The Patriots for Economic Progress – PeP have expressed disappointment over the abuse of authority and office by President Hakainde Hichilema in seeking to use Parliament to pass a detrimental and unconstitutional law called the Securities (Amendment) Bill.
PeP President Sean Tembo explained in a statement that the Securities (Amendment) Bill is to be used as a tool for justifying about $120 million of assets that were illegally grabbed from a subsidiary of a well-known indigenous Zambian financial services group, as well as to further use this intended law to grab more assets from this company, using the Securities and Exchange Commission – SEC and for the benefit of the President’s longstanding business associate and friend who runs a rival financial services group.
Mr Tembo disclosed that the background to this matter is that there is a cartel of four prominent individuals who are well known business associates of President Hichilema, and this cartel is now seeking to exploit the ascendance to the Office of President by Mr Hichilema to expand their business empires using both legal and illegal means, adding that this cartel is made up of a well-known business associate of the President whose young brother works for the Securities and Exchange Commission – SEC, another longstanding business associate of the President who runs a financial services group in which the President has an interest, a third longstanding business associate of the President who is also a Minister, and President Hichilema himself.
He further disclosed that in the quest to kill competition and expand their own financial services group, this cartel has been using the Securities and Exchange Commission to grab assets from competitors and allocate to themselves, and not so long ago, they took over a subsidiary of a rival financial services group, on the flimsy excuse that it was offering a financial product which was not sanctioned by SEC, suffice to mention that the said financial product had been in existence for more than 10 years without SEC raising any queries, after the cartel, through SEC took over this subsidiary, they proceeded to ransack it including transferring assets worth approximately $120 million to the financial services group owned by one of the cartel members, without any consideration or compensation.
“The victims challenged the ransacking of their company in the Capital Markets Tribunal, as provided by the Securities Act No.41 of 2016, but the matter has not been given a hearing up to now, more than a year later, ostensibly because of the influence of this powerful cartel,” he disclosed
“Because of this Court challenge, the cartel appears to have been unsettled as they realized that they acted outside of the law because under the existing Securities Act No. 41 of 2016, SEC does not have the power to transfer the assets of a company under judicial management, to another company without consideration or compensation,” he added
Mr Tembo mentioned that as a way of seeking to cover up their illegal activities, the cartel appears to have come up with the idea of amending the existing law through the Securities (Amendment) Bill. The objectives of this Bill are two-fold; firstly to atone for the illegalities that the cartel has committed so far, and secondly to empower SEC to grab more assets from other competitors. In addition to this $120 million grab, the cartel through SEC has grabbed assets of unknown value from two other financial services companies which have since been shut down after having their operating licenses revoked by SEC and assets taken over.
He explained that the Securities (Amendment) Bill was quickly drafted by the cartel and received Cabinet approval in a record time, without any consultation from industry players in the capital market, the Bill was then taken to Parliament for enactment, where the Parliamentary Committee on Budgeting was tasked to receive submissions on this Bill and as total of 17 reputable institutions made submissions to Parliament on this Bill. These institutions included the Lusaka Securities Exchange (LuSE), Zambia Institute of Chartered Accountants (ZiCA), the Drug Enforcement Commission (DEC), the Capital Markets Association of Zambia, Bankers Association of Zambia (BAZ), Bank of Zambia (BOZ), the Securities and Exchange Commission (SEC), the Financial Intelligence Center (FIC), the Zambia Institute for Policy Analysis and Research (ZIPAR), the submissions of 16 out of the 17 were consistent in stating that the Securities (Amendment) Bill needed to be withdrawn and reconsidered for a variety of reasons, and only SEC supported the Bill.
Mr Tembo noted that consequently the Parliamentary Committee on Budgeting, whose majority members including the Chairperson are UPND MPs, recommended to the house that the Bill should be withdrawn and reconsidered as it is detrimental to the Zambian capital market. The full house agreed, except for the Minister of Finance and National Planning who stated that the Bill was too important to be withdrawn.
“Well, is the Bill too important to Zambia’s capital market, or it is too important to the cartel?” Mr Tembo questioned
The PeP President has since called on President Hichilema to immediately cease and desist from abusing the authority of his office to create illegal wealth for himself and his longstanding business associates, at the expense of destroying public confidence in Zambia’s legal and regulatory framework.
“It is undeniable that the President has vast powers, both directly and through the National Assembly, but those powers should be used to do good. We further call upon the Minister of Finance to immediately withdraw the Securities (Amendment) Bill as recommend by the Parliamentary Committee on Budgeting. State institutions such as Parliament and SEC should not be used for the personal selfish motives of a few select individuals, regardless of who those individuals are, how powerful they are, and what position they occupy in society,” Mr Tembo said