Home » Business » Zibawu Demands Probe Into AfrAsia

AfrAsia Bank Limited is caught in the centre of stormy allegations by workers who claim that management wrote off thousands of dollars worth of their personal loans and presented them in the books as bad debts.Workers representatives, Zimbabwe Banks and Allied Workers Union, have since demanded a full investigation into the allegations and an end to alleged victimisation of a worker who spilled the beans. AfrAsia bank.

In one instance, a total of $89 000 was written off against one account belonging to a top company executive, yet the privilege was not extended to other workers. Chief executive Mrs Lynn Mukonoweshuro argues that the amount was not written off, but was paid out of the company’s corporate social responsibility budget to assist an employee whose daughter suffered from a terminally illness.

“The matter was accordingly approved by our (AfrAsia) board. The medical cost concerned for (the) daughter were not written off as being alleged, but were paid up from the corporate social responsibility budget,” she said.

Zibawu said it had proof several thousands of dollars in top executive loans were written off with well placed sources saying that while they had proved beyond doubt that loans amounting to $89 000 had allegedly been irregularly written off there was also suspicion that executive loans amounting to $500 000 had also been written off.

In a letter to Mrs Mukonoweshuro, dated February 17, 2014 Zibawu general secretary Mr Peter Mutasa questioned a number of suspected irregular transactions saying it reflects serious accounting and corporate governance delinquencies.

“The documents we have show that your executive management’s overdrawn accounts were credited through corresponding entries debiting the banks profit and loss account. Curiously these transactions were in-putted by a branch manager contrary to the industry norm where clerks originate transactions,” Mr Mutasa said.

The bank workers’ lobby group said if AfrAsia made a conscious decision to write off loans for top executives, the same privilege should have been extended to other staff.

In response to enquiries by Zibawu, Mrs Mukonoweshuro professed ignorance on the matter and requested details on the alleged financial irregular transaction. She said she was taken aback by the allegation.

“We will not take issues where we are accused of breaching corporate governance lightly and would like to get to the bottom of this as a matter of urgency,” Mrs Mukonoweshuro said.

Zibawu also sent correspondence of its reservations to AfrAsia chairman Mr Charles Wawn who confirmed receiving the queries and promised to look into the matter.

“I would like to thank you for your concern and bringing this matter to the board for resolution. My board will investigate the concerns you highlighted and resolve this in line with (our) finding,” Mr Wawn said.

The AfrAsia CEO said such assistance has hitherto been extended to ordinary workers including instances where a staff member was involved in an accident while another lost furniture after their house was burnt down.

“We find these to be deeply humanitarian cases, which the group dealt with within our capacity in line with support for staff from time to time,” the AfrAsia boss said.

Zibawu refuted the explanation saying her explanations did not sum up as documents showed that the amount in question was transferred from bad debts written off account to the profit and loss account not the corporate social responsibility budget as she claimed.

The workers union also questioned why the transaction was not disclosed in the group’s 2013 financial accounts if this was above board as it is “quite substantial.” Zibawu added that the transaction amounted to an income and demanded details of tax paid.

“We are also of the view that such a transaction would call for a disclosure to the regulator. If our view to this regard is correct, was this done?” Mr Mutasa asked.

Zibawu demanded explanation on why the board would sanction the writing off of an amount of $89 000, which is more than half of the total profit for the year 2013. AfrAsia made a profit of $175 000. The workers body also wanted to know how the corporate responsibility budget is funded and when the AfrAsia Bank board had approved of the transaction.

“Finally, we indicated that our members gly suspect that executive management overdrawn accounts were written off, was this investigated by your good office? If so what were the findings,” Mr Mutasa said.

Zibawu said its members were justified in questioning the suspected irregular transactions as they posed a threat to the bank, depositors, shareholders and the workers.

The reservations by Zibawu come as the Reserve Bank of Zimbabwe has mooted amendments to the banking act to make criminal irregular or related party loans amid revelations that directors, senior managers and shareholders of banking institutions account for most of the non-performing loans in the banking sector.

As at December 31 2013, the level of total insider loans in the banking system was US$175,3 million (including Interfin). About US$117,4 million (66,97 percent) of the loans in the banking sector was non-performing.

Source : The Herald