Zimbabwe Stock Exchange (ZSE) new chief executive officer, Alban Chirume has clashed with Trust Holdings Limited (THL) following the latter’s failure to publish financial results for the year ended December 31, 2012 barely a week into his job.
Report by Fidelity Mhlanga
Impeccable sources say the exchange hounded THL to re-issue a cautionary statement last week, a move which the banking group has, however, resisted.
Late last month, the THL board applied to ZSE for a temporary suspension of the company’s shares from trading on the bourse, fearing shareholders would be prejudiced by engaging in share transactions under the current circumstances prevailing at the company. The ZSE granted the approval, culminating in the subsequent suspension of trade in the company’s shares a fortnight ago.
However, according to sources, the ZSE took great exception over THLs cautionary statement last Monday, demanding a pull back by the bank.
While executives at Trust Towers remained tight-lipped on the tiff with the ZSE, sources told businessdigest that the bank was in a catch-22 situation regarding its financial accounts for the year ended December 31 2012.
“The bank’s auditors could not certify the going concern status of the bank due to the impact of the current undercapitalisation status of the bank. Hence the bank was unable to release its trading results to the public,” a source said.
Trust Bank Corporation is a major subsidiary of Trust Holdings Ltd, whose other operations comprise, Trust Insurance Brokers, Trust Properties and Trust Agriculture.
Analysts following the developments between THL and the ZSE said it was not surprising the ZSE had assumed a heavy-handed approach on matters as this was the trademark of its recently appointed CEO.
In his brief address to journalists following his appointment to the helm of the ZSE, Chirume, who is the former Securities and Exchange Commission CEO, said he was a change agent who was not afraid of making difficult decisions.
The ZSE this week issued a statement contending that THL notices were to be reviewed by the bourse before publication in terms of the exchange’s corporate actions submission guidelines.
“The ZSE acceded to the request to suspend trading in the company’s shares with effect from Friday May 31 2013 in order to protect shareholder value.
“To maintain market integrity, the ZSE listing rules demand that all notices by the company be reviewed by the ZSE before publication in terms of the ZSE corporate actions submission guidelines
“Adequate disclosure is provided to the investing public in terms of Section 3.3 of the listing rules, ” reads part of the notice.
In an interview this week, Martin Matanda, operations executive at ZSE, said there was nothing unusual about the published notice, adding THL had not given a firm date on when they hoped to conclude a key capital-raising transaction.
“If the company has issues as it is right now, there is a commitment that the matter can be solved if ever there is a problem. In this case, there is no clear date when the matter can be solved ,” Matanda said.
“This is a notice that is put out routinely by the exchange. It is not peculiar to Trust Holdings. You can check other notices on our website.”