The Securities Commission of Zimbabwe (Secz) has suspended ReNaissance Securities Limited from trading after investigations revealed the company was severely undercapitalised, it has been learnt.
According to a notice to capital market players dated June 22, the suspension is for six months.
ReNaissance Securities, a brokerage house, is a member of the Zimbabwe Stock Exchange. All asset management companies have a minimum paid-up capital of requirement of $500 000.
The suspension of the securities company which falls under ReNaissance Financial Holdings comes hardly a month after ReNaissance Merchant Bank (RMB) was placed under curatorship by the Reserve Bank of Zimbabwe.
This follows revalations of investigations revealed systematic abuse of depositors’ funds, a high level of non-performing insider and related-party exposures that included a $9,8 million loan to former CEO Patterson Timba and gross violations of banking laws and regulations after investigations were carried out.
“May you be advised that the Securities Commission has suspended ReNaissance Securities (private) Limited from conducting (sic) dealing firm business/activities, other than settling all outstanding deals, as at end of business day on June 22 2011,” Secz said through letter signed by acting chief executive officer Cordelia Mutangadura.
“This action has been necessitated by the fact that our inspection of the firm, conducted from May 24 to 27 mainly revealed that the firm required recapitalisation.
“Secz called upon the firm to provide a concrete recapitalisation plan and ReNaissance Securities (Private) Limited failed to do so”.
Mutangadura said Secz will continue to engage the securities firm during the period of suspension.
“Should we be furnished with a feasible recapitalisation plan that we approve of, guided by the relevant legislation, the suspension will be reviewed,” said Mutangadura.
Following the placing of curatorship of RMB, the central bank also booted out the boards of directors of RMB and its parent Renaissance Financial Holdings Ltd (RFHL) comprising group chairman Lovemore Moyo, CEO Timba, group executive director responsible for business development Dunmore Kundishora, non-executive director Robert Tindwa and executive director — treasury and structured finance — Shepherd Shara.