Imara share manipulation probe gathers momentum

Published: 10 June 2013

Investigations into possible share price manipulation by Imara Edwards (Imara) have reached an advanced stage, with results expected to be announced soon, an inside source has revealed.

The investigations began early this month to look into allegations of insider trading after a share price rally between October and mid-November last year on the Zimbabwe Stock Exchange (ZSE).

It is alleged that in the period in question, the share rate expansion for the company was not driven by essential market performance but by insider trading.

Insider trading is described by experts as the trading of a company's stock by individuals who may have privileged information that is not readily public.

The bloated share price, it is said, resulted in large transactions and share price movements during a short space of time involving the company, a development that naturally attracted the attention of the regulator.

A source privy to the investigations told this paper that both the Securities Commission of Zimbabwe (SECZ) and the Zimbabwe Stock Exchange (ZSE) that are jointly conducting the probe had concluded investigations and an announcement will be made soon. Part of the information, the source indicated, was in the process of being corroborated.

"The investigations have been going on well and reasonable ground has been covered so far. From what I have observed, the responsible authorities will be making a public announcement soon. They (SECZ and ZSE) have managed to gather some intelligence that they are going to use to pass judgment after the analysis that they are currently doing," said the source.

However, SECZ chairman Mr Tafadzwa Chinamo said in an interview last week that it was premature to make any announcement as this would jeopardise the probe.

He noted that information will be released after the finalisation of the entire process.

"The investigations are still going on and it will be premature for me to divulge any details pertaining to this process. Also, we do not have a specific date that we are going to announce the findings. This (date) will only be determined by how fast we conclude the investigations," he said.

Imara Edwards Securities (Private) Limited was founded in 1954 and engages in equity trading business. The company operates as a stockbroker and securities house in Zimbabwe. It also provides money and capital market trading.

Meanwhile, market watchers say a vigilant regulator is crucial in boosting confidence for both small and large investors on the country's bourse. For a long time the ZSE, which was generally operating with strict oversight from the authorities, has been accused of operating as an elitist "boys' club" without any authority to answer to.

Economist and former chief executive officer of the Zimbabwe National Chamber of Commerce Mr Innocent Makwiramiti said constant investigations by the regulator of suspicious trading trends on the bourse will help improve accountability and responsibility by players operating on the stock exchange.

"The probe helps improve the rationality of operations within the ZSE. A lot has been happening and continue to happen on the local bourse just like in the case with the Johannesburg Stock Exchange and other stock exchange platforms, but it is such kind of action (investigations) that promotes accountability and responsibility, which are crucial elements on the operations of the bourse.

"We expect SECZ to be vigilant so as to expose inequitable and unscrupulous business practices and take corrective measures," explained Mr Makwiramiti.
- SM