The Securities and Exchange Commission of Zimbabwe recently won a Supreme Court case against Phibion Gwatidzo in his capacity as the liquidator of Renaissance Securities where he sought to liquidate unclaimed shares in nominee accounts in favour of the stockbroking company.
The High Court had on November 11, 2013 handed down judgment in Gwatidzo‘s favour, however, the Supreme Court declared the liquidator should not sell and transfer unclaimed shares in the Renaissance Securities nominee account, for the benefit of the company in liquidation.
Mr Gwatidzo argued that since the shares remained unclaimed after he advised shareholders/investors through a public notice to come forward and do so, there was no further proof of ownership required on his part. As such between June 27, 2013 and July 9, 2013, Mast Stockbrokers, which was the third respondent in the case sold shares valued at $308 683,57, the amount of which was deposited in a trust account established for that purpose.
During the period between June 28 and July 2, Mast also sold shares to the value of $434 167,14. On July 25, 2013, Mast advised Mr Gwatidzo that SECZ had issued a directive to the effect that the stockbroker should stop selling any or all of the company’s shares and if it had already sold, to reverse the sale and cancel registrations. Aggrieved by this directive, Mr Gwatidzo approached the High Court for SECZ not to interfere in the liquidation process and judgment was given in his favour.
However, SECZ appealed to the Supreme Court arguing that the directive to stop the sale of shares was done within the context of section 4 of the Securities and Exchange Act (Chapter 24: 25) which mandates the appellant to inter-alia provide high levels of investor protection. The Supreme Court concurred that SECZ was within the mandate of its Act when it issued the directive and that a nominee shareholder is not the true owner of the shares.
“The appellant need not first obtain leave before executing its duties in terms of the empowering Act.”
SECZ was allowed costs.