Business Reporters
The Zimbabwe Stock Exchange yesterday temporarily suspended trading of Meikles Africa shares over the way they accounted for the Reserve Bank of Zimbabwe debt, but failed to give the company formal communication of its move.

Meikles has in the past come under fire over the way it accounted for the debt owed by the Reserve Bank of Zimbabwe with various sections of the capital markets and Parliament raising questions.

The RBZ debt schedule gazetted in August shows that Meikles was owed $40,64 million as at September 30 2013.

This was after accounting for 4,68 percent interest on the original amount owed of $24,88 million.

In 2011, after the October 2010 demerger with Kingdom Financial Holdings the group recorded balances held by the RBZ as $36,82 million from the unaudited restated 2009 January 1 amount of $35 million.

In 2012, the amount was at $38,62 million and then rose to $40,51 million in 2013. However, at F14, the group recorded the balance as $90,8 million, a 124,14 percent increase from the prior year’s amount.

Meikles said the increase in the amount was as a result of interest negotiations, which are based on lending rates.

In a notice, ZSE chief executive Mr Alban Chirume, who is also under the spotlight on how he handled the issue since last year when the results were issued, said the temporary suspension was necessitated by the carrying amount of the asset placed with the RBZ as disclosed in the company’s audited financial statements of March 31, 2014.

The statement says that the RBZ has availed the asset’s carrying amount without disclosing the details. The RBZ’s amount is $76 million and not $91 million. However, well placed sources say that ZSE only sought clarity from the central bank and not Meikles as supposed to be done in any investigation.

Well placed sources said while no formal communication with regards the suspension had not been given to Meikles, it has also been established that ZSE did not contact Meikles to get further information about the issue and as such are not aware that the matter is the subject of litigation.

“They cant ask one party to the issue and take action solely on that. Furthermore, it is an anomaly to announce the decision without first writing to them. Online publications such as FinX and Zfn already had the reports,” said the sources.

Sources also said Meikles had not received any communication from ZSE by 6pm yesterday.

The Herald Business understands that Meikles could take legal action over the issue.

Analysts also believe that the move puts the integrity and professionalism of the exchange into the spotlight at a time when sentiment on the bourse is low.

“The matter should have been handled professionally, especially for a body that is keen to attract investment. How do we market the exchange post demutualisation when such decisions which are detrimental to its integrity are being made. It would have been ideal to wait for the court process and not to make a decision based on submissions from RBZ. The simple thing to do is to call Meikles and ask them whether what RBZ is saying is true or not,” said market analyst Miss Fiona Chigwida.

Noise over the Meikles/RBZ debt issue started last year and in spite of calls from various quarters for the exchange to investigate the matter, no action was taken with a questionable approval done on a non-working day adding to the controversy.