Remo ruling presents dilemma

Published: 14 February 2014

A High Court ruling that Interfin Securities (Private) Limited (Interfin) must return Remo Investment Brokers (Private) Limited (Remo)'s shares worth $3,3 million has presented market regulators and Zimbabwean industry players with a conundrum since the stockbroking firm is now defunct.

This comes as the parties had been locked in a two-year long battle, and in which the former was accused of disposing of Mahomed Mahmed's shares - lodged as security for a $600 000 loan - when the latter had fully repaid his dues.

"Respondent (Interfin)'s argument that it sold the property because applicant had defaulted defies logic in that it has not been explained why respondent accepted re-payment of a loan when it had liquidated the shares," Justice Maxwell Takuva said in a Wednesday ruling, adding that Interfin had "no bona fide defence for its actions".

"The respondent be compelled to return... (share certificates) within three days of this order, failing which the Deputy Sheriff is authorised to seize the share certificates and shares... from respondent or whomever may be in possession of the said share certificates and shares," he added.

The parcel of shares comprised CBZ Holdings Limited, Dairibord Zimbabwe, Old Mutual and TA Holdings Limited shares.

And as the markets were trying to digest the impact of the ruling yesterday, which also empowered the deputy sheriff to seize any scrip traceable to the pre-2012 transactions and debacle, market players are reportedly uneasy about how Remo would be compensated, while questions linger about why regulators, including the Securities Exchange Commission, had no extensive involvement in the matter from the outset.

For instance, key questions related to why the shares were not "locked away" until the matter was resolved in the courts, analysts say.

In the meantime, Remo won on the basis of lawyer Jonathan Samukange's key arguments that Interfin had no legal grounds - whatsoever - to hold onto the scrip.

"Shares are like cows, not ordinary rural cows but branded cows, one can follow... and recover them. We pray... to have our shares back and we know how to get them," he said.

Earlier, the benighted Interfin had said it was no longer in possession of the shares, as they had been lodged with the sherriff following an earlier court order.
- dailynews