Home » Court » Brokers See Red Over U.S $1 Million Project

The Zimbabwe Stock Exchange will move away from the Central Business District this half of the year following the purchase of a residential building by the secretariat, in a transaction which major shareholders – the stockbrokers – are not happy with.

ZSE bought the house for about $500 000 and engaged Rio Douro Construction to renovate the small old home into a classy state-of-the-art office complex. The total stand size is estimated at plus 2 000 square metres although the office complex is estimated to occupy about a quarter of the total land.

Renovations have been estimated at

plus $500 000 with a new IT room costing upwards of $28 000 in preparation of trading automation. Well placed sources say the renovations were done without approval from the stockbrokers.

“Considering the size of the transaction, shareholders should have been certainly notified through their board representative and studied the merits of the transaction.

“Before the appointment of the interim board, the matter would have been brought before the ZSE committee made up of stockbrokers for approval.

“However, the committee was dissolved by the regulator and this created serious loopholes as far as corporate governance and oversight of the exchange is concerned,” said one stockbroker.

Another stockbroker said considering that the funds used in essence belong to brokers they should have sought their input before purchasing the property.

“That money could have been put to better use especially in light of the demutualisation process. As it is now, we are not sure how the deal was structured.”

The renovations will create a dealing room, reception area, IT room and two offices on the ground floor. On the first floor is an accountant and chief executive officer’s office which leads to a balcony. On the front is an arch which will be glass fitted.

Electrical contractors Anstock Services have been engaged for the electrical fittings at the new complex.

While the desire to reduce operating expenses is noble, market observers argue that the cost of the property, both purchase price and renovations, is out of sync with the plan to cut costs.

Observers argue that situating the stock exchange in a residential area several kilometres away from the economic hub is not in line with the operations and terms of the bourse.

The world over, exchanges are situated at the centre of economic activity and while Ballantyne Park is low density, it is not a hub of activity. Johannesburg Stock Exchange was one of the last companies to move to Sandton and, even so, they are situated in the centre of the business district.

Observers say that the move could prove counterproductive as it alienates the ZSE from the economic stakeholders setting it as a “sport for the elite few”.

As part of investigations into the operations of the ZSE, The Herald Business visited the new premises where construction workers were busy trying to keep within the targets set by the bourse.

ZSE chief executive Mr Alban Chirume has also been accused of overriding the board and operating mostly as a one-man band often using the argument that the board’s term expired since it was appointed on an interim basis. The board is chaired by Standards Association of Zimbabwe CE Mrs Eve Gadzikwa.

He is accused of overshooting his budget over the purchase of a top-of-the-range Mer- cedes-Benz.

Comment was sought from Mrs Gadzikwa since Tuesday but she maintained that she was not yet ready to give this paper a comprehensive response on these issues. Neither was she prepared to shed light on what action she would take especially in light of the fact that her chief executive erred in the discharge of his duties over the Meikles debacle.

“I need more time to work on the responses as there are too many questions,” she said.

Source : The Herald