THE Securities and Exchange Commission of Zimbabwe (SECZ) has been challenged to come up with strong monitoring mechanisms to protect interests of the investing public.
The call comes amid concerns that some directors of listed companies are not disclosing enough information to shareholders.
Rob Stangroom an investor relations expert said: “Directors of listed companies have two common obligations to shareholders. The first one is to provide a market of their shares which is why they list on the stock exchange. The second one, which is not well-known is to ensure that investors get a fair price for their shares when they sell those shares.
“And here, this is the core obligation that listed companies have to investors to provide information that is timely, regular and more consistent.
“This obligation also goes into good corporate governance and boardroom practises.”
Investment Professionals Association of Zimbabwe board member Ranga Makwata, added that stockbrokers and investments advisors tend to misrepresent information for profits.
“Most of us are in this for profits. So, sometimes we tend to do things that make money for us, and sometimes these things that do make money for us may not necessarily be what is expected of investors. So the regulator has to have enough tools to monitor all that.”
ZSE chief executive Justin Bgoni said he is worried that a lot of directors are failing to understand their duties and showing lack of knowledge which prejudices investors.
“Directors do not understand their duties in terms of disclosure and promoting liquidity on their stocks which is something very important. In return the shareholder is getting less on their investments.
“And also shareholders must attend annual general meetings to get inside information,” he said.
SECZ research and market development manager Grace Berejena told NewsDay that the commission was working on protecting investors’ interests.
“We are always working towards ensuring that investors equitably receive timely and adequate information for informed decision-making. SECZ was, therefore, instrumental in reintroducing a review panel that scrutinises all published financial statements and reporting standards to be adhered by all listed companies and their auditors, ” she said.