Listed firms largely compliant, says ZSE

The Zimbabwe Stock Exchange (ZSE) says despite a tough economic environment, listed companies have largely been compliant in releasing audited financial statements and convening shareholder meetings.

Staff Writer.

ZSE acting CE Martin Matanda told businessdigest that the non-compliance rate was 2%, a figure he described as very satisfactory.

“The average non-compliance rate over the last two years is below 2% and from this we can safely conclude that the issuer’s compliance rate is satisfactory. The publication of financial results within the period stipulated in the listing rules and failure to hold annual general meetings are noted to be the most common cases of non-compliance with issuer’s continuing obligations.

“The prevailing economic environment is perceived to be unfavourable for most firms and is blamed for the delays in finalising audited financial statements and sometimes this, in turn, leads to the delay in publication of audited financial statements,” Matanda said.

This year, the ZSE suspended trade in CFI Holdings owing to corporate governance concerns for the second time in a row. However, Matanda said the company is working on the matters raised and therefore looked forward to the lifting of the suspension and trading in CFI Holdings shares in the near future.

“It is true that this is the second suspension of the trading in CFI shares in the past two years. It should however be noted that the reasons for the suspensions are different although in both cases it is a matter of compliance with the listing requirements,” he said. “ZSE does not believe there is reluctance on the part of CFI Holdings Ltd to comply with the listing requirements, but rather that the company is working on the matters raised. We therefore look forward to the lifting of the suspension and trading in CFI Holdings shares resuming in the near future.”

Matanda said it was not a matter of the number of times on which the issuer is suspended, but rather a compliance issue with the listing requirements from time to time.

He also pointed out that normally if a breach is identified, the issuer is afforded a grace period of 90 days within which the position must be corrected.

During this period, Matanda said the issuer will be suspended and expected to continue to comply with listing requirements as guided by the same rules. Failure to comply within the aforesaid period may then lead to delisting depending on the progress made and the committee’s assessment of the compliance commitment.

While the non-compliance rate was now under 2%, the ratio of compliance with payment of annual fees had risen to around 97% to date.

In 2014, ZSE suspended Art Holdings, Celsys, Border Timbers and RioZim faced suspension over non-payment of annual fees amounting to US$23 000.

“On the matter of annual fees, there has been great improvement over the years with payments of around 97% being made within the required time and the remainder having made payment plans with the ZSE,” Matanda said.