ZSE plots to crack whip on defiant Econet

The Zimbabwe Stock Exchange (ZSE) will meet today to deliberate on what action to take after Econet Wireless Zimbabwe defied the regulator by going ahead with its extraordinary general meeting (EGM).

The EGM went ahead on Friday, with shareholders approving a $130 million cash call to pay foreign obligations.

Econet insisted the meeting should go ahead, arguing that the ZSE board had no authority to stop the EGM.

A day earlier, ZSE board chairperson, Caroline Sandura had advised Econet to postpone the meeting to a later date "until certain technical issues relating to the rights issue transaction have been clarified to the satisfaction of the ZSE board".

Board members, who spoke to NewsDay on Friday, said Econet's defiance had jolted the board into action to prevent the occurrence of such practices in future.

"They [Econet] have defied, but ZSE has something in its armoury to deal with the matter in terms of the listing rules," a board member said.

"The CEO of ZSE will present a report to the board on what happened at the EGM, since he was mandated to attend."
The ZSE board meeting comes after Econet shareholders voted for the cash call.

"All the six resolutions at @econetzimbabwe EGM for rights offer carried the day, with overwhelming majority after polling," Econet spokesperson, Lovemore Nyatsine wrote on microblogging site, Twitter.

Sources said on Friday the ZSE board was miffed by the open defiance and wants to crack the whip.

"We will take the necessary steps required. We don't want some people to give themselves certain powers," a board member said.

"Our concern was for Econet to follow the correct processes and not prejudice any section of the market."

In terms of the rights offer, shareholders shall be offered, pro rata to their shareholdings, 1 082 088 944 ordinary shares plus

263 050 614 Class A shares at a subscription price of five cents each on the basis of about 82 ordinary shares for every 100 shares already held.

Each rights offer share shall be linked to a debenture with an issue price of 4.665 cents each and, a coupon rate of 5% per annum, thus, giving a redemption value of 6,252 cents each.

The amount due on both the shares and the linked debentures shall be payable in full on acceptance of the offer.