Kamfinsa lawmaker, Kang’ombe, queries why ZCCM-IH, BoZ could not bail out Investrust Bank

Kamfinsa Member of Parliament, Christopher Kang’ombe, has argued that the Bank of Zambia (BoZ) should have gone for an option of funding Investrust Bank PLC through the financial market rather than declaring it insolvency.

Kang’ombe said BoZ should have offloaded part of Investrust Bank’s shares on the market rather than going the route of insolvency.

“One of the roles of the Central Bank is to act as lender of last resort, meaning lending money to a commercial bank such as Investrust Bank,” Kang’ombe said according to a post on his official social media handle on Tuesday.

He said the second option of funding was getting finance from the financial markets by offloading part of the Investrust bank shares.

Read more: predictably-trading-on-investrust-bank-securities-on-lusaka-securities-exchange-halted

Kang’ombe observed that 1.4 percent of shares in Investrust Bank were held by ZCCM-IH.

He said it was expected that the majority shareholder would inject money in the bank or offload part of its shares to those willing to inject cash.

The remaining shareholders are Meanwood Venture Capital  with 17.5 percent and others with 11 percent  respectively.

He asked: “Is it because Investrust bank was no longer profitable?”

Kang’ombe went on to ask if it was because Investrust bank paid out loans to individuals and firms that could not pay back in good time.

He sought to know if BoZ had already extended loans to Investrust Bank on numerous occasions at a discount rate.

“Why was ZCCM-IH not willing to engage the minority shareholders on resolving the matter with the regulator (BOZ)?” Kang’ombe queried.

He said it would be necessary for more details to be provided to the public on why Investrust Bank had become insolvent despite these two options of funding.

BoZ on Tuesday announced the repossession of Investrust for being insolvent.

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