By John Chola

The Bank of Zambia (BoZ) has reaffirmed that the liquidation of Investrust Bank Plc is being conducted strictly in accordance with the law, dismissing suggestions that employee-related claims are being handled outside the statutory framework.

In a public notice issued on Tuesday, the central bank said claims arising from the liquidation would be settled in line with the order of priority prescribed under the Banking and Financial Services Act (BFSA), 2017, stressing that no category of creditors would receive preferential treatment.

The clarification follows recent public statements by alleged former employees regarding the settlement of employment-related claims.

BoZ also disclosed that some former employees have taken legal action over their claims. It said the matters are now before the courts and would be resolved through the judicial process before any further action is taken.

The central bank said any distributions to creditors would depend on the availability of funds and would only be considered after all legal, administrative and accounting procedures have been completed.

BoZ noted that it continues to pursue the realisation of the failed lender’s assets to maximise recoveries for creditors but cautioned that the existence of assets does not automatically translate into immediately available cash.

It said recoveries could be delayed by market conditions, valuation requirements, legal processes, ownership disputes, title verification and other factors affecting the conversion of assets into liquid funds.

The regulator further warned that disposing of assets prematurely at heavily discounted prices could reduce recoveries and ultimately diminish the funds available for distribution to creditors.

BoZ reiterated that it took possession of Investrust Bank because the institution was insolvent and unable to meet its financial obligations as they fell due.

It added that government support provided during the process was primarily intended to protect depositors, particularly small depositors, and safeguard the stability of Zambia’s financial system.

The central bank said it remains committed to ensuring that the liquidation is conducted in a transparent, fair and lawful manner while urging affected stakeholders to remain patient as the process continues.