HomeBusiness DigestRBZ to stop 'corporate incest'

RBZ to stop ‘corporate incest’

Ngoni Chanakira

COMPANIES listed on the Zimbabwe Stock Exchange (ZSE), especially financial institutions, will soon have their accounts audited by the Reserve Bank of Zimbabwe (RBZ) before publishing as the

central bank intensifies its crackdown on financial malpractices.

The merry-go-round days of company directors sitting on several boards are also soon to end in a move meant to reduce “alleged insider trading”.

RBZ governor Gideon Gono told bankers and chartered accountants when he met them that gone were the days when auditors simply approved accounts with “clauses inserted in them merely shifting blame”.

He said auditors should now take full account of their work and not approve financial statements that were sometimes distorted.

“Some auditors have been hiding behind disclaimer clauses,” Gono told the bankers.

“This should come to a stop and they should take full responsibility of their work.”

He said the RBZ would now work very closely with the stock exchange to try and stop the practice whereby auditors simply “rubber-stamped suspicious accounts”.

The governor said the policy of directors sitting on “this and that board for prestige” would also come to an end.

Several prominent individuals currently sit on more than three ZSE-listed firm boards as well as parastatals and analysts say this encourages “sensitive” information being discussed at board meetings, which could be regarded as “insider dealing”.

Influential individuals, sometimes for political expediency or for their business and contacts, are regulars on several boards.

“This is what we call corporate incest,” Gono told accountants.

“We should not have directors sitting on too many boards. This also needs probing.”

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