Asset management companies in Zimbabwe are passive and often times neglect their role of raising alarm where listed companies make decisions which are not in the interest of investors, the Securities and Exchanges Commission of Zimbabwe said.SECZ chairperson Mrs Willia Bonyongwe made the remarks recently in her inaugural meeting with asset managers, pointing out that they attend shareholders’ meetings, but remain quiet on critical issues affecting listed firms.
“Asset managers in Zimbabwe are reluctant to participate actively. They attend AGMs as proxies, but remain quiet on critical issues affecting listed companies.
“Asset managers play a critical role in advising their clients on annual or extraordinary general meetings,” Mrs Bonyongwe said.
She added that asset managers should always be vigilant and raise alarm whenever decisions are not made in the best interest of investors and should force listed companies to disclose vital information that is useful to stake- holders.
Mrs Bonyongwe said there is need for full disclosure of appropriate information and called for shareholder activism, which refers to ways in which shareholders can assert their power as owners of the company to influence behaviour.
Securities (Investment management) companies mobilise funds for investment. They offer services to households, businesses, governments, pension funds and Insurance companies.
Mrs Bonyongwe said there is need for asset management companies to ensure that investment assets are supervised and held independently through depositories and custodians.
There were 15 operating asset management firms as at September 30, 2013 and one under liquidation. Combined value of assets under management was US$2,69 billion as at that date.
Mrs Bonyongwe said asset managers should observe strict corporate governance practises to foster public confidence statutory instrument 100 of 2010 provides minimum corporate governance guidelines to SECZ licensees.
The law requires asset managers to publish audited financial statements, but some institutions disregard the law.
SECZ said it will stick to the law and take corrective action.