Swazi Observer

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STATUS CAPITAL UNDER CURATORSHIP

By NOMFANELO MAZIYA | 2024-12-27

Status Capital Building Society (SCBS) recently entered into curatorship, a significant development with implications for its investors and future.

This is a legal process overseen by the Financial Services Regulatory Authority (FSRA).
FSRA announce that Status Capital Building Society had been placed under curatorship effective December 19.

This decision, according to the statement issued by the regulator, follows significant non-compliance issues that have hindered SCBS's ability to fulfil its obligations to stakeholders and continue normal operations. Despite previous attempts by FSRA to address these issues, SCBS's financial situation has continued to deteriorate.

Following a thorough evaluation, FSRA concluded that curatorship was necessary to safeguard the interests of SCBS members, creditors, and the overall integrity of the financial system.

FSRA emphasised that the curatorship process will be conducted transparently and with the best interests of SCBS members, creditors, and stakeholders in mind.

The curator will work closely with FSRA to ensure all actions taken are appropriate and beneficial.

FSRA requested the public to cooperate with the curator and allow them to carry out their duties without interruption.

The regulator also committed to having regular updates on the curatorship process made available to stakeholders as they become available.

In the case of SCBS, FSRA has appointed Tripple 8 Consulting’s Bimal De Silva as curator under Section 71(b) of the FSRA Act, 2010.

During the curatorship, De Silva will assume control of SCBS's assets, records, and operations.

Authority
He will have the authority to take steps to safeguard and recover SCBS's assets, collect all monies and debts owed to SCBS, determine the root causes of SCBS's financial difficulties, file and defend lawsuits on behalf of SCBS, refer any criminal activity identified during the investigation to law enforcement agencies, and determine whether SCBS can be restructured and continue operations or if liquidation is necessary.

This essentially means that De Silva takes temporary control of SCBS, its assets, and operations.
His primary function is to assess the building society's financial health and determine the best course of action for its future.

In a statement, De Silva recognised the critical role SCBS investors play in the organisation's stability.

To address any anxieties this situation might create, he pledged to maintain open communication with investors.

Investors can expect ongoing information about SCBS's financial situation and its future prospects.

A clear and accurate picture of SCBS's financial position will be communicated.
De Silva encouraged investors to raise concerns and ask questions. This open dialogue would allow investors to voice their worries and participate in the process of finding solutions.

“Efforts will be made to rescue the business of the building society,” said De Silva.
Status Capital Building Society reported a significant increase in losses for the 18-month period ending June 30, 2023.

Losses surged to E31.9 million, a 233 per cent jump from the E9.5 million recorded in 2021. This dramatic loss escalation was primarily attributed to a substantial increase in operating expenses, which skyrocketed from E11.1 million to E46.4 million.

The society's financial health further deteriorated during this period.
Total assets declined by 16 per cent to E148.1 million from E176.6 million in 2021.
Loans and advances to customers plummeted to E15.6 million from E186.2 million in the previous year.

Net cash from investing activities also contracted significantly, dropping to E1.2 million from E85.1 million in 2021.

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