ZSE challenges Meikles' $50m lawsuit

HARARE - The Zimbabwe Stock Exchange (ZSE) has challenged the $50 million lawsuit that was filed against the local bourse by diversified conglomerate Meikles Limited (Meikles), businessdaily has learnt.

Alban Chirume, the ZSE chief executive, said his organisation lodged an appearance to defend with the High Court on Monday to give the bourse adequate time to prepare a substantive response to the lawsuit.

“On the response to the summons in the Meikles Case, the Zimbabwe Stock Exchange has filed a notice of appearance to defend. A substantive response will be filed once it has been prepared,” he said.

A fortnight ago the ZSE and its chief executive was slapped with a lawsuit by Meikles for “delictual damages for patrimonial loss” accusing it of violation of the bourse’s rules of engagement by suspending it without consultation and further cautioning investors to trade its stock carefully.

Upon filing the suit in the High Court (HC) on February 28, Meikles — through Mutamangira and Associates — gave the ZSE a 10-day ultimatum to respond, prompting the latest move.

In the application, Meikles — with a market capitalisation of $31 898 723 — said the suspension of its stock had “major, substantial and unimaginable damages” on its brand.

It noted that it “is presently the subject of negative perception by investors and there is panic and great unease among the plaintiff’s creditors, bankers, members and other stakeholders”.

Even, though, Meikles’ share was suspended for seven days, its price has continued to trade at 14 cents on the ZSE.  Meikles chairperson, John Moxon has also sought “relief” from President Robert Mugabe’s government over the manner in which its share was temporarily suspended by the ZSE in consultation with Tafadzwa Chinamo’s Securities Exchange Commission.

It is not clear, though, what sort of relief Moxon is seeking.

About a week ago, a local weekly reported that the Meikles chair was facing a shareholder revolt over a number of issues bordering on corporate governance issues and particularly the $12 million owed by British Virgin Islands-domiciled Gondor Capital (Gondor), and another Moxon company Coolbay.

According to the company’s website, Meikles’ major shareholders include Gondor at 47 percent, Old Mutual Life Assurance Company Zimbabwe 6,9 percent, Clayway Investments 5,5 percent while others hold 40,6 percent.

The diversified group, with interests in hospitality, retail and recently mining, is suing the bourse as the ZSE action “did not comply with its own rules of engagement”.

Moxon argued that the RBZ debt — including accrued interest — was agreed with central bank officials and that they were not engaged or consulted on the issue prior to the suspension.

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