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Troubled
Financial Institutions (Resolution) Act [Chapter 24:28] Act 31/2004
January
14, 2005
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ACT
To provide
for the administration of troubled financial institutions; to provide
for formulation and implementation of schemes of resolution in respect
of such institutions; and to provide for matters connected with or incidental
to the foregoing.
ENACTED
by the President and the Parliament of Zimbabwe.
[Date of commencement:
14th January, 2005.]
PART
I
Preliminary
Section
1. Title.
2. Application.
3. Interpretation.
PART
II
Declaration
of Troubled Financial Institutions
4. Investigation
of certain financial institutions.
5. Action
where investigated financial institution not troubled but in default of
Banking Act, etc.
6. Declaration
of troubled financial institutions.
7. Effect
of declaration.
8. Transmission
of declaration to certain officers.
9. Confirmation
of declaration.
PART
III
Objects
of Administration and Functions of Administrator
10. Object
of administration.
11. General
powers of administrator in relation to troubled financial institution.
12. Application
of certain provisions of Companies Act to administration.
13. Voidable
dispositions of property by troubled financial institutions and specified
persons.
14. Statement
of troubled financial institution’s affairs.
15. Revaluation
of assets, liabilities and share capital of troubled financial institutions.
16. Initial
meeting of creditors and members.
17. Subsequent
meetings of creditors and members.
PART
IV
Specified
Persons in Relation to Troubled Financial Institutions
18. Identification
of persons responsible for causing financial institution to be troubled.
19. Special
commissioners for taking evidence.
20. Forfeiture
or vesting in State of rights of, or disposal of shares held by, specified
persons.
21. Attachment
of assets of specified persons in satisfaction of their liabilities to
troubled financial institution.
22. Powers
of administrator in relation to specified persons.
23. Transactions
by specified persons.
24. Offences
by specified persons.
25. Power of administrator
to compromise with persons liable to be specified or prosecuted.
PART
V
Schemes
of Resolution and Interim Management of Successor Financial Institutions
26. Powers
of administrator with respect to scheme of resolution.
27. Special
provisions for repayment of depositors of troubled financial institutions.
28. Approval
of scheme of resolution.
29. Consequences
where resolution not possible.
30. Implementation
of scheme of resolution and matters incidental thereto.
31. Duties
of interim board.
PART
VI
General
32. Arbitration
where valuation of shares, etc. by administrator or Reserve Bank disputed.
33. Persons
employed by troubled financial institution before its administration.
34. Application
of assets during administration.
35. Remuneration
of administrator and assistant administrators.
36. Liabilities
incurred by administrator and interim board to have preference over pre-administration
liabilities.
37. Period
of administration excluded in determining preference under mortgage bond.
38. Position
of auditor during administration.
39. Administration
expenses.
40. Cancellation
of declaration.
41. Offences
consequent upon administration.
42. Regulations.
43. Cap. 14:28
not to apply.
PART
I
Preliminary
1 Title
This
Act may be cited as the Troubled Financial Institutions (Resolution) Act
[Chapter 24:28].
2 Application
This
Act shall apply to all financial institutions referred to in section 6(1),
including those formed, registered or incorporated before the date of
commencement of this Act:
Provided
that if the Reserve Bank proposes to issue a declaration in relation to
a financial institution, and, before such declaration is issued, there
is made or presented to the court—
(a) an
application in terms of section 191 of the Companies Act for the sanctioning
of a compromise or arrangement proposed between the financial institution
and its creditors or members, sections 191 to 194 of that Act; or
(b) a
petition for the winding up of the financial institution in terms of section
207 of the Companies Act, Part V or VI of that Act; or
(c) an
application for a provisional judicial management order in terms of section
299 of the Companies Act, Part V or VI of that Act;
shall
apply to such financial institution unless, within thirty days after the
date of presentation of the petition or the making of the application,
as the case may be, the Reserve Bank issues a declaration in respect of
the financial institution.
3 Interpretation
In
this Act:
"administrator"
means an administrator appointed under section 6(1), and includes any
assistant administrator appointed under that provision;
"administration",
in relation to a troubled financial institution, means the administration
of the troubled financial institution in accordance with the notice of
declaration or a scheme of resolution;
"associate",
"board", "curator", "director", "chief
executive officer", "inspector", "registered"
and "supervisor" have the meanings assigned to those terms by
the Banking Act;
"the
Banking Act" means the Banking Act [Chapter 24:20];
"the
Companies Act" means the Companies Act [Chapter 24:03];
"commencement
of the administration" means the date when a declaration in relation
to a financial institution takes effect in terms of section 6(7);
"court",
"Master", "Registrar", "secretary" and "share"
have the meanings assigned to those terms by the Companies Act;
"declaration"
means a declaration issued in terms of section 6;
"document"
includes any document stored in electronic form in any computer;
"financial
institution" means—
(a) any
banking institution registered or required to be registered in terms of
the Banking Act [Chapter 24:20]; or
(b) any
building society registered or required to be registered in terms of the
Building Societies Act [Chapter 24:02]; or
(c) the
People’s Own Savings Bank established in terms of the People’s Own Savings
Bank of Zimbabwe Act [Chapter 24:22]; or
(d) an
asset manager as defined in the Asset Management Act [Chapter 24:26];
or
(e) a
collective investment scheme as defined in section 3 of the Collective
Investment Schemes Act, 1997; or
(f) any
person who carries on a business of acceptance of deposits and other repayable
funds from the public;
"member",
in relation to a financial institution, means¾
(a) a
shareholder, debenture-holder or other person having a right to vote at
meetings of the financial institution; or
(b) any
contributory as defined in section 202 of the Companies Act;
"Minister"
means the Minister of Finance and Economic Development or any other Minister
to whom the President may, from time to time, assign the administration
of this Act;
"officer",
in relation to a troubled financial institution, includes an auditor of
the institution;
"public
funds" means funds held by or on behalf of the State (whether or
not appropriated by Act of Parliament) and includes any moneys advanced
by the Troubled Bank Fund;
"Reserve
Bank" means the Reserve Bank of Zimbabwe referred to in section 4
of the Reserve Bank of Zimbabwe Act [Chapter 24:22];
"scheme
of resolution" means a scheme referred to in section 26;
"specified
person" means any person specified in terms of section 14(8);
"successor
financial institution" means a successor to a troubled financial
institution that is reconstructed, amalgamated or transferred in terms
of section 10(a), (b) or (c);
"troubled
financial institution" means a financial institution in respect of
which a declaration has been made;
"Troubled
Bank Fund" means the Troubled Bank Fund established by the Reserve
Bank for the purpose of providing financial assistance to financial institutions.
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