FORMER Zimbabwe Stock Exchange chairman Mr Mguquka Ndodana has fired a broadside at ZSE chief executive Mr Alban Chirume labelling him a “fascist” for taking away the powers of stockbrokers to effectively run the exchange.
In an exclusive interview, Mr Ndodana said the ZSE boss was the brains behind Statutory Instrument 100, which he authored and introduced during his tenure as CEO of the Securities and Exchanges Commission of Zimbabwe.
SI 100, he said, was not effective enough to prevent situations such as the hullabaloo that followed the bungling of the suspension of trade in Meikles shares from the ZSE.
The SI replaced a committee of stockbrokers, ZSE members who used to dictate and run the affairs of the bourse, with a board now controlled by the CEO. He said during his era, suspending a company’s shares was unheard of.
During the time the affairs of the ZSE were run by the committee of members, the CEO had no authority to unilaterally effect suspension of a company. Such action required the full participation of the ZSE committee members.
“It was like a death sentence. As such, as a committee we would call the company and explain to them the breaches of the listings rules and tell the company to go back and address the issues with its auditors,” Mr Ndodana said.
He added that the SI 100 was a “fascist instrument to frustrate the original arrangement” that existed prior to the introduction of the ZSE board. The ZSE CEO’s leadership style has also recently come under further spotlight following revelations the ZSE will relocate from the CBE to plush Ballantyne Park suburb.
ZSE interim chairperson Mrs Eve Gadzikwa last week acknowledged that the exchange might have “erred” in the manner it handled the suspension of Meikles. She said the ZSE was looking into the matter with a view to amicably resolving the issue with all parties.
“We are hoping to reach an amicable position with all parties and the matter)is getting the urgency it deserves. But, more importantly, we do agree that we may have erred here and there.”
Meikles was suspended on February 16 this year over discrepancies in the amount the conglomerate, also listed on the London Stock Exchange, where the group has a secondary listing, claimed it was owed by the Reserve Bank of Zimbabwe. The exchange alleged that there were material discrepancies between the amount confirmed as owing by RBZ, $76,1 million, and the amount presented in the company’s 2014 full year results, $90,8 million, with no explanation.
The suspension has since been lifted, but Meikles was directed to clarify the issue.
He pointed out that the process to address any anomalies in a company’s financial results or issues of breach of listings rules was done outside of public attention considering that the stock exchange was such a sensitive institution.
“The ZSE is a sensitive issue; you do not want a fascist with a big stick running the bourse. He (Chirume) is the author of everything happening there after he introduced SI 100 saying he was worried about governance issues.
“We would sit as a committee with the affected company and deliberate on the issues without attracting public attention,” the ex-ZSE boss said.
Mr Ndodana said back then, if the CEO picked up an anomaly on a company, he would call in the ZSE committee to discuss the breach of rules or regulations and give the firm an opportunity to respond prior to taking a decision.
Commenting the suspension of Meikles, Black Business Forum general secretary Mr Tafadzwa Musarara said BBF was dismayed by the ZSE’s decision to arbitrarily suspend Meikles Ltd from the stock exchange without following due process and, in haste, its decision to reinstate Meikles back on the bourse.
He said ZSE was insensitive to the interests of listed companies, local and foreign investors and the general public, adding that its unbecoming behaviour must be tamed forthwith so that it reverts to international best practice. Further, Mr Musarara said, plans by ZSE to relocate to Ballantyne Park, from a location more accessible to the public, smacked of an elitist leadership style.
“ZSE is an important instrument in the drive for foreign direct investment, but its conduct of late has been painfully disappointing.”
The National Business Council of Zimbabwe also blasted the ZSE for its plans to relocate to Ballantyne Park saying this was elitist and would distance ZSE from Government’s thrust and position of decentralising national operations to enable and encourage participation of previously marginalised Zimbabweans.
NBCZ president Dr Keith Guzah said the domestic economy thrived on the back of an 80 percent self-employed population with over $3 billion passing through their hands and emphasis must be on tapping on the money and encouraging participation on bourse.