THE Zimbabwe Stock Exchange (ZSE) has suspended CFI Holding Limited from trading on the main bourse for allegedly breaching free float requirements of its shares.
ZSE also wants the company to addresses governance issues concerning its board.
In emailed responses to NewsDay yesterday, acting ZSE chief executive officer, Martin Matanda said CFI Holdings Limited was in breach of the free float requirements as per section 4 paragraph 4.25 (d) of the listing requirements.
“The free float requirements are in two parts – a listed company must have a minimum of 300 shareholders and, secondly, the minority shareholders must hold a minimum of 30% of the total shares in issue. In the case of CFI Holdings Limited, the number of shareholders is well in excess of the 300 and so there is no problem there,” he said.
“However, the number of shares held by the minorities (the free float) is currently less than the minimum of 30% of the total.”
Matanda said the suspension of trading began on Tuesday and would be in force for the next 90 days unless CFI Holdings meets the stipulated requirements.
One of the conditions for listing on the ZSE is to have what is called the “free float”, which is the minimum number of shares that should be held by the minority shareholders at any point and the minimum threshold prescribed is 30%.
“It (the breach) happened during the course of trading and in the case for CFI, it happened during what was happening in 2017. I think you are aware of (shareholder infighting)… so what happened was the shareholding ended being concentrated and very little was left for minorities,” Matanda added.
Also, ZSE has requested CFI Holdings to ensure the appointment of a board chairman, chief executive officer, finance director and non-executive directors be “not affiliated or have any association with any of the company’s shareholders.”
This was brought by the fact Messina Investments, a vehicle owned by British tycoon Nicholas van Hoogstraten, who has a 20% stake in the company, lobbied other minority shareholders to boot out some directors.
Former board chairperson, Hamish Rudlands and directors Douglas Mamvura and Ephraim Chawoneka resigned to avoid being voted out due to their links to the National Social Security Authority (NSSA).
NSSA has a stake in CFI Holdings, as they own Zimre Properties, who in turn have their own investment vehicle, “Stalap Investments”, which has majority shareholding in the agro processing group of 40%.
CFI Holdings did not respond to questions sent by the paper, but sources close to the board say they are not worried and would prepare a statement soon.–newsday