Zimpapers Logo

Business Editor
MEIKLES Limited has appealed for government intervention to resolve the impasse over its recent suspension from the Zimbabwe Stock Exchange (ZSE) as it accuses the Securities Exchange Commission of Zimbabwe (SEC) of failing to handle the matter impartially.

The hospitality group was temporarily kicked out of the bourse on February 16 with the approval of SEC over allegations it overstated a $90 million debt owed to it by the Reserve Bank of Zimbabwe.

The giant firm has since filed a $50 million lawsuit against the ZSE for delictual damages over the manner its suspension was handled.

It has also written to the exchange complaining about the contents in the notice issued to the public last week advising of its removal from temporary suspension.

Meikles chairman John Moxon yesterday expressed reservations over the integrity, professionalism and impartiality of the exchange watchdog.

He said the SEC also blundered by approving the group’s suspension and conducting “a trial by public media” over the company’s shares without giving it the opportunity to respond.

Moxon also alleged “a representative of SEC was part of the panel that implemented and effected” the suspension of Meikles against the rules of justice as provided for in the Securities and Exchange Act.

“To that end Meikles will be seeking the government’s intervention as it is of the view that the illegal suspension of the trading of Meikles’ shares by the ZSE with the approval of the SEC and the manner in which the SEC has dealt with Meikles issues has a “detrimental effect on Zimbabwe’s ability to attract the much needed investment into the country,” he said.

Last week ZSE admitted it had erred in suspending Meikles without verifying its course of action and announced the immediate lifting of the suspension.

The bourse then gave the group up to yesterday (March 2) to respond to the submissions by RBZ on the amount owed and to issue a statement on the financial effects and any litigation issues on the debt.

The exchange alleged that there were material discrepancies between the amount confirmed as owing by the RBZ being $76.1 million and the amount presented in the March 31 financials as $90.8 million.

In the application filed by Mutamangira and Associates, the ZSE is listed as the first defendant and chief executive Alban Chirume as the second defendant.

The company is seeking an order declaring the suspension of the trading of its securities by ZSE null and void, payment of delictual damages for patrimonial loss of $50 million plus interest and costs of the suit.

ZSE has come out the worst in the manner it handled Meikles’ suspension after it failed to follow the proper procedure even though it had concerns over the balances owed by the RBZ.

The company says at the time the financials were published, the debt clearly stood in the region of $90 million but they were still locked in negotiations with the RBZ.

Meikles argues its suspension of the trading of its securities was a grave matter whose consequences are far reaching and have a definite negative impact on the value of the counter.

“The suspension threatens the very existence of the Plaintiff as a publicly traded entity and is a permanent dent to its reputation. As we speak the price of the shares, which is its very lifeblood, have fallen and continue to fall.

“The suspension caused a global buzz and jolted the confidence of its shareholders and business partners,” it said.