The Supreme Court has upheld the suspension of stock-broking firm, Remo but reduced its suspension by six months from the initial five years, court papers have shown.
The firm’s managing director Mohamed Mahmed, who also had his securities dealers’ license cancelled by the Securities Commission of Zimbabwe (SECZ) however had his appeal dismissed while Rezana Ebrahim, the firm’s compliance officer and John Motsi, a registered securities dealer had their sentences suspended.
SECZ cancelled Remo’s broker’s license, suspended Mahmed, Ebrahim and Motsi in 2012 after Remo failed to recover shares it had pledged as security after borrowing close to $2 million from Interfin Securities.
Remo then sought the intervention of the Zimbabwe Stock Exchange to pressure Interfin to return the shares, which prompted an investigation into the issue.
Proctor and Associates, which was tasked by SECZ to carry out the investigation, established that Remo did not record shares that were in question in the nominees register as required by the Securities Act.
Investigators also said Remo Investments engaged in non-permissible activities in the money market, leading to its suspension.
The Administrative Court in 2012 upheld the decision and Remo, Mahmed, Ebrahim and Motsi launched a joint appeal against the judgment to the Supreme Court.
“The appeal succeeds in part to the extent that the sanction imposed on REMO is reduced and, in respect of Ebrahim and Motsi, is set aside entirely. I find no justification for the actions of the Commission against Ebrahim and Motsi,” read part of the judgment delivered by the Supreme Court bench made up of justices Garwe, Gowora and Patel.
“The appeal by the first applicant (REMO) is allowed to the extent that the conviction on a charge of contravening section 50(1) of the Act is set aside and consequent thereto, the period of cancelation is reduced to four years and six months.”- The Source