High Court throws out securities monopoly suit
THE High Court has dismissed with costs an application by Chengetedzai Depository Company (CDC) which sought to set aside a government directive bringing to an end the company’s monopoly as the country’s sole securities depository.
The dispute involves Chengetedzai Depository Company, the Securities and Exchange Commission of Zimbabwe (SECZim) and the Finance ministry.
CDC sought a review of a directive issued by the capital markets regulator on 15 October 2021 on the basis that it acted ultra vires the law and failed to observe procedural fairness in issuing the directive giving effect to the transfer of securities from CDC to the Zimbabwe Stock Exchange (ZSE).
Chengetedzai’s monopoly was brought to an end when SECZim issued Directive SS 15/10.2021 in which the capital markets regulator committed transgressions ranging from non-observance of mandatory statutory processes to infringement with contractual and constitutional property rights. CSD’s court application also cites the ZSE as the second respondent.
CDC had argued that the directive amounted to “rules” as defined in section 118(2) of the SECZim Act. For that reason CDC contended that SECZim ought to have followed the procedure laid down in section 118 (6) for promulgating rules.
In terms of such the capital markets regulator was obliged to submit the rules in draft form for the minister approval and gazetting before rules became effective.
Opposing the application, SECZim through its lawyers Mawere Sibanda Commercial Lawyers and the ZSE which was represented by Kantor and Immerman argued that the CDC had no locus standi to sustain the proceedings and the entity had approached the courts in haste before exhausting domestic remedies provided for under the SECZim.
Presiding over the case, High Court judge Justice Joseph Chilimbe ruled that the applicant had an obligation to prove that the Securities and Exchange Commission, which was cited as the first responded in the court papers had acted outside the law.
“It (CDC) has not been able to discharge the onus on the grounds that it raised. It will not therefore not access the relief prayed for,” Justice Chilimbe ruled.
“And so apart from stating that this dispute does not justify calls by either side for punitive costs; It will be therefore ordered that the application be hereby dismissed with costs.