Remo, Interfin share dispute: Kingdom gets court reprieve

KINGDOM Asset Management (KAM) has obtained an interdict against Remo Investment Brokers, Interfin Securities, Corpserve and the deputy sheriff over the removal of share certificates that were involved in the dispute involving Remo and Interfin.
The provisional order issued by High Court Judge Justice Hungwe on July 3 interdicts the deputy sheriff from removing any share certificates, transfer documents and any other related documents which were ceded by Interfin to KAM and subsequently transferred to third parties. The shares in question are 400 000 Old Mutual shares, five million Dairibord shares and five million CBZ shares. The court ordered Remo to pay the costs of the suit.
On March 2012, Remo lodged a complaint with the Zimbabwe Stock Exchange after Interfin Securities failed to return some shares that had been pledged as security for loans availed to Remo Investment Brokers on behalf of their clients over a period of 18 months.
In 2010 and 2011, Interfin advanced a total sum of US$6,3 million to Remo Investment Brokers MD, Mohamed Mahmed.
The loans were supposed to be repaid on or before October 30 2011. Remo Investment Brokers secured the loan with Interfin Securities by pledging a parcel of shares registered in the name of Remo Nominees in negotiable order.
The parcel was split as five million CBZ shares, five million Dairibord shares, 700 000 Old Mutual shares and 1 012 161 TA Holdings shares.
However, Interfin did not return the security after the loan repayment because the same shares were also used as collateral for loans obtained by Interfin from elsewhere in the market. Interfin was unable to fulfill its obligations in terms of its own borrowings and as a result the shares were sold by the holders.
According to investigations by the Securities Commission of Zimbabwe, 400 000 Old Mutual shares claimed by Remo were sold by Kingdom Stockbrokers on behalf of Kingdom Asset Managers and the shares are now registered by Stanbic Nominees on behalf of their client.
A total 300 000 Old Mutual shares were sold by EFE Securities on behalf of their client, Banhams Investments, and the shares were withheld by Remo Investment. A total 1 366 000 CBZ shares were sold by Platinum Securities on behalf of their clients.
It was also noted that some of the shares had been sold to reputable foreign institutional investors.
Remo Investment Brokers proceeded to block the transfer of some of the shares after obtaining an order from the High Court.
Interfin and Remo subsequently had their licences cancelled for engaging in activities that were found illegal under the terms of their licences. However, Remo appealed against the ruling.
The deputy sheriff was also ordered to return to KAM all share certificates obtained from them, Kingdom Stockbrokers, Imara Edwards Securities, or any other third party.
The shares had been obtained in pursuance of a provisional order which had been granted under case number HC3694/12, which had been ceded by Interfin, but were subsequently transferred to third parties.
Market players say that the battle of the shares emanating from the Interfin and Remo dispute was likely to continue, as Remo had already recovered the majority of the share certificates.
Efforts to get comment from Remo’s MD, Mahmed, proved futile as he was said to be in the United Kingdom.

— Staff Writer.