Senator Lilian Timveos has called on the Government to act immediately to stop the mass closure of companies in Zimbabwe, especially banks and mining firms. Speaking during debate in the Senate on Wednesday July 15, 2015, Senator Timveos said the company closures were causing financial hardship on workers, whose assets were now being seized by creditors. Below is her full debate:
PROVISION OF FUNDING TO THE DISTRESSED AND MARGINALISED INDUSTRY FUND
Second Order Read: Adjourned debate on motion on economic challenges resulting in individuals and companies being heavily indebted.
Question again proposed.
SENATOR TIMVEOS: Thank you Mr. President. I am very much thankful for having this opportunity to debate this very important motion. I also want to thank the mover of the motion Senator T. D. Khumalo and the seconder Senator Ncube. Mr. President, the shortage of money in Zimbabwe as formal banking system commonly known as the ‘liquidity crunch’ has led to many companies collapsing. People are being thrown out of work and in some cases, it affects the rest of the family. It affects wives and children; children do not go to school anymore because the fathers will not be working. Companies are closing down and this is worsened by the failure of banks which have failed to actually give the depositors their money after they have closed doors.
According to the Deposit Protection Corporation latest updates on closed banks – Mr. President, if I can just refer to my notes because I want to mention all the banks that have been closed. In view of the current legislative framework no compensation was made to depositors
of failed banking institutions whose resolution methods did not entail liquidation. These are NDH, Highveld, Inter-Market Bank, Inter-Market Discount House, Original Trust Bank, Royal Bank and Barbican Bank whose assets were sold to ZABG in 2005.
More banks were closed down from 2004, that is Afro-Asia Bank, Allied Bank, Interfin Bank, Capital Bank, Trust Bank, Royal Bank, Genesis Investment Bank, Century Discount House, Rapid Discount House and Sagid Finance House. Some of the remaining banking institutions are making super profits out of the misery of the people. Families are breaking apart and some people flee the country to escape debts. Others are engaging in cat and mouse games, changing addresses and phone numbers to dodge their creditors.
Mr. President, this is not right, the Government should put in place policies to assist bankers and companies which are facing heavy debts and liquidation. Mr. President, on a daily basis, we read about properties and goods being auctioned because the owners have failed to pay their debts. People also need protection of the law to save their
goods from loan sharks, illegal debt collectors and unregistered auctioneers who are springing up everywhere. Zimbabweans need protection from these people because they are actually charging exorbitant administration fees which actually makes it worse for the debtors.
The Legal Practitioners Act Chapter 27.7, Mr. President, under Section 9 states that, ‘Only a legal practitioner with a valid practicing certificate can issue out letters of demand and take legal action on behalf of third parties’. Mr. President, this is not happening; there is a lot illegal deals that are going on and illegal sharks that are really sprouting around everywhere. This is giving a lot of problems to the people who owe money and they are actually losing a lot of properties through these illegal debt collectors.
Mr. President, this is a very important motion and surely we should really look at our policies as Government. I am not saying that the people who owe monies should be protected but policies should be clear
to actually make sure that everyone who is dealing with collecting money that is owed is a legal practitioner.
In conclusion Mr. President, I understand the Government is in talks with CABS to revive the Distressed and Marginalised Industry Fund. We hope this facility can be availed soon. However, we should not leave the job of bailing out our companies to the private sector alone. It should be the State’s responsibility to ensure that businesses are operating and that people are going to work. I also like to end by giving you the example of the constituency where I come from, Midlands Province. We have an example of Sabi Gold Mine which was closed over a debt of over US$2m. That mine is actually rich in gold but the workers are now being stripped of their goods by creditors because they cannot pay. The mine was actually the guarantor of these debts while the State was a guarantor of ZMDC debts. This cycle debt has now also affected businesses that are owed money by these insolvent State corporations. So really, Mr. President, as Government we need to look at our policies strongly. I thank you.