SECURITIES and Exchange Commission of Zimbabwe (SECZ) chief executive officer Tafadzwa Chinamo says the absence of active shareholder participation on the local market muffles the voices of minority shareholders in many companies.
Report by Business Reporter
Chinamo also said shareholders often took a passive stance on investment and did not monitor their investments.
In emailed response to NewsDay, Chinamo said recently: “The voice of the minority is still not being heard as the market still lacks active shareholder participation.
“It’s high time investors get to know and understand that there are rights and responsibilities associated with any investment. Investors have a right to adequate and timely provision of material information about companies they have invested in for informed decision-making purposes.”
He said SECZ was focusing on investor education and awareness being part of its core mandate, while investor education also contributed towards the promotion of good corporate governance and ethical practices. Chinamo said Lifestyle Holdings took the scheme of arrangement route of which SECZ believes lacked the requisite disclosure necessary for informed decision making.
“Schemes of that nature proceed without offering shareholders enough information on the state of the company involved, a gap that is normally addressed through auditing of company accounts,” Chinamo said.
“The scheme of arrangement route also avoids some of the delisting processes that a company has to go through once a decision to delist has been taken.”
He said a company was supposed to get a formal approval from the Zimbabwe Stock Exchange (ZSE) of which Lifestyle did not in this case. He, however, noted that the delisting process was meant to ensure that minority shareholders were not exposed and SECZ wanted investors to make informed votes at such scheme meetings. Lifestyle Holdings Limited (Lifestyle) formerly TN Financial Holdings Limited delisted from the ZSE after failing to raise capital on the local market.
The group recently set-up TN Harlequin Luxaire International Limited in Mauritius, and made Lifestyle a wholly-owned subsidiary of the new Mauritian unit.