ALBAN Chirume, the chief executive officer (CEO) of the Zimbabwe Stock Exchange (ZSE), who was suspended this week for sanctioning a listed entity's cash call, despite reservations from the listing committee, could face the chop after falling out with the bourse's board.Chirume is being investigated over a litany of allegations, some of which are unrelated to the latest debacle, which involves Econet Wireless Zimbabwe's rights issue to raise US$130 million to pay offshore debts.
A stockbroking source said Chirume was also being investigated for incompetence.
The loans were guaranteed by Econet Global, the major shareholder in the company.
The development comes as Econet's legal team has already prepared to defend any hostile move against its cash call, which was approved at an extraordinary general meeting (EGM) held against the ZSE board's instruction that the firm calls off the shareholders' meeting over a number of issues.
Sources indicated that the working relationship between the ZSE board and its listing committee had irretrievably broken down due to alleged insubordination by Chirume.
He allegedly ignored concerns raised by the listing committee over Econet's planned rights issue and proceeded to approve the telecommunications company's cash mobilisation initiative.
Indications are that the telecommunications firm was likely to challenge the standing of the ZSE's board chairperson, Caroline Sandura, should the bourse refuse to accept the outcome of the EGM, which overwhelmingly voted in favour of the company's plans for the rights issue.
Sandura has been accused by Econet of being conflicted in the case due to the fact that she is the company secretary for a rival, State-controlled telecommunications firm, TelOne.
She had ordered Econet not to proceed with the EGM, saying her board wanted the mobile telecommunications firm to clarify a number of technical concerns.
On Monday, Sandura's board sent Chirume on forced leave for allegedly approving the publication of a circular by the mobile telecommunications company to raise US$130 million through a rights offer.
Some sections of the market were quick to link Sandura to the suspension of Chirume over the allegations of insubordination.
A legal practitioner said while some acts of insubordination may not be serious enough to warrant dismissal, there were instances when this was too grave to warrant such action. For example, he said, instances when an employee is insubordinate to a superior in situations involving members of the public or external parties.
The probe over Chirume appeared to have taken a trajectory that apparently sought to gather sufficient evidence to make dismissal an appropriate sanction, one insider indicated.
But it would appear the battle may become protracted, particularly given concerns that Sandura may have, through her board's latest moves, sought to undermine Econet, the largest telecommunications firm by subscribers, a situation that would abet her own employer, TelOne, who last week rolled out a national broadband project under a US$98 million China Exim Bank facility.
She denied this in an interview with the Financial Gazette.
The project was granted national project status, meaning that components for the project would be imported duty-free.
TelOne competes with Econet's sister firm, Liquid Telecom, a data, voice and internet protocol provider in eastern, central and southern Africa, which supplies fibre optic, satellite and international carrier services to Africa's largest mobile network operators, internet service providers and businesses of all sizes.
Liquid Telcom also owns ZOL.
At present, TelOne and Zol Zimbabwe are fiercely competing for WiFi market share in the country.
There have been some unkind exchanges between Econet and the ZSE regarding the EGM.
Econet said the ZSE board had no jurisdiction to deal with the approval of rights offers or the listing of securities on the bourse.
Econet also alleged conflict of interest that stemmed from the fact that Sandura was employed by their competitor.
Econet charged that the ZSE board had "no jurisdiction to deal with the approval of rights offer circulars or the listing of securities on the Zimbabwe Stock Exchange".
The company said it considered the ZSE board's notice "to be extremely disruptive and an infringement of the rights of the company and its shareholders".
Sandura has dismissed reports alleging conflict of interest in this case, saying she has issued the ZSE statement on behalf of its board.
"I am not conflicted at all; this is a rights issue and TelOne is not involved with stock exchange issues. If I was (conflicted), I would have declared my interest and excused myself. TelOne is not at war with Econet at all and is not listed on the ZSE," she told the Financial Gazette.
Sandura said the board had sent Chirume on forced leave to investigate why the circular was approved without the involvement of the listing committee.
"We want to understand the motives behind what transpired in the past two weeks. As ZSE, we want to be guided by transparency and fairness. We are not fighting Econet or him (Chirume), but we want answers to what has been happening. As regulator, we should set standards that do not compromise the integrity of the stock exchange. As investigations are being done, we cannot rule out unearthing other issues that are not in line with the stock exchange's best practices by those being investigated since they assumed office," she said.
Chirume, who was appointed ZSE CEO in May 2013, will be receiving all his benefits while on forced leave.
A source said the listing committee's concerns had been "completely ignored" by Chirume, who went on to approve Econet's proposals without question.
This, the source said, had peeved members of the listing committee as well as the ZSE board.
All resolutions at Econet's EGM were passed by an average of 74 percent votes, while 16,5 percent opposed the resolutions and 9,5 percent abstained.
Taking out the Econet Global vote, the group said 56 percent would still have voted in favour of Econet's plans.
Under the proposal, shareholders were to follow their rights by paying the subscription price of the shares and linked debentures directly outside Zimbabwe into the company's debt account with African Export-Import Bank.
The ZSE board met on January 30 and directed the bourse's management to write to Econet advising them that Econet Global should not participate in the rights issue vote at the EGM.
Econet Global will be the underwriters of this transaction.
Sandura said Econet Global was a related party as the majority shareholder of the telecoms company, and therefore should not have participated in the voting process.