There is need to understand ENG Capital’s ability to mobilise Zimbabwe dollars. At its peak ENG was peerless and unrivalled in the Zimbabwean financial market in its ability to raise and access Zimbabwe dollars.
The ENG Capital Group treasury was made up of the following individual units Century Bank, Century Asset Management, Century Discount House, Leasing Company of Zimbabwe, ENG Asset Management and Hybri Micro-Finance Institution. ENG Capital group had a market capitalisation of US$ 75 million, just before the RBZ descended on the Institution. This made ENG the single biggest combined treasury in the Zimbabwe Financial market.
The installation of RTGS immediately allowed the Authorities to trace which Institutions were the biggest movers of money and the money market. The authorities were alarmed to learn that ENG (an unknown firm to them) and which didn’t have a political “Godfather” was allowed to control such resources. A further study was made to trace the political inclination of the shareholders and directors. ENG was not well represented in the political ladders. The belief was that any independent financial resources could be used and was being used to clandestinely support the opposition or politicians deemed undesirable. In addition business owners were supposed to show gratitude by donating and financing the political set up. Any meaningful business group was supposed to be well known and its owners be vetted by the authorities’ political process. Any business which didn’t fit that bill had to be either closed, nationalised or shareholding restructured.(by any means necessary). Dr Gono needed a high profile scapegoat and start his new career with a bang.
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9 comments:
I salute you Muponda but the truth is you were involved in dubius deals with investors funds, u bought less liquid assets with short term deposits implying that you had money but youi were not insovent. As such you deserved the cross fire!!
Sandizvo here? Hongu we can factor politics but the bottomline is in the first place your banking was criminal
Jothan,
Thank you for acknoledging that ENG was solvent and had assets.This goes to the heart of the allegation of missing funds.
I am not sure whether you followed the allegations leveled against ENG Asset Management.An asset manager holds assets.In Zimbabwe's case of Hyper Inflation an Asset Manager is supposed to hedge the loss of purchasing power by holding assets which can match and outperform inflation.
Once the asset manager has assets liquid or illiquid they then proceed to arrange lines of credit which will be used to retire any short term deposits or investment.There is nothing illegal here.
If you are familiar with how Financial institutions you would know that a Bank can give a 10 year loan even though they may olny be holding short term deposits.Such is the nature of banking and thats why there are over night accommodation facilities,secured and secured lines of credit which can be used to support such structures.But if directors and managers are arrested or rumoured to be arrested it affects any institution's ability to implement its strategy and result in value destruction.
Thats a strong responds and you have exposed reality in few lines. So is there any means say this Zanu PF fiasco is over that you have chances to retreave/ recover your assets? Am pained about how you and your guys, & Nicholas Vingirai have been handled, Intermarket has been taken over by finhold for peanuts. Say in the event that Zimbabwe recovers have you set up some strategies for being ENG again?
Dear Jonathan,
Thank you for visiting my blog and your comments.ENG brand and its assets are now history.I do not plan to follow it up or its assets.I am focusing on a new brand and firm.I only wish if people can understand how different institutions function.There has been an assumption that every institution is a Bank.But thats not true because there are Asset Managers,Building Socieities,Merchant BANKS,Finance Houses and many others.They all function differently even though they are Financial Institutions but they are not all Banks and can own various different assets.
Thats why people go to different institutions for different needs because they have different capacity,products and services.
You are heading where i wanted you to and i think its nw ripe for me to introduce myself to you. I am too a NUST though Applied Mathematics graduate. During the Zim Bank crisi i was working for IDH and later joined RBZ under the CIS guy. Currently, i nw reside in Sydney Australia where i am doing PhD in Quantitative Finance majoring in Exotic option Pricing.
I wanted at some shortest possible time your bright minds and ideas on how best and whats required to start something great from your experience with setting ENG. I thank you in advance for your encouraging and helpful response
Jonathan,
Nice to know we went to the same Varsity.
My experience is that you need a lot of planning ahead of setting up.You need to line up your team well in advance.Whilst many people may have never had of ENG or thought of it as a new and small firm we started planning about settin up ENG from our college days.So ENG was about 7 years in the making in terms of planning and putting together everything and everyone.In your case i assume you already have some people in mind if not you need to start buildin that team and support network now.
The other obvious thing is you need to surround yourself with very sharp and qualified people.In the ENG structure we had at least 12 chartered accountants,5 lawyers and other specialised analysts.Our basic rule was you needed to be at least at same level or more qualified than the directors to join our Research team which was the heart of the ENG operation.Because the Research team gives the direction and generates ideas and refines concepts.My current brand is also ideas and research driven.These are intangible assets which no-one can take .
You are really giving me an angle of thought i had never head of and getting it at the very mature time. There are very few people who are willing to give that line of thought as you. Of course i have and have discussed this in principle with a few guys whom i am yet to instil confidence that these things can be done. But had never thought of incorporating people from other backgrounds.
The other thing is how do you mobilise the initial capital to startup such a thing?
I think the focus should be the skills base and right balance in the team.The capital requirements are not as great unless if you choose to start a traditional bank.The best would be to start as a skills driven operation thin on capital but heavy on skills,qualifications and talent.
I am not so sure about the cost structure now in Zimbabwe in terms of start ups.But if you raise about 50k to US$100,000 it should be enough to set it up.The Project promoters should be prepared to go for months with no salary and should be ready to be messenger,tea boy and secretary till things stabilise.And long hours will be required and you should be ready for routine discouragement from most people you meet.
Under the RBZ Act were Asset Mangers allowed to speculate on commodities? I remember there were allegations that your firm purchased 6 months production of bricks which were financed by shareholder capital
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