PROMINENT broking firm, Continental Securities Trading (Pvt) Ltd, has plunged into further problems amid reports this week that the company has been hit by a massive staff exodus and could al
so be facing serious liquidity problems.
CST board chairman and the deputy managing director of NMB Holdings Ltd, which has a majority holding in Continental, James Mushore, however immediately shot down the reports.
“It is unfortunate that such allegations are allowed to see the light of day,” Mushore said on Wednesday. “The analogy that can be used is one of someone throwing mud at someone wearing a white shirt. While one can remove the mud, the stain will still remain.
Speculation is also rife that the securities firm is on the verge of closing shop.
Mushore dismissed among other things information from former employees that there has been a massive staff turnover at the firm since the problems began.
Their broker has also left CST and the firm is currently hunting for a replacement.
According to Mushore, their broker’s resignation would not affect their operations as they had made “firm arrangements” in the market.
“Yes, we have lost about two to the United Kingdom. The other three we have indeed lost to competition. It’s nothing new,” Mushore told businessdigest.
“Staff turnover is not news because it is always happening in this country. Those who left the organisation are not even senior staffers.”
Some former employees also confirmed staff turnover was high at CST.
They said they left the company because of frustration.
According to sources the company is currently facing liquidity problems that could force it into insolvency. The sources said the firm is in a financial fix.
NMB Bank however told businessdigest this week that it was “business as usual” for the broking company after dealing with the resignation of their broker.
“We are dealing with an issue of reputation and we have had to address that. We are in the process of doing that,” said Mushore.
“And recently many of our old clients have started trading with us. We have cleared everything with the relevant authorities and business goes on. There are no liquidity problems at Continental.”
Analysts and brokers in the market have been speculating that CST could close shop.
“They probably want to close. What they are doing is unclear at the moment,” said an analyst with a local broking firm. “Indications are however that they might soon be closing. I am not sure but that talk has been going around in the market.”
Their asset management division (Continental Asset Management) is also alleged to have fallen victim to fraud, an issue NMB Holdings also dismissed as false.
A former employee however confirmed that a division had been swindled out of a substantial amount nearing the billion-dollar figure during the past year.
It is also reliably understood that the major shareholders have made no investigation.
Said Mushore: “We want to know if these employees can assist us with more information.”
Continental has been suspended twice from the market in a space of one year.
On all occasions the firm denied any wrong-doing.
On the issue NMB of Bank’s foreign currency licence, which was withdrawn, the bank said consultations were still ongoing with the relevant authorities to find a lasting solution to the problem.
The bank said it was confident that it would get the licence “if justice is done”.
“The parallel market value is being factored into every commodity except the currency itself. It would not be fair to punish one organisation when everyone is doing it,” Mushore said.