Published by the government of Zimbabwe
9 November 2009
analysis
Harare — THE Securities Commission last week suspended ISB Securities and its managing director Mr Geoff Mhlanga from carrying out any activities on the Zimbabwe Stock Exchange.
SEC is a mutual association that regulates the activities of the ZSE and associate players such as stockbrokers and fund managers.
The ZSE regulatory body said ISB and its managing director were suspended for not complying with requirements to submit returns and also for refusing SEC appointed inspectors entry into ISB offices.
In addition, the securities firm and its director were suspended for refusing appointed accountants and auditors, KPMG, entry into ISB offices.
SEC said it acted in accordance with section 49 (1) (a) of the Securities Act Chapter 24:25 as defined in Section 2 (1). The commission unearthed irregularities at ISB after investigating the company's conduct in managing trust funds.
ISB and Mr Mhlanga's conduct, SEC said, were against provisions of Section 50 and 51 of the Securities Act.
"Please be advised that we have suspended ISB Securities Private Limited and Mr Geoff S Mhlanga in terms of Section 49(1) (a) of the Securities Act Chapter 24:25 from carrying out all licensable activities defined in Section 2 (1) other than settling outstanding deals as at the end of November 2009," said SEC.
SEC said its officers were refused access to ISB offices on Monday while those from KPMG were prevented from carrying out their assignment on Wednesday in contravention of sections 101 and 51 (2) of the Securities Act.
ISB had earlier returned to KPMG explaining why it had refused the firm's officers entry into its offices. ISB said the officers did not carry identification particulars and had also not booked an appointment prior to visiting.
"On November 4 your team came to our offices ostensibly for this purpose in the company of two SEC officers as prescribed in the SEC Act section 51. Regrettably, they were not carrying any identification or had they made any appointment," said ISB.
The securities company said it had wanted formal clearance on the issues regarding confidentiality and privacy of all information that the officers wanted.
Said ISB: "We also had to formally agree on the signing off any reports that you generate."
The company then proposed for a "more mutually convenient time to discuss precise terms of reference to comply and deploy appropriate staff to cooperate".
ISB requested more time to prepare for its "visitors" saying this would maximise effectiveness.
"We also naturally would like to assist in preparing preliminary reports as all our records are computer based. This would maximise on-site effectiveness," said ISB.
However, SEC would have none of it as it still suspended ISB and Mr Mhlanga a day after receiving correspondence from Mr Mhlanga himself.
SEC was set up in accordance with provisions of the Securities Act of 2004, which sought to establish a commission that regulates capital and securities markets with the ultimate view to ensure integrity and professionalism. SEC replaced the Zimbabwe Stock Exchange management committee.
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