adminunder strict monitoring.
The Securities Commission of Zimbabwe last week lifted the suspension of Renaissance Securities under a corrective order after it was suspended in June due to severe undercapitalisation. ReNaissance Securities is a member of the Zimbabwe Stock Exchange.
The Commission’s acting chief executive, Mrs Cordelia Mutangadura, said the lifting of the suspension followed sustained engagements between the SEC, ZSE and ReNaissance Securities for a month.
“Having been furnished with a feasible recapitalisation plan and an evaluation certificate on the ongoing concern status by the firm’s auditors, SEC reached the conclusion that the firm be allowed to resume trading under strict monitoring, in terms of the corrective orders,” she said.
The Commission had unearthed serious undercapitalisation problems at the securities firm that made it unfit to continue with operations. Initially, the suspension period was six months and action was necessitated by the fact that the Commission established that the firm required recapitalisation.
The Commission had called upon ReNaissance to provide a concrete recapitalisation plan, which it failed to provide at that time.
ReNaissance Securities provides securities brokerage and trading services, operating as a subsidiary of RFHL. The firm was formerly known as Barnfords Securities.
RFHL banking arm ReNaissance Merchant Bank remains under curatorship but has since reopened for business.
RMB was placed under curatorship by the Reserve Bank of Zimbabwe on June 2, 2011 after it was found to be technically insolvent and short of US$10 million, the prescribed minimum capital for merchant banks.
The central bank had moved into Renaissance in April to investigate the affairs of the bank to ascertain its financial status, including profitability, liquidity and solvency.
The apex bank also wanted to investigate the extent of inter-party related lending, intra-group indebtedness and abuse of office by directors and also to validate the gross abuse of depositor’s funds. During the six months of curatorship, RMB which is expected to be fully recapitalised from a gap of about US$16,7 million.
RMB is the first bank to be placed under curatorship since the 2003/4 banking crisis in Zimbabwe, which saw a total of five banks falling by the wayside.
Online Reporter