Home » Business » Kingdom Bank Africa Under Final Liquidation

KINGDOM Bank Africa, a Botswana based entity owned by Nigel Chanakira has been placed under final liquidation after the High Court in that country granted the order.The High Court has appointed Mr Max Marinelli and Mr Chris Bray, both chartered accountants in Gaborone to oversee the liquidation. The two “will shortly” commence the necessary winding-up processes, the Bank of Botswana (BoB) said yesterday.

Mr Chanakira remained invested in KBAL after he sold his 30 percent stake in the local financial institution AfrAsia Bank, also under liquidation, in September 2013.

The cash and equity deal resulted in Mr Chanakira, through family vehicle Crustmoon Investment, exiting AfrAsia. AfrAsia then sold its 35,7 percent in KBAL to Mr Chanakira.

The transaction was completed late last year.

According to the Botswana central bank, KBAL is insolvent with liabilities exceeding assets by $17 million.

It said KBAL had placed significant funds – at least 70 percent of its total assets-on deposit with Afrasia Bank Zimbabwe Limited.

AfrAsia, founded by Mr Chanakira also suffered liquidity problems and in February this year, surrendered its banking licence and was subsequently placed under liquidation.

These problems have negatively impacted on KBAL, the recoverability of its funds on deposit, its ability to continue as a going concern and its ability to meet its obligations to depositors. Prior to the final order, KBAL was under a temporary management. The temporary managers found that the asset base of the bank had been severely eroded due to a number of factors which gave rise to liquidity problems and ultimately insolvency.

“Further to the public notice of March 10, 2015, issued by the Bank of Botswana, this is to inform depositors and other members of the public that the period of temporary management of Kingdom Bank Africa came to an end on May 18, 2015,” said BoB.

“The Bank of Botswana has determined, in accordance with Section 34(d) of the Banking Act, to petition the High Court for a winding-up order on the grounds that KBAL is insolvent and that its assets exceed its liabilities by approximately $17 million.

“The petition for the final winding-up of KBAL was brought before the High Court of Botswana on May 12, 2015. The High Court granted a final winding-up order in respect of KBAL.”

The BoB said based on the information obtained during the early stages of the temporary management, it commissioned a forensic audit of the financial affairs of KBAL, with a particular focus on some investments and placements at foreign financial institutions.

The forensic audit is ongoing.

Source : The Herald