Rwanda Development Bank (BRD) has stepped up efforts to recover funds from debtors who obtained credit during the tenure of former chief executive of the bank Alex Kanyankole.

Mr Kanyankole is currently serving a six-year jail term for favouritism and receiving undue benefits charges during his tenTheure in office.

In addition, the court ordered Mr Kanyankole to pay a fine of Rwf22.5 million for mismanagement during his tenure that ran between 2013 and 2017.

However, Rwanda Today has learnt that BRD has now embarked on recovery of loans that were given out during Mr Kanyankore’s tenure.

The latest target was Trust Industries Ltd — the Bugesera-based factory, which manufactures tissue papers, detergents, bar soaps, hand washes and fresh fragrances. The company was recently enlisted for auction. The factory exports its products mainly to Burundi, Democratic Republic of Congo and Uganda.

Public auction

The factory was auctioned on August 7, 2019 by the registrar general through a public auction.

While details of the outcome of the public auction have not been made public, Rwanda Today understands that the management of Trust Industries Ltd had previously made an offer of $12 million to BRD as part of the payment of the initial loan.

BRD also has a choice to retain its 25 per cent shareholding in the company.

BRD is seeking to recover at least $17.5 million from Trust Industries Ltd.

However, the current management of Trust Industries Ltd maintained that it has secured sufficient financing from Equity Bank Group to allow it to pay off its debt and continue operating with an anticipation of breaking even.

“We received a letter from BRD, saying they will auction the property... The auction is yet to be concluded, we do not know if BRD will take the offer,” Michael Kombo, general manager of Trust Industries Ltd told Rwanda Today.

Cause of financial woes

Mr Kombo added that the company’s financial woes can be traced to the manner in which the loan was disbursed, revealing that the funds were released in installments, which made it difficult for the company to utilise the funds efficiently.

Efforts to get comments from BRD proved futile as the company declined to comment on the issue.

“BRD as bank reserves its comment because this was a public auction that was approved by RDB and done by RDB appointed receiver,” Hubert Muhire officer in charge of communications at BRD said.

Rwanda Today has learnt that Ugandan-based Mukwano Group has expressed interest though it is not clear if they have made an offer to the factory.

During the hearing in late March, prosecution submitted that in 2017 Trust Industries received a loan worth over $3. 4 million from BRD.

Prosecution argued that the loan was endorsed by Mr Kanyankole on favouritism grounds while the recipient didn’t qualify for the loan which attracted losses to the bank.

Mr Kanyankole argued that the bank’s mandate was to support local enterprises to grow which included Trust Industries that had run out of raw materials such as oil and paper.

Mr Kanyankole argued that the decision was intended to prevent the factory from closing shop and to protect the bank’s interests as BRD held a 25 per cent stake in it.

However, in the ruling that was delivered in June, the court cleared Mr Kanyankole of the Trust Industry loan fraud, saying due process was followed as the transaction went through the loans committee.