The Zimbabwe Stock Exchange Listings Committee has notified the bourse’s chairperson Caroline Sandura of the controversy surrounding Econet Wireless Zimbabwe’s proposed $130 million capital raising exercise after it emerged CEO Alban Chirume unprocedurally approved the circular of the transaction.
Econet published its abridged circular on Tuesday but reports had suggested that Mr Chirume had overrode the Listings Committee in giving the go-ahead to have it released.
Ms Sandura confirmed to The Herald Business that the Listings Committee chairman had raised the issue that the circular was published without their approval.
She however, said it was premature to give a detailed statement with regards the issue, but confirmed that concerns had been raised.
“It will be very premature for me to give a detailed statement as to what transpired on the Econet issue but what I can only confirm is that the Listings Committee chairman raised the issue with me and noted that the Listings Committee did not approve that Econet circular.
“Now that there is an issue raised, we will convene a meeting (today) so that we can get to the bottom of the matter and after that we will give a detailed statement as to what really transpired,” said Ms Sandura.
The Listings Committee is responsible for the administration of all listings-related matters on the exchange. The committee also includes an official from the Securities and Exchange Commission of Zimbabwe .
Stockbrokers who spoke to this publication said they were seriously concerned about the goings on at the exchange as this was not the first time the CEO had made sole decisions without seeking board and committee approvals.
“This is totally unacceptable behaviour by the CEO as he has reduced the market to a circus at a time it is trying to scout for investors. Obviously as the major shareholders we are not happy with this.”
Econet is planning to raise $130 million through a controversial rights offer and linked debentures in order to service its foreign debt. In a circular released yesterday, Econet said, subject to shareholder and regulatory approval, the group intends to raise $130 million through a rights offer and linked debentures in order to facilitate the servicing of its foreign debt.
Under the proposal, shareholders will follow their rights by paying the subscription price of the shares and linked debentures directly outside Zimbabwe into the company’s debt account with Afreximbank.
Econet will offer 1 082 088 944 ordinary shares plus 263 050 614 class A shares at a subscription price of 5 cents for about 82 ordinary shares for every 100 ordinary shares already held in the group.
However, a lot of grey areas surround the deal as it has emerged that the Zimbabwe Stock Exchange Listings Committee did not approve the circular as required by regulations but instead Mr Chirume gave the nod ignoring objections from both the committee and the Securities and Exchange Commission of Zimbabwe (SECZ).
Mr Chirume is not a stranger to controversy as he has been found to be at fault over how he handled Meikles suspension issue and the TN de-listing.
In 2015, Mr Chirume also controversially spearheaded the relocation of the Zimbabwe Stock Exchange from the central business district to the leafy suburb of Ballantyne Park.
Article Source: The Herald