malvernmugadzikwa
Business Writer
The integrity of the Victoria Falls Stock Exchange (VFEX) will come to test tomorrow, as observers wait to see if it will proceed with the listing WestPro Holdings, which has not yet published a pre-listing supplementary report to address certain complaints raised by some stakeholders, as required by law.
WestPro was forced to release more disclosures ahead of its listing after the Securities Commission of Zimbabwe (SecZim) directed the company to publish a supplementary report on its undisclosed pending court cases that had not been included in the prospectus.
This followed the complaints registered by some parties who are suing companies related to WestPro and its directors, arguing the property firm did not make full disclosures in conformity with the listing laws.
WestPro listing on the US dollar-denominated bourse came under the spotlight after it emerged the company might have misled the public by not making sufficient disclosures in its listing prospectus.
The complainants alleged that WestProp did not make full disclosures of litigation against the firm, which may affect the value of its shares, which is in breach of sections 97 and 114 of the Securities and Exchange Act [Chapter 24:25]. SecZim, the regulator of the capital markets wrote to the VEFX and WestProp to file their presentations.
In terms of the supplementary VEFX pre-listing rules, the applicant must notify the bourse of the need to publish a supplementary pre-listing statement, which should be published 72 hours before dealings in securities commence.
In the event that it is not possible to issue the supplementary pre-listing statement 72 hours before dealings start, the VFEX will declare the commencement of dealings postponed to a date approved by the VEFX.
When contacted for comment, VEFX chief executive officer Justin Bgoni declined to comment.
Given that the rule gives a minimum of 72 hours for publication before dealings in the company’s securities, which quite simply is not feasible between the time the supplementary report was issued on April 26, 2023 evening and the morning of 28 April.
Again, the listing rule requires the publication of the supplementary report on both the VFEX and WestProp websites. By the time of writing this story, the supplementary litigations report had not yet been posted on the VEFX and WestPro websites.
“It is a litmus test for the VEFX; whether they are going to follow or breach rules unless they have the powers to grant exemptions,” said one analyst who declined to be identified for professional reasons.”
“There might be some technicalities, which may allow the listing to proceed and if any, should be well explained.”
The VEFX, a subsidiary of the Zimbabwe Stock Exchange was established as part of efforts to lure foreign investors and analysts contend that observing the high standards of integrity was critical to growing the market and making it more attractive to investors.
Bongani Ndlovu