SECZ orders Ariston to convene fresh EGM

SECZ, which regulates local capital markets, wrote to Ariston this week advising that the circular did not contain enough information.
The circular contained information which shareholders used to approve the company’s US$8 million rights offer.
Afrifresh Group of South Africa, which recently acquired a 40 percent stake in the horticultural concern from Emvest, was listed as the underwriter for the rights issue.
Contacted for comment, ZSE chairperson Mrs Eve Gadzikwa said she was not aware of the concerns raised by SECZ as she was out of the country.
“I am not in the country at the moment,” she said. “I am not able to comment because I don’t have any knowledge on the issue.”
Efforts to obtain official comment from Ariston were unsuccessful yesterday.
SECZ expressed reservations over inadequate background information about Afrifresh, particularly on whether the SA firm’s involvement in the deal was purely underwriting or as a shareholder.
It also raised concern over the use of an “unlicensed” independent financial advisor, IH Advisory, and an illustration of dilution of shareholding.
The regulator demanded clarification on the          impact of the recapitalisation, breakdown on the application of funds, capital expenditure programme and disclosure on the ownership status of the company’s estates.
SECZ said there was need for a debt maturity profile to enable investors and shareholders to make an assessment on the firm’s debt.
In an interview yesterday, SECZ chief executive Mr Tafadzwa Chinamo said Ariston should prepare a detailed circular, addressing its concerns and then hold a fresh shareholders’ meeting. 
“Their circular was substandard and they should do another one with adequate information which shareholders can then use to make informed decisions,” said Mr Chinamo.
He said their directive was not against the Ariston capital-raising initiative but to protect minorities.
“We are not stopping fund-raising initiatives by companies but things should be done properly,” he said.
“If shareholders are empowered with adequate information, they can make good decisions.”
SECZ has also raised similar concern on RioZim’s US$55 million capital-raising and has directed the company to address a number of  issues.
Ariston seeks to raise US$8 million, with US$3 million earmarked for debts, US$2,8 million for working capital and US$2 million for capital projects.