By Staff Reporter
In a stunning turn of events, lawyers representing four companies and one businessman have written a letter to the Victoria Falls Stock Exchange (VFEX) CEO and the Securities and Exchange Commission of Zimbabwe challenging the recent listing of WestProp on the stock exchange for allegedly making false statements in its litigation report.
Through their lawyers Mutumbwa Mugabe and Partners, Fairclot Investments, Coolfitch Investments, Glasswing Investments, Halinka Investments and businessman Georgios Katsimberis allege that WestProp failed to disclose the true extent of its legal troubles, potentially breaching the Securities and Exchange Act.
“Our clients believe, with good reason, that Appendix 3 has been deliberately crafted with very little detail in order to mislead. Our clients believe further that certain crucial litigation with the potential to materially affect the value of the securities being registered has been omitted with the result (if not the aim) that potential investors are likely to be misled as to the true value of the securities being offered by the Issuer,” read part of the letter
The lawyers highlight eleven court cases that were omitted from the prospectus, calling for corrective action to be taken before the listing proceeds.
“It is in this light that we wish to draw your attention to a number of legal cases that are in our clients view ought to have been included in the litigation report if the aim of such a report was as intended by the guidance: to present an accurate picture of the litigation that might impact on the value of securities being offered for trade.
“The omission of these cases is clearly in violation of the Securities and Exchange Act, requiring the Commission to provide regulative oversight, in keeping with its mandate as provided for under section 4 of the aforesaid Act,” said the lawyers
The lawyers added that their clients believe corrective measures must be taken before the listing is allowed to proceed.
“We invite your good offices to take all measures to ensure that the integrity of the VFEX, and indeed any securities exchange in Zimbabwe is maintained. We believe that, that can only be possible if investors are given full access to all relevant and pertinent information regarding all securities listed or about to be so listed. Our clients believe that this was not done here and that if anything the listing must not be allowed to go ahead without corrective action having been taken.
“It would be a dereliction of the duty to offer high levels of investor protection, confidence and trust if questions around the integrity of the information provided in support of a floatation were not investigated. Particularly where such questions raised the very real impression of market manipulation and financial crime.” said Mutumbwa Mugabe and partners.