By Fred M’membe President of the Socialist Party
The Introduction In Parliament Of The Securities (Amendment) Bill No. 23 Of 2022
Mr Hichilema has said it is time for citizens and other stakeholders to open up and tell the government when there are things it is not doing well.
We agree with him, and want to tell Mr Hichilema that his government is not respecting the constitutional rights of citizens, and that our democratic values are being trampled upon with impunity by institutions that are meant to foster social and economic development. Just look at the despicable way the recent by-elections have been conducted and the violence the UPND has unleashed on its opponents in them. To continuously use violence to win an election is in fact to rig an election.
As Mr Hichilema surely knows, to achieve economic growth and improved livelihoods for the masses of our people, we need law and order and a stable social and legal environment. This is how countries like Singapore have succeeded.
On Friday, October 14 this year, Mr Hichilema presided over the 24th Cabinet Meeting. At this meeting, the Cabinet approved six (6) Bills for introduction in Parliament.
Among these six Bills was a very curious one titled the Securities (Amendment) Bill No. 23 of 2022. This Bill is a clear indicator that Mr Hichilema intends to abuse a state institution – the Securities and Exchange Commission (SEC) – to the benefit of himself and his friends. He cannot say that he was not aware of what was in the Bill.
Through Bills such as the Securities (Amendment) Bill, Mr Hichilema intends to undermine the Constitution and our democratic values to feed the insatiable and shameless greed of people who want to acquire other people’s property without paying a Ngwee.
It is a known fact that Mr Hichilema is the majority shareholder in an organisation called AfLife Holdings Group. It seems that it is intended to augment the growth of the AfLife Group through the introduction of bad laws, which have criminal and unconstitutional foundations, to be implemented by a surrogate regulator and a weak board of directors, such as is the case with the Securities and Exchange Commission.
It is strange that this Bill was not discussed with the stakeholders, nor was it referred to the Law Association of Zambia for its input. This has made it suspicious because why would government want to sneak this Bill into Parliament without consulting the concerned institutions and other stakeholders?
As such, we take this opportunity to thank the courageous stakeholders who made submissions against the Bill. We particularly thank Lusaka Securities for articulating and making well-informed submissions on it.
In introducing the Securities (Amendment) Bill, an attempt was made to hoodwink the nation into believing that it is for the purpose of enabling the Securities and Exchange Commission to efficiently and effectively supervise capital market operators, especially in combating money laundering and countering the financing of terrorism, but the purpose of this Bill is frightening and much more sinister.
In Clauses 19(B)(2)(a), 19(B)(4)(d) and 19(B)(4)(e) the Bill aims to:
- Provide for the SEC to take possession of a capital market operator,
- Run the affairs of a capital market operator, and,
- Transfer all or part of the capital market operator’s business to another capital market operator.
Surely, these provisions are draconian and run counter to what is provided for in the Constitution. Quite clearly, this Bill aims to legalise the theft of a capital market operator’s business.
Our Constitution provides for the protection of the proprietary rights of individuals. If those rights must be taken away for any reason, there is a due process that must be followed, which includes making representations to a court for a defence before persons can lose their property. This has been trampled upon in this Bill.
The role of the regulator is to supervise capital market operators and not to run their businesses, and when capital market operators are found to be weak, the regulator should look for ways of enhancing compliance to bring them back to good health. Instead, the Bill focuses on shutting down such operators with impunity.
How can the regulator be given statutory authority to take over and run a capital market operator’s business and, if he wishes, transfer it to someone else or completely sell its assets without capital market operators having the right of a stay of an action brought against them to enable the operators to challenge the matter and defend themselves in a court of law? Has the regulator got infinite knowledge of how to run every type of business run by capital market operators? Surely, we are seeing signs of a dictatorship establishing itself in Zambia.
The provisions in the Bill seem to target certain capital market operators for a hostile takeover to the benefit of the friends of those in power, and we are sure that capital market operators such as Standard Chartered Bank, Zambeef and others must be extremely nervous.
How can we introduce a Bill that promotes oppression and corruption to become law?
We are convinced that this law was mooted only for the purpose of stealing the businesses and assets of targeted capital market operators.
For the evil that is intended, the Bill provides for the Capital Market Tribunal and for the Securities and Exchange Commission to be given immunity for what they do or for what they fail to do. Which court or regulator has such immunity in Zambia? All courts are subject to complaints before the Judicial Complaints Commission. However, the nation through Parliament is being asked to exempt the Capital Markets Tribunal from the balancing effect and protection the Judicial Complaints Commission can give. What crimes are the Capital Markets Tribunal poised to commit?
We understand that a number of capital market operators took out actions against the SEC before the Capital Markets Tribunal. We believe that the intention of giving the Tribunal immunity is so that it can make bad decisions at the command of the regulator in cases before the Tribunal. The cases before the Tribunal have compelling evidence against the regulator. However, in the current situation, we doubt that anyone can win a case against the SEC, no matter how compelling the evidence is.
We also believe that the intention of giving immunity to the regulator is because the regulator at the Securities and Exchange Commission is being set up as the Thief-in-Chief for the benefit of certain business people.
Mr Hichilema boasted he would raise the bar when he came into office. Is promoting a thieving Bill such as the Securities (Amendment) Bill raising the bar? Surely, this Bill has demonstrated what kind of leader Mr Hichilema is.
If Mr Hichilema is not put in check we will find that our national wealth, and that of citizens, is stolen by his friends.
For this reason, we want to announce that all transactions that will not be in the best interest of the nation during Mr Hichilema’s term of office will be reversed when we come into office. The Socialist Party will not hesitate to give back to Caesar what belongs to Caesar! here are many Zambians who have left the country to do business elsewhere because of the bad culture that is against successful business people in Zambia.
When Mr Hichilema was elected into office, it was hoped that Zambian business people in the diaspora would come back and play a role in building a strong private sector of our economy. But look at what they did to James Ndambo not so long ago. Is it safe for Zambians to do big business in the country? Will Zambians feel encouraged to list their businesses on the Lusaka Securities Exchange? Only a crazy person can ever consider listing on the LuSE when bad laws like the Securities (Amendment) Bill are contemplated.
We want to make it very clear that we want Mr Hichilema to succeed during his term in office, provided that his success will be to the benefit of Zambians and not for himself and his friends only.
Accordingly, we have decided to notify the International Monetary Fund and the African Union about the Securities (Amendment) Bill No. 23, 2022 so they can help Mr Hichilema abandon his shameful intentions as exhibited in the Bill. Mr Hichilema must be subjected to the Peer Review mechanism.
We want leaders in the SADC and COMESA region to know about the Bill Mr Hichilema sent to Parliament. We also want the youths in Zambia to wake up and know about the plans the UPND leadership is making to steal people’s businesses and assets by using an evil legal instrument. We are also hereby notifying Transparency International about the bad intentions of the Securities (Amendment) Bill, which they must study and comment on.
We encourage Mr Hichilema to practise true servant leadership and not to sneak into Parliament evil amendment bills to his benefit and that of his friends. Instead of targeting the businesses of local people through Clause 19(B) in the Securities (Amendment) Bill, we encourage him to assist local business people to become stronger so they can create jobs and wealth and in so doing assist the national economy to grow firmly, strongly and rapidly.
We also encourage Mr Hichilema to strengthen governance at the Securities and Exchange Commission. We have taken a keen interest in the cases before the Capital Markets Tribunal. From these cases the regulator impresses us that he may be an economic hitman and has inculcated fear and concern in the minds of capital market operators. We see that he has brought disrespect to the office of the regulator to the extent that the capital markets integrity is in question, especially that he is highly conflicted in his personal dealings. Also the regulator seems to be tainted with corruption.
We note that by certain of his actions, the regulator has in fact already facilitated the illegal transfer of business from some capital market operators to their competitors without any compensation being paid. This smells of corruption. We also note that it seems that the SEC’s Board of Directors is so weak that it is unable to control the conduct of its regulator.
We further note that the Capital Market Tribunal is appointed by the Ministry of Finance, which is also the supervisor of the Securities and Exchange Commission. This is poor governance and it is obvious that the Capital Market Tribunal is not independent. Therefore, we demand that:
- First, someone other than the controlling ministry should appoint a Tribunal in Zambia, and we propose that the Chief Justice should appoint all tribunals in Zambia. This will make them independent. Cases before the Tribunal should not be for academic interest only.
- Second, the SEC’s Board of Directors should be dissolved immediately so that a more credible Board can be appointed.
- Third, the current regulator at the SEC should be immediately dismissed and a professional person capable of properly supervising and regulating the capital market on the basis of the Securities Act be appointed for the capital market to grow.
- Further, we encourage the Capital Market Tribunal to be courageous and professional and dispose of the cases before it transparently and without fear or favour.
- Also, we encourage the President to protect those regulated to ensure that no one should use the law to settle scores with those they regulate or enrich themselves at the expense of the governed capital market operators.
As such, let us recognise that it is constitutionally wrong to target capital market operators with bogus forensic audits for the purpose of witch-hunting to find contrived cases against innocent business people as the Securities and Exchange Commission is attempting to do.
In ending, we invite Mr Hichilema to ensure that the primitive culture of stealing other people’s property, which is akin to cattle rustling, is completely abandoned during his tenure of office.