Happiness Zengeni Business Editor—
Meikles Limited has made an urgent chamber application at the High Court to challenge the Zimbabwe Stock Exchange’s decision to suspend it from trading on the bourse. The conglomerate was suspended from trading on Monday with the ZSE saying the move had been necessitated by information received from the Reserve Bank of Zimbabwe which showed differences in the amount owed to Meikles by the central bank. The RBZ debt schedule gazetted in August shows that Meikles was owed $40,64 million as at September 30 2013.
This was after accounting for 4,68 percent interest on the original amount owed of $24,88 million. In 2011 after the October 2010 demerger with Kingdom Financial Holdings the group recorded balances held by the RBZ as $36,82 million from the unaudited restated 2009 January 1 amount of $35 million. In 2012 the amount was at $38,62 million and then rose to $40,51 million in 2013. However, at F14, the group recorded the balance as $90,8 million, a 124,14 percent increase from the prior year’s amount.
Meikles said the increase in the amount was as a result of interest negotiations, which are based on lending rates. However, although validation is still taking place the RBZ says Meikles is owed about $76 million, an amount which could go down to $53 million if you add the discount factor.
In a statement, ZSE chief executive Alban Chirume said it had received written submissions from the RBZ on the assets carrying amount which it deems material and price sensitive.
However, Meikles says ZSE did not follow due procedure when it made the announcement. The group says it was not availed an opportunity to make representations in response to the allegations which motivated the suspension.
Further to that, as reported in this paper on Tuesday, the ZSE did not give a formal letter of suspension to Meikles until the late hours of Monday.
“Further to denying our client an opportunity to be heard, you also deliberately withheld the reasons for the suspension for an entire day, making it clear that any justification you wield for the suspension is contrived and fabricated,” reads part of the submissions made by its lawyer Jacob Mutevedzi or Mutamangira & Associates.
Meikles argues that the ZSE Listing Requirements provide that a listed company under threat of suspension shall be offered an opportunity to make representations to the committee in support of its continued listing.
Mr Chirume in his notice of suspension quotes Section 23 of the Securities and Exchange Act but Mr Mutevedzi argues that reliance on this section is incomprehensible.
“While that section sums up the objectives, powers and functions of the administrative justice which is constitutionally entrenched, such an interpretation is repugnant to common sense and in any event, inconsistent with the Constitution.”
Meikles also says Section 3 of the Administrative Justice Act (Chapter 10: 28) and Section 68 of the Constitution of Zimbabwe affords every person rights to administrative conduct that is lawful, prompt, efficient, reasonable, proportionate, impartial and both substantively and procedurally fair.
On Tuesday, Meikles had demanded that ZSE lift the suspension by end of business, but Mr Chirume disregarded the group.
Noise over the Meikles issue started last year after the group first booked the amount owed as non-trading income on its financial statement. However, The Herald Business understands that Mr Chirume chose to ignore the issue instead raising controversy by approving the company’s accounts on a non-working day.