Remo ruling presents dilemma

HARARE - A High Court ruling that Interfin Securities (Private) Limited (Interfin) must return Remo Investment Brokers (Private) Limited (Remo)’s shares worth $3,3 million has presented Zimbabwean industry and market regulators players with a conundrum since the stockbroking firm is now defunct.

This comes as the parties had been locked in a two-year long battle, and in which the former was accused of disposing of Mahomed Mahmed’s shares — lodged as security for a $600 000 loan — when the latter had fully repaid his dues.

“Respondent (Interfin)’s argument that it sold the property because applicant had defaulted defies logic in that it has not been explained why respondent accepted re-payment of a loan when it had liquidated the shares,” Justice Maxwell Takuva said in a Wednesday ruling, adding that Interfin had “no bona fide defence for its actions”.

“The respondent be compelled to return... (share certificates) within three days of this order, failing which the Deputy Sheriff is authorised to seize the share certificates and shares... from respondent or whomever may be in possession of the said share certificates and shares,” he added.

The parcel of shares comprised CBZ Holdings Limited, Dairibord Zimbabwe, Old Mutual and TA Holdings Limited shares.

And as the markets were trying to digest the impact of the ruling yesterday, which also empowered the deputy sheriff to seize any scrip traceable to the pre-2012 transactions and debacle, market players are reportedly uneasy about how Remo would be compensated, while questions linger about why regulators, including the Securities Exchange Commission, had no extensive involvement in the matter from the outset.

For instance, key questions related to why the shares were not “locked away” until the matter was resolved in the courts, analysts say.

In the meantime, Remo won on the basis of lawyer Jonathan Samukange’s key arguments that Interfin had no legal grounds — whatsoever — to hold onto the scrip.

“Shares are like cows, not ordinary rural cows but branded cows, one can follow...  and recover them. We pray... to have our shares back and we know how to get them,” he said.

Earlier, the benighted Interfin had said it was no longer in possession of the shares, as they had been lodged with the sherriff following an earlier court order.

Comments (1)

Izvi zvachifanana nekuti watengesa mufushwa wangu akachengeta mari. Magistrate voti wadya mufushwa dzosa mufushwa wacho. Uhm apa kana Remo yacho na lawyer wayo vachiti we know how to get them back, I wonder how. Here is what happens: You give your share certificate to a broker of 100 shares. The same shares could be sold to 100 diff people and those 100 diif people could end up selling it on and on. How do you go to the current holder of the shares (if you know that) and say you bought illegal shares apa that person is holding a share certificate in his/her name. Liability in this case should have stopped at Interfin. What this case has done is to exonerate Interfin coz when the deputy Sheriff calls at Interfin, Interfin will essentially point to the market as the shares are no longer in their hands. Then what does the dep sheriff do.... Follow the trail while Interfin relaxes? This judgement sucks.

Mufushwa Wakadyiwa - 17 February 2014

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