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Illegal Monies in Offshore Bank Accounts

Consequently FML would leave the deposits with Royal Bank for the tenor of the loan. The deal was consummated through Regal Asset Managers and was to mature in December 2004, at which time it was anticipated that the share price of First Mutual would have blossomed, allowing Royal Bank to harvest its own investment and depart profitably. The deal led to Regal Asset double glazing rainham Managers possessing 57 million FML shares. Royal Bank gave FML some securities in the form of treasury bills as collateral for the deposit.

The Reserve Bank as well as the curator wrote off this investment because at the point FML was suspended at the ZSE. However the simple fact that it was suspended failed to invalidate its own value. Recent events have shown that this investment has generated huge capital value for Regal Asset Managers as the ZSE rebounded. Yet the curator appreciated this investment negatively. About March 2004 there had been a contagion effect at FML as a result of challenges at Trust Bank. This led to the forced departure of this FML CEO and chairman. FML was suspended by the local bourse as investigations into the financing structure of Capital Alliance’s acquisition were completed. Because of the pressure caused on FML, it wanted to withdraw the deposits held by Royal Bank, contrary to the arrangement.

FML could not locate and return the treasury bills that was provided as collateral by Royal. Royal Bank suspected that these had been placed with ENG, another asset management company which collapsed in December 2003. A public row broke out. Royal Bank executives sought counsel from Renaissance Merchant Bank, which had brokered the deal, and also the Chairman of the ZSE, who agreed with Royal the deal was valid and FML had to honor the agreement. At this point FML sought court intervention in an effort to force Royal Bank into liquidation. The curator contested the FML position leading to his taking it for arbitration. Royal’s position remained that if FML fails to return the securities then it won’t obtain the funds.

Royal bank supervisors claimed political interference on the problem. The Royal Bank executives think that the governor, against his better judgment, decided to act against Royal Bank under the pretext of the political strain. In retrospect, the governmental support for cracking the whip in Royal gave credence to the rumour that the governor had an underlying agenda in taking Royal and merging it into ZABG due to its strong branch network.

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