Former capital markets boss reminisces contested directive

Tafadzwa Chinamo

FORMER capital markets boss Tafadzwa Chinamo last week said it was his desire to bring to finality a landmark court challenge brought against the Securities and Exchange Commission of Zimbabwe (SecZim) before his retirement, as he gave a glimpse into the way government handles the organisation.

Chinamo left SecZim at the end of January after serving his mandatory 10-year tenure.

However, at the tail-end of his decade-long term, Chengetedzai Depository Company Limited (CDC), a key capital markets player, unleashed legal action against SecZim, the Zimbabwe Stock Exchange (ZSE) and the Finance ministry, seeking the nullification of a new operating regime that came into force following the entry of new players.

SecZim, together with ZSE, have filed opposing papers against CDC.

But the matter is still pending at the High Court.

Speaking exclusively to NewsDay Business, the respected executive said while he was content with his accomplishments, it was the CDC case that he wished should have been finalised while he was still at SecZim.

“There is always that one thing you never get to finish when you leave a job and for me it’s the court case CDC brought against SecZim, ZSE and Finance ministry,” Chinamo told News Day Business.

“The commission has a perfect record in such matters. So, I am not worried.

“Hopefully a court decision will put the matter to rest,” he added.

The government has been accused of excessive interference in the operations of State agencies.

But Chinamo said he was given room to regulate the markets as he saw fit, leading to the rapid changes, including establishment of Victoria Falls Stock Exchange, which took place in the past decade.

“(There was) very little (interference) as a matter of fact. I can’t remember a single day when my decision was subjected to political review or reversal. I guess it’s a peculiarity of the capital markets compared to other government bodies,” added Chinamo.

Apart from the CDC challenge, several individuals and one institutional investor controlling shareholdings across ZSE-listed firms filed a similar High Court suit last year, against SecZim directives regarding the operations of central securities depositories (CSDs).

High Court papers indicated that following a 2015 SecZim directive for the ZSE and Chengetedzai to activate the migration of registers between their CSDs, there had been resistance by some investors, including applicants to the case.

They argued that they held contractual agreements with Chengetedzai to handle their shares in at least 10 listed firms, which were all dragged to the court.

Montgomery Holdings and the six individual investors, acting as applicants in the case, wanted the SecZim directive to be stayed pending a determination of its legal validity by the High Court.

“It (the directive) is illegal and violates the applicants’ freedom to contract with whomever they want and their freedom of association,” the applicants argued.

“More specifically (it is illegal) in that the applicants have entered into contracts with the third respondent (Chengetedzai) for the purposes of custody, settlement and all related transactions…this was their sole choice,” they said.

  • See full interview in  this week’s edition of the Zimbabwe Independent