HIGH Court justice Bharat Patel this week reserved judgment in the case in which former Securities Commission of Zimbabwe (SEC) commissioner Martha Rukuni is suing Finance minister Tendai Biti for firing her amid concerns of possible conflict of interest on her part.
Rukuni, an executive director at Finesse Advisory Services alongside John Chikura, the CEO of the Depositors Protectors Corporation, were removed from the SEC board last year after Biti invoked Section 10 (2e) of the Securities Act, which empowers him to relieve a commissioner of his or her duties if he/her or his/her spouse engages in any occupation, service or employment, or holds any asset, which in the minister’s opinion is inconsistent with his or her duties as a commissioner.
Rukuni also serves as a board member in listed retailer, OK Zimbabwe, while Chikura was director at Renaissance Financial Holdings. SEC is the regulator of the stock market, which has among other functions the responsibility of promoting corporate governance.
Corporate lawyer Harrison Nkomo and Chartered Accountant Pearson Chitando were appointed in their places. The other commissioners are Willia Bonyongwe, Arthur Chavanhu (Vice Chairperson) and ambassador Chris Mutsvangwa.
Rukuni, through advocate Thabani Mpofu in her court papers filed under HC6887/11, cites Biti and SEC as the first and second respondents respectively. She is claiming US$80 000 for loss of income after being removed from the commission, a move she says was unfair.
Rukuni argued Biti was aware of her interest in OK Zimbabwe when she was appointed a commissioner in 2008. Based on that, Rukuni argues she should have been allowed to continue as a board member in terms of Section 9 of the Securities Act Chapter 24:25. The termination came after she had served several years as commissioner.
The issues arose when there were disagreements among the commissioners on whether commissioners could sit on the SEC board and at the same time be directors of listed companies.
The commissioners resolved to put the matter to vote. Three voted that it was improper while two were against.
The submissions were forwarded to Biti, who then cited the events involving Renaissance Holdings and Afre as a demonstration of conflict of interest that arises when commissioners sit on boards of listed companies.
SEC also looked at how commissions from other regional countries are constituted and found that only South Africa permits the practice while in the United States commissioners are full-time.
Biti, in his notice of opposition through advocate Ray Goba, notes that Rukuni was given ample time of slightly more than a year to relinquish the OK seat. Biti in May last year said he was exercising his powers in terms Section 10 (2e) of the Securities Act Chapter 24: 25 to force Rukuni and Chikura to be removed from their positions.
The two were given until June 15, 2011 to make their decision on whether to remain as commissioners or relinquish their other positions.
Biti also felt it was improper for any serving commissioner to sit on the board of a listed company as it presented possible conflicts of interest.
Rukuni indicated she was agreeable to relinquishing her position as a board member of OK Zimbabwe on condition that she would be compensated by the Securities Commission for the fees she would lose if she stepped down. She asked that SEC to pay her US$35 000 as restraint fees.