By Alois Vinga
SMALL shareholders in various companies in Zimbabwe claim they were being bullied and sidelined by those holding bigger stakes in the firms when it came to decision making processes.
Addressing delegates at a Securities and Exchange Commission of Zimbabwe (SECZ) stakeholder engagement forum Tuesday, Investment Managers representative, Jubelah Magutakuona said smaller investors were abused, adding that this may lead to loss of value in the long term.
“The voting process on transactions leaves small shareholders disenfranchised because our votes do not enable us to meaningfully contribute to decisions,” he said.
Magutakuona said as smaller investors, theyoften received minimum information on the companies operations like financial statements adding that the manner in which top management was offered shares required transparency.
The small shareholders representative said that big shareholders can exert influence on companies and risks being bought using resources available and then resold to a small group of people unfairly.
“There must be a rule book to avoid these malpractices and protect minorities,” Magutakuona said.
He also called on stakeholders to avoidundue influence on regulators and make sure that they were not captured by a cabal of shareholders adding that the rule book must also address that.
But in his presentation at the forum,Tawanda Nyambirai, who has enjoyed a close business relationship with leading mobile services provider, Econet Wireless, urged the small shareholders to appreciate the risks taken by the major investors.
“Shareholders who have large stake in companies invest more capital into and this means that they stand the risk oflosing out much more should the company fail to generate profits hence the need to respect the way they run the companies,” he said.
Nyambirai also hinted that investors become major or minor shareholders on the basis of financial resources they choose to pour into a company and whatever happens in terms of decision making is legally proper.