First Mutual challenges Zim Stock Exchange (11-07-07)

FIRST Mutual Limited has made an urgent court application seeking a reversal of the Zimbabwe Stock Exchange’s decision to suspend it from trading on the bourse.
FML made a High Court application (case number 3505\07) on Thursday last week accusing the stock exchange of acting unfairly.

R>According to High Court sources, FML argued that the ZSE committee should have afforded the life assurance firm an opportunity to explain why the resolutions were tabled during the AGM before taking such drastic action.
Lawyers representing both parties could not be reached for comment.
ZSE is represented by Honey and Blanckenberg while FML has engaged Atherstone and Cook to argue its case.
ZSE chief executive Emmanuel Munyukwi confirmed the latest developments but referred all questions to their lawyers.
“It is a matter before the courts, so I cannot comment. Try our lawyers,” said Munyukwi.
FML was suspended from trading on the local bourse for pressing ahead with resolutions to which the ZSE committee had objected.
The committee had warned FML that it risked suspension if it went ahead with the resolutions.
These included First Mutual’s proposed acquisition of ReNaissance Merchant Bank and ReNaissance Securities Ltd in a share swap deal that would culminate in its complete takeover by ReNaissance Financial Holdings and a change of name.
Through the deal, Renaissance had targeted to raise its 28% stake in FML to over 46%, effectivelyconsolidating Renaissance CEO Mr Patterson Timba’s stranglehold on FML. In terms of standing ZSE regulations, transactions that seek to raise a single shareholder’s equity beyond 35% must include an offer to buy out minorities. This, apparently, was not done in the case of the FML-ReNaissance deal.

HWANGE Colliery Company (HCC), is producing way below capacity and is failing to meet its supply commitments to some of the country’s major utilities and manufacturers.A Hwange Colliery Company distribution sector chart shows that the company is only meeting 52 percent of demand leaving most companies to import coal.
Despite Zimbabwe sitting on some of the biggest natural coal reserves in the mineral rich Southern African region, local companies have been forced to import coal from neighbouring country Botswana.
Against a national demand for coal of around 380,000 tonnes per month, Hwange is managing 197,300 tonnes which it is supplying to Zimbabwean companies. This leaves a 182,700 tonnes shortfall every month.
According to the chart, Hwange is supplying the state’s Zimbabwe Power Company (ZPC) with 153,000 tonnes of coal against the company’s monthly needs of 180,000 tonnes.
Hwange is currently supplying 9,000 tonnes of coal to the Zimbabwe Iron and Steel Company (ZISCOSTEEL) against a monthly demand of 15 000 tonnes.
“Hwange has failed to supply industry with coal and most companies have since 2005 been importing their own fuel from Botswana,” said Callisto Jokonya, president of the Zimbabwe Confederation of Industries (CZI).
A company spokesperson for the coal mining concern admitted that the company was facing difficulties in meeting its targets but declined to discuss the matter further.
“The new machinery that government sourced is frequently breaking down and most of the mining equipment was frozen underground and will need to be rehabilitated.”
“The situation is critical and we have since resorted to importing coal from Botswana. But with the price controls issue, most companies will simply stop doing so,” said the official.

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