole array of value-added services as well as few points of representation in preparation for this transition," Muchekeza said

Apart from increasing its national footprint, the ITMs project offers clients advanced services or features such as deposit-taking and real time account credits.
- dailynews