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Meikles Limited, which is dually listed on the ZSE and London Stock Exchange, claims to have suffered considerable damage from the manner the ZSE handled the suspension of trade in its shares on the bourse

Business Reporter
MEIKLES Limited has hinted it will proceed with its decision to sue the Zimbabwe Stock Exchange after it claimed efforts to reconcile following differences over alleged “discrepancies” in its debt with the Reserve Bank of Zimbabwe failed.In a highly charged statement to stakeholders on Friday, chairman Mr John Moxon said that it was now appropriate to take legal recourse after it became apparent that recent efforts for an amicable solution were futile.

“The company representatives who met with ZSE regrettably found that there may initially have been some common ground, but subsequent inconsistencies from within ZSE have placed doubt on this process.

“It is now appropriate that the company proceeds with litigation,” Mr Moxon said.

Meikles had earlier contemplated, but eventually suspended a $50 million lawsuit against the ZSE for delictual damage and patrimonial loss claiming the ZSE had defied all precepts of administrative conduct in suspending its shares.

Differences between Meikles and ZSE started after the latter questioned the accuracy of the value of Meikles’ debt with the central bank as stated in its financial accounts, a claim that contradicted the position given by the RBZ.

The ZSE had issues on discrepancies between the $76,1 million allegedly confirmed by RBZ as owing from a deposit Meikles made when it listed in 1998 and the $90,8 million Meikles listed in its latest financials.

Meikles said the debt was accumulated on the deposit, which attracts 8 percent compound interest annually, to be accrued until repayment is effected.

“It is known that this is, in itself, a compromise by the company as other creditors have been given up to 12 percent,” Mr Moxon said.

Things reached tipping point when the ZSE unilaterally, citing urgency of matter, suspended trading in Meikles shares without prior notification or giving the company an opportunity to respond, an anomaly the ZSE latter admitted to.

The controversy that has stalked the embarrassing manner in which ZSE handled the suspension of trade in Meikles’ shares on the exchange raised questions about its managers’ capacity to run the stock market.

Meikles Limited, which is dually listed on the ZSE and London Stock Exchange, claims to have suffered considerable damage from the manner the ZSE handled the suspension of trade in its shares on the bourse.

“The company is the plaintiff and is demanding substantial damages from the ZSE and certain of its officers in their personal capacities,” said Mr Moxon, who earlier indicated Meikles may as a result delist from the ZSE.

The listed conglomerate would, however, not explain exactly what sort of understanding it was looking for in the discussions it has held with the ZSE or in what way failure to reach common ground had led to the decision to sue.

The RBZ has committed to issuing treasury bills in settlement of the amount owing to Meikles, but negotiations are ongoing on the balance after TBs issued earlier, while it is still not clear what the final amount to be paid will be.

Meikles said the value of the funds, which have largely, but not entirely, been committed in the form of TBs is still unknown. The greater numbers of the TB’s about to be issued with satisfactory terms are still to be received.

Meikles also said a substantial part of funds due and anticipated by the company have been committed to the group by the management of the RBZ.