Supreme Court reserves judgment in Remo case

The Supreme Court yesterday reserved judgment in the case where Remo Investment Brokers were appealing against an earlier judgment to have their licence cancelled.

According to its argument deposed at the Supreme Court, Remo was seeking to have the cancellation of its licence by the Securities Commission, set aside saying that the High Court had erred in not finding that the cancellation of the licence was premature and in breach of Section 48 as read with Section 108 of the Securities Act.

Remo also erred in not finding in all circumstances that Remo, together with Mahomed Mahmed, John Motsi and Rezani Ebrahim were not given an opportunity to be heard as required by law and by section 111 of the Securities Act.

Remo also says it had not received a fair trial.

In June last year, SECz cancelled the licences of Interfin Securities and Remo following the suspension and investigations of the stock-broking firms. Rufaro Zengeni (from Interfin Securities) and Mahomed Mahmed (Remo) also had their licences cancelled.

The two are said to have contravened Sections 24:25 of the Securities Act  by carrying out activities not authorized in terms of the securities  dealing firm licence after securing funding and on lending to third parties. The firm admitted to engaging in these transactions especially money market deals that fall under the Banking Act.

The court concurred with all the six breaches of the law that investigators Proctor and Associates had revealed as follows:

1)      Appellants engaged in non-permissible activities
2)      Appellants engaged in illegal activities
3)      Appellants used clients' shares as security for loans
4)      Appellants failed to keep a register of all securities
5)      Appellants made a false declaration
6)      Appellants failed to conduct business with high standards of propriety and probity.

"Given the extent of the deviations from the expected standard of operating the registered securities exchange that have been outlined above the court finds that the respondent (SECz) was justified in opting for cancellation of the Appellants licences with provision for re-application after five years if the two would have been adequately rehabilitated," said President of the Administrative Court Magistrate Herbert Mandeya then.