Cafca under spotlight

27 Nov, 2012 - 22:11 0 Views
Cafca under spotlight

The Herald

 

has been tasked to look into the issue to determine whether the results meet expected standards.
“That (compliance) is not happening. Just look at the Cafca results today. A panel will be looking into that and it is most likely they will be instructed to publish a more detailed statement,” said Mr Chinamo.

“The information given by (public listed) companies is supposed to help investors make informed decisions. Those (Cafca results) are audited, but imagine there is no audit opinion,” he said.
An auditor’s opinion is a certification that accompanies financial statements and is provided by independent accountants who certify that financial statements are correct and conform to international standards.

The latest development comes a few weeks after the Zimbabwe Stock Exchange in partnership with Public Accountants and Auditors Board revived a monitoring panel meant to ensure that companies fully comply with International Financial Reporting Standards.

Previously known as the ZSE Monitoring Panel, the Financial Reporting Monitoring Panel will provide advice to the stock exchange’s board on alleged cases of non compliance with financial reporting standards in annual and interim reports and any other company publications.

The new process involves the panel randomly identifying the companies to be reviewed. A punishment would be imposed on those who would have failed to comply.
The Secz CEO said the financial statement that Cafca published yesterday defeated the essence of what the commission wants to achieve.
Mr Chinamo said the objective was not to penalise Cafca or any other offender, but to ensure that public listed firms make adequate disclosures. But he warned that the ZSE listed cable manufacturing company risked punitive action if it does not cooperate.

Secz regulates all capital markets in the country and has since inception in 2008 been battling to enhance transparency on the ZSE.
Mr Chinamo recently told delegates attending the Confederation of Zimbabwe Industries business ethics symposium that most quoted companies trading on the local bourse were withholding critical information relating to the future of the firms thereby prejudicing investors.

“Companies only say they have capital constraints yet they are on the brink of collapse. It may be the case that they may be facing going concern problems for three years, but they don’t make such disclosures,” he said.

Mr Chinamo said there was need to balance ethics, self-policing and regulation to ensure the success of the country’s capital markets. He also warned that the commission will probe all trades carried out on the Zimbabwe Stock Exchange at suspiciously huge premiums or discounts to curtail unfair and unethical business practices.

Secz will also investigate insider trading and take appropriate punitive action, including prosecution, where evidence of such practice is found.
The Secz boss said they would rather have a small stock exchange than have a huge stock market used to clean dirty money, hence the push to ensure more transparent activities on the local bourse. The ZSE, with 76 active counters, breached the US$4 billion mark last month.

In the period to September 2012 Cafca reported a US$1, 6 million profit after tax, while operating profit was 29 percent up at US$2, 3 million.
While the firm reported that earnings per share rose by 29 percent to US5,3c, Cafca would not explain what drove growth in the earnings.

Share This:

Sponsored Links