'Remo wins landmark case'

HARARE - Interfin Securities Limited (Interfin)’s failed Supreme Court bid, challenging a High Court order to return $3 million-plus worth of Remo Investment Brokers (Private) Limited (Remo) shares, has a potential to cause market havoc, analysts say.

The latter’s lawyers also said following the Supreme Court (SC) ruling they had approached the Zimbabwe Stock Exchange for the matter to be resolved amicably and in a manner that would minimise stock market disruptions.

“If this matter cannot be resolved amicably, we will simply act according to the court order and follow our shares wherever they are and retrieve them,” he said.

“That (judgment) will obviously cause panic, alarm and discomfort in the market, which is what we are trying to avoid.”

The parties had been locked in a two-year dispute and in which Interfin was accused of disposing of Remo’s shares — lodged as security for a $600 000 borrowing — yet Mohamed Mahmed’s firm had fully repaid its loans.

In the February High Court ruling, Justice Maxwell Takuva said Interfin had no bonafide defence to hold on to the shares.

“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,” he said.

“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… from... whomever may be in possession of the... shares,” Takuva added and which ruling Interfin challenged before Susan Mavangira of the SC.

With the parcel of shares comprising CBZ Holdings Limited, Dairibord Zimbabwe, Old Mutual and TA Holdings Limited shares, Remo had argued that Interfin had no legal basis — whatsoever — to hold onto the shares.

As the superior court judgment has effectively empowered the deputy sheriff “to seize the shares forming part of the dispute from innocent third parties” and which may include foreign investors, the ruling has presented major headaches for regulators and the Zimbabwe Stock Exchange.

“The ruling will affect confidence on the local market as shares exchange hands everyday and how do you undo that?” said Tafadzwa Chinamo, the Securities Exchange Commission of Zimbabwe (SecZim) chief executive.

The development comes as Alban Chirume’s bourse and the regulator had been urged — by Remo’s representatives — to “lock away or freeze” the shares until finalisation of the  disputes.

In two successive letters in March 2012, the investment group prayed for swift action that was overlooked.

Comments (1)

This has very serious repercussions on the ZSE. Why did the Securities Commission not act on this matter? You state Remo wrote two letters asking for the shares to be Locked away. Innocent investors could lose their shares. Foreigners will regard this action as another version of the land invasions. What is the solution Securities Commission??

Anonymous - 23 November 2014

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