Shareholders revolt against Tetrad Bank
TETRAD Investment Bank (TIB), which lost its banking license eight years ago due to viability
problems before restructuring its ownership through a debt-to-equity arrangement with
depositors, is facing a shareholders’ revolt.
Several simmering issues have now exploded mainly due to a lack of return for investment for
equity stakeholders and a number of unresolved underlying matters.
The revolt has been particularly triggered by Bard Santner Investors (BSI)’s takeover of private
clients’ portfolios from TFS Management Company, which is under liquidation, last month.
BSI is a subsidiary of Bard Santner Markets Inc, a new Harare-based financial advisory services
firm. It took over Tetrad’s managed clients portfolio after reaching an agreement with the
liquidator. Some of BSI clients under the arrangement are also shareholders in TIB.
After reading about BSI’s takeover of TFS’s managed clients portfolio in the media, some TIB
shareholders have been flooding the new asset management firm seeking help on numerous
problems. This has fuelled a shareholder revolt at TIB.
Against this backdrop, a host of minority shareholders are now increasingly growing impatient
with the TIB board of directors running the bank’s affairs, including managing its nearly US$13
million property portfolio from which it collects rentals and leverages it for other financial
benefits.
Since October 30, 2018, a five-member board led by economist Dr Appollinaire Ndorukwigira, who
is the acting chairman, has been running the affairs of the bank.
The bank is now owned by its shareholders, not Tetrad Holdings as it used to be before the debt-toequity scheme of arrangement. Information gathered shows that shareholders are worried that
they have gone for eight years without receiving a return on investment. The shareholders are
complaining about the lack of audited financial accounts.
Shareholders have not received audited financial accounts for the past three years. The last
financials they received were qualified statements for 2018 which only came in 2022. The other big
issue troubling shareholders is the impression that management or directors are benefiting from
the bank’s diversified property portfolio.
Shareholders are also disgruntled because the directors have made a series of empty promises on
purported takeovers and capital injection which have not materialised.
The other issue arising is that some of the shareholders are mainly old people. As a result, some of
them have died without benefiting anything from their investments.
Yet shareholders say there is no sense of urgency on the part of management or directors. To make
matters worse, there has also been a communication drought from management or directors to
shareholders.
Some of the agitated shareholders have spoken out against the current untenable situation.
Jackie Levey, Sakuma Trading director and a TIB shareholder said: “TIB directors are running
scared now because for the first time they have got not just little old Jackie Levey and Sakuma
trading gunning for them, but also influential shareholders. They are facing guys who have got
more power and influence, and a stable asset management company will help.
“The problem is that they are the only ones making money from the current situation; so they don’t
want to lose it. That’s why they are being defensive. I stood up at the last annual general meeting
(AGM) and I said on behalf of my clients ‘we don’t have faith in any of you — you are not
trustworthy, you do not communicate’ and in the last three weeks they began sending messages
because they are panicking. But it’s the first time they have had real serious demands for
accountability and return for investment, while shareholders oppose their actions.”
Another shareholder Divaris Dimitri said: “Before my mother (Kiki Divaris) died, she was opposed
to the decision to bring in the new board. Ever since then there has been no communication from
them. The story is that these guys have been running the bank with carte blanche, that is without
accountability and communication for some years. The promise of prospective buyers or investors
has been going on for years, but there are no progress.”
In a letter to shareholders, dated September 9, 2022, acting TIB company secretary Judy Conway
suggests the bank is more concerned about distancing itself from a transaction in which BSI took
over Tetrad’s managed clients portfolio, not addressing the real issues.
Small shareholders are currently grouped and exercise proxy through Tetrad Creditors Group
Trust represented by John Pybus, a banker.
Contacted for comment TIB director Harry Orphanides said there is now confusion over the
situation.
“There seems to be a lot of confusion here and I’m due to meet with our attorneys to get the issue
resolved. Bard has no authorisation to deal with the bank. Bard was dealing with the issues of TFS.
Yes we do have a problem in that the shareholders were never informed that Bard was gonna take
over this portfolio and I have a problem with that.”
Asked why the board is not communicating with TIB shareholders, Orpahnides said: “The bank
deals with shareholders of Tetrad, its a total separate entity; they have got nothing to do with TFS,
which was put under judicial management and is a separate company to the bank. The board
represents Tetrad Investment Bank.”
Bard chief executive Senziwani Sikhosana spiritedly defended his clients who are also bank
shareholders and those who are not, saying they have done nothing wrong in engaging investors as
they only want to get a return on their investments.
“Some of our clients are shareholders in Tetrad Investment Bank. Through them, other minority
shareholders have reached out to us for help.
“As a result, we want to know how their investment portfolios are performing.
“That’s why we are here. That’s our job. When we act and ask questions on behalf of our clients, we
expect answers whether the company is listed or unlisted; not stonewalling, intimidation, or scare
tactics.
“Our clients expect nothing less than that and so do our regulators. There is no passive investment
in our world. We simply want our clients and other shareholders to get a return on their
investments. We are open for business to those who want to engage us and we are always ready to
help.”-The Herald
