23 December 2012

Zimbabwe: Biti Lashes Out At Stockbrokers

FINANCE Minister Tendai Biti has lashed out at stockbrokers' attempts to derail the demutualisation of the Zimbabwe Stock Exchange, saying they had no authority to do so, as the ZSE was created by an Act of Parliament.

Addressing journalists in Harare last Friday, Minister Biti said he was surprised there were individuals masquerading as de facto owners of the bourse, yet it was a statutory creation run by members drawn from stockbroking firms.

"How can an idiot just wake up one morning, saying that 'the ZSE is ours', yet it was set up by an Act of Parliament?" he said.

"They are being myopic. We are proceeding to demutualise it. In fact, we are actually doing them (brokers) a favour as we are offering them a chance to participate in the demutualisation process."

Minister Biti said by February next year, the bourse would be fully automated. He had invited the Mumbai and Johannesburg stock exchanges to come in as foreig strategic partners.

"We need the knowledge of developed stock exchanges and that is the reason why we are inviting these outsiders," he said.

His remarks come in the wake of reports last week that stockbrokers had taken the unprecedented step of seeking legal opinion with a view to stop the Government from privatising the ZSE. The move had effectively suspended the demutualisation of the bourse and its subsequent listing on the same privatised ZSE.

Securities Commission of Zimbabwe chief executive Mr Tafadzwa Chinamo recently said demutualisation of the bourse would not go ahead until the latest legal hitch has been resolved.

"Until we sort out this challenge, the process (to privatise the ZSE) will not progress," said Mr Chinamo. He said that SECZ, a statutory body, was acting on instructions from the Government to demutualise the ZSE. The stockbrokers have once again crossed swords with their regulator, claiming that SECZ had no right to demutualise the ZSE, which they have run as a mutual society since its inception.

Stockbrokers have in the past fiercely resisted SECZ plans to introduce a number of changes, the most controversial being the investor protection levy.

While the stockbrokers want to prevent Government from privatising the ZSE, the practice is now widespread across the world, the Johannesburg Stock Exchange across the border being one such example.

Considerable progress had already been made towards the ZSE's demutualisation, amid revelations that Imara Edwards and Corporate Excellence had been selected as financial advisors.

The two companies had presented and won a joint bid to act as the financial advisors to the privatisation of the ZSE, which was expected to take about six months.

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