The lack of credibility of the Reserve Bank in managing this case is vulnerable when one considers that some banks were given over eight months to stabilise under curators, e.g. Intermarket and CFX Banks, and could recover. But Royal and Trust Bank were beneath the curator for under two months before being amalgamated. The media increased concerns regarding the curators assuming the role of undertaker rather than nurse, and hence burying these banks.This seemed to confirm that the potential for a hidden agenda on the part of the Central Bank.
Chando was an superb financial engineer who set up Victory Financial Services following a stint with MBCA. He’d been the brains behind the setting up of the double glazing rainham predecessor of Century Discount House he afterwards sold to Century Holdings. Royal Bank originally had a fascination with discount houses and so at beginning had comprised Victor as a substantial shareholder. He later acquired Barnfords Securities which Royal intended to bring in-house.
Victory Financial Services was involved in foreign currency dealings, using overseas companies that purchased free funds from Zimbabweans abroad and bought raw materials for Zimbabwean businesses. 1 such deal with National Foods went sour and the MD reported it to the Central Bank. On investigations the bargain was discovered to be clean however, the RBZ went ahead to publish he was involved in illegal foreign currency transactions and connected to Royal Bank. However this was a transaction done by means of a shareholder as a account holder, in which the bank had no interest. What confused matters, was that Victory Financial Services was put in the same building as Royal Bank.
After failing to nail Chando to some criminal charges, the Central Bank issued an arrangement for Royal Bank to induce him out as a shareholder and board member. It’s absurd that the Central Bank would vet who is a shareholder or not in banks – particularly when the individuals had no criminal records.