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SC85-14 - REMO INVESTMENT BROKERS (PRIVATE) LIMITED and MAHOMED IQBAL MAHMED and REZANA EBRAHIM and JOHN MOTSI vs SECURITIES COMMISSION OF ZIMBABWE

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Administrative Law-viz the exercise of administrative discretion.
Investment Law-viz securities.
Procedural Law-viz appeal re findings of fact made by the lower tribunal.
Procedural Law-viz appeal re grounds of appeal re prolix grounds for appeal.
Procedural Law-viz appeal re grounds for appeal iro prolix grounds of appeal.
Procedural Law-viz appeal re grounds of appeal iro findings of fact made by the lower court.
Procedural Law-viz condonation re the pleading of form over substance.
Procedural Law-viz rules of evidence re documentary evidence.
Procedural Law-viz the audi alteram partem rule.
Administrative Law-viz the exercise of administrative prerogative re the audi alteram partem rule.
Procedural Law-viz rules of construction re statutory provisions iro purpose of the legislation.
Procedural Law-viz rules of interpretation re statutory provision iro intent of the legislature.
Procedural Law-viz rules of construction re statutory provision iro legislative intent.
Procedural Law-viz rules of evidence re unchallenged evidence.
Procedural Law-viz rules of evidence re undisputed averments.
Procedural Law-viz rules of evidence re uncontroverted submissions.
Procedural Law-viz final orders re issues for determination by the court.
Procedural Law-viz appeal re leading of new evidence on appeal iro appeals in the wide sense.
Procedural Law-viz appeal re leave to lead further evidence on appeal iro appeals in the wide sense.
Labour Law-viz discipline re conduct of disciplinary tribunals.
Procedural Law-viz rules of construction re mandatory provisions.
Procedural Law-viz rules of evidence re prevaricative evidence.
Procedural Law-viz rules of evidence re findings of fact iro assessment of evidence.
Procedural Law-viz pleadings re admissions.
Constitutional Law-viz constitutional rights re equal protection of the law.

Rules of Court re: Approach, Abuse of Court Process, Strict and Substantial Compliance & Pleading of Form over Substance


This is an appeal against a judgment of the Administrative Court by which the court dismissed the appeal to that court against a decision of the Securities Commission of Zimbabwe (“the Commission”) cancelling the licences of the first and second appellants and imposing sanctions upon the third and fourth appellants.

The first appellant, Remo Investment Brokers (Pvt) Ltd (“REMO”), is one of the longest established registered securities exchanges within Zimbabwe. The second appellant, Mahomed Iqbal Mahmed (“Mahmed”), is a securities dealer and is also the Managing Director of Remo Investment Brokers (Pvt) Ltd. The third appellant, Rezana Ebrahim (“Ebrahim”), is married to Mahomed Iqbal Mahmed and is a Compliance Officer for Remo Investment Brokers (Pvt) Ltd. She and Mahomed Iqbal Mahmed are the beneficial owners of Remo Investment Brokers (Pvt) Ltd. The fourth appellant, John Motsi (“Motsi”), is a Registered Securities Dealer.

Following upon turbulence within the securities sector, the Securities Commission of Zimbabwe suspended Remo Investment Brokers (Pvt) Ltd from trading for a period of six months. After the suspension of REMO, the Commission instituted investigations, through Proctor and Associates, who compiled a report. Armed with that report, the Commission charged REMO and Mahomed Iqbal Mahmed of contravening certain specified sections of the Securities Exchange Act [Chapter 24:25] (“the Act”).

The appellants were invited to make representations to the charges. Ultimately, the Securities Commission of Zimbabwe confirmed the convictions and cancelled the licences of Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed for a period of five years after which they could re-apply for registration. Rezana Ebrahim was advised by the Commission that she was permanently disapproved as a Compliance Officer. John Motsi was able to retain his Dealer's licence but was advised that he had to practise under a supervising senior broker for a period of one year.

Aggrieved by the decisions of the Securities Commission of Zimbabwe, the appellants collectively launched an appeal with the Administrative Court which dismissed the appeal and confirmed both the conviction and sanctions imposed by the Commission.

The appellants now appeal to this Court on several grounds.

Counsel for the Securities Commission of Zimbabwe took the point, in his heads of argument, that the grounds of appeal complain against every finding made by the court a quo. The grounds, which number thirteen, have been framed too widely. They are not clear and concise as required by the Rules of this Court.

Although the manner in which the grounds have been set out is not in itself fatal to the appeal, it would be neater to deal with the appeal on the basis of the substantive issues for resolution rather than the piece meal approach detailed within the grounds.

Appeal, Leave to Appeal, Leave to Execute Pending Appeal re: Grounds of Appeal and Notice of Appeal iro Approach


This is an appeal against a judgment of the Administrative Court by which the court dismissed the appeal to that court against a decision of the Securities Commission of Zimbabwe (“the Commission”) cancelling the licences of the first and second appellants and imposing sanctions upon the third and fourth appellants.

The first appellant, Remo Investment Brokers (Pvt) Ltd (“REMO”), is one of the longest established registered securities exchanges within Zimbabwe. The second appellant, Mahomed Iqbal Mahmed (“Mahmed”), is a securities dealer and is also the Managing Director of Remo Investment Brokers (Pvt) Ltd. The third appellant, Rezana Ebrahim (“Ebrahim”), is married to Mahomed Iqbal Mahmed and is a Compliance Officer for Remo Investment Brokers (Pvt) Ltd. She and Mahomed Iqbal Mahmed are the beneficial owners of Remo Investment Brokers (Pvt) Ltd. The fourth appellant, John Motsi (“Motsi”), is a Registered Securities Dealer.

Following upon turbulence within the securities sector, the Securities Commission of Zimbabwe suspended Remo Investment Brokers (Pvt) Ltd from trading for a period of six months. After the suspension of REMO, the Commission instituted investigations, through Proctor and Associates, who compiled a report. Armed with that report, the Commission charged REMO and Mahomed Iqbal Mahmed of contravening certain specified sections of the Securities Exchange Act [Chapter 24:25] (“the Act”).

The appellants were invited to make representations to the charges. Ultimately, the Securities Commission of Zimbabwe confirmed the convictions and cancelled the licences of Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed for a period of five years after which they could re-apply for registration. Rezana Ebrahim was advised by the Commission that she was permanently disapproved as a Compliance Officer. John Motsi was able to retain his Dealer's licence but was advised that he had to practise under a supervising senior broker for a period of one year.

Aggrieved by the decisions of the Securities Commission of Zimbabwe, the appellants collectively launched an appeal with the Administrative Court which dismissed the appeal and confirmed both the conviction and sanctions imposed by the Commission.

The appellants now appeal to this Court on several grounds.

Counsel for the Securities Commission of Zimbabwe took the point, in his heads of argument, that the grounds of appeal complain against every finding made by the court a quo. The grounds, which number thirteen, have been framed too widely. They are not clear and concise as required by the Rules of this Court.

Although the manner in which the grounds have been set out is not in itself fatal to the appeal, it would be neater to deal with the appeal on the basis of the substantive issues for resolution rather than the piece meal approach detailed within the grounds.

Rules of Construction or Interpretation re: Approach


This is an appeal against a judgment of the Administrative Court by which the court dismissed the appeal to that court against a decision of the Securities Commission of Zimbabwe (“the Commission”) cancelling the licences of the first and second appellants and imposing sanctions upon the third and fourth appellants.

The first appellant, Remo Investment Brokers (Pvt) Ltd (“REMO”), is one of the longest established registered securities exchanges within Zimbabwe. The second appellant, Mahomed Iqbal Mahmed (“Mahmed”), is a securities dealer and is also the Managing Director of Remo Investment Brokers (Pvt) Ltd. The third appellant, Rezana Ebrahim (“Ebrahim”), is married to Mahomed Iqbal Mahmed and is a Compliance Officer for Remo Investment Brokers (Pvt) Ltd. She and Mahomed Iqbal Mahmed are the beneficial owners of Remo Investment Brokers (Pvt) Ltd. The fourth appellant, John Motsi (“Motsi”), is a Registered Securities Dealer.

Following upon turbulence within the securities sector, the Securities Commission of Zimbabwe suspended Remo Investment Brokers (Pvt) Ltd from trading for a period of six months. After the suspension of REMO, the Commission instituted investigations, through Proctor and Associates, who compiled a report. Armed with that report, the Commission charged REMO and Mahomed Iqbal Mahmed of contravening certain specified sections of the Securities Exchange Act [Chapter 24:25] (“the Act”).

The appellants were invited to make representations to the charges. Ultimately, the Securities Commission of Zimbabwe confirmed the convictions and cancelled the licences of Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed for a period of five years after which they could re-apply for registration. Rezana Ebrahim was advised by the Commission that she was permanently disapproved as a Compliance Officer. John Motsi was able to retain his Dealer's licence but was advised that he had to practise under a supervising senior broker for a period of one year.

Aggrieved by the decisions of the Securities Commission of Zimbabwe, the appellants collectively launched an appeal with the Administrative Court which dismissed the appeal and confirmed both the conviction and sanctions imposed by the Commission.

The appellants now appeal to this Court on several grounds.

Counsel for the Securities Commission of Zimbabwe took the point, in his heads of argument, that the grounds of appeal complain against every finding made by the court a quo. The grounds, which number thirteen, have been framed too widely. They are not clear and concise as required by the Rules of this Court.

Although the manner in which the grounds have been set out is not in itself fatal to the appeal, it would be neater to deal with the appeal on the basis of the substantive issues for resolution rather than the piece meal approach detailed within the grounds.

A preliminary point raised on the appellants' behalf was that the court a quo had erred in finding that the cancellation of the licences of Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed was effected in terms of section 105 of the Securities Exchange Act [Chapter 24:25]. In the alternative, it was argued that the court erred in failing to find that the cancellation of the said licences was premature regard being had to the provisions of section 48 as read with section 108 of the Securities Exchange Act [Chapter 24:25].

It was contended, further, that the court a quo had erred in any event in failing to find that, contrary to the provisions of section 105(2) of the Securities Exchange Act, the appellants had not been afforded an adequate opportunity to be heard. It was argued that they did not receive a fair hearing.

It was therefore contended that on this basis the appeal should succeed.

Before the Administrative Court, the appellants had similarly argued that the cancellation of the licences had been done in breach of the quoted sections. Per contra, the respondent contends that the licences for Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed were cancelled under section 105 of the Securities Exchange Act [Chapter 24:25].

The court a quo found that, in terms of section 48(3) of the Securities Exchange Act, the Securities Commission of Zimbabwe was not empowered to cancel a licence under section 48(1) until a period of thirty (30) days allowing for an appeal to the Administrative Court in terms of section 108 would have elapsed. The court, however, found that contrary to the contention of the appellants, the licences were cancelled in terms of section 105 of the Securities Exchange Act as opposed to section 48(1).

In the circumstances, the court a quo came to the conclusion that there had been no breach of section 48(3) and section 108 of the Securities Exchange Act on the part of the Securities Commission of Zimbabwe.

In my view, the dispute centres on the interpretation of sections 48, 49 and 105 of the Securities Exchange Act [Chapter 24:25].

The powers of the Securities Commission of Zimbabwe to cancel a licence are provided for in section 48 and section 105 of the Securities Exchange Act. It was section 105 which the court found to be the applicable section.

Section 105(1) of the Securities Exchange Act reads in relevant part:

“If, after considering an inspector's report sent to it in terms of subsection (1) of one hundred and four, together with any representations made by the person, committee or operator concerned in terms of subsection (3) of that section, the Commission is satisfied that the person, committee or operator as the case may be, has contravened any term or condition of his or her licence, registration or approved scheme, as the case may be, or any provision of this Act, or any direction, requirement or order made under this Act, the Commission may, subject to subsection (2), do any of one or more of the following -

…,.

(f) Direct the person, committee or operator to suspend all or any of his or her business;

…,.

(i) In the case of a licensed or registered person or entity, cancel the licence or registration or amend any of its terms and conditions.”

It is common cause that prior to launching an investigation into the activities of Remo Investment Brokers (Pvt) Ltd, the Securities Commission of Zimbabwe advised the former, in writing, that it intended to investigate the relationship between itself and Interfin Securities (Private) Limited (“Interfin”), and, further, that to facilitate such investigation, it was necessary to cause the suspension of Remo Investment Brokers (Pvt) Ltd.

The appellants have not challenged the propriety of the suspension.

The Securities Commission advised Remo Investment Brokers that the suspension was being effected in accordance with the provisions of section 49 of the Securities Exchange Act. The suspension was effected by a letter dated 29 March 2012, addressed to Mahomed Iqbal Mahmed in the following terms:

“An announcement was made at yesterday's trading session that your firm is suspended from trading on the Zimbabwe Stock Exchange with immediate effect.

A complaint was received from Remo Investment Brokers (Pvt) Ltd that Interfin Securities had mis-appropriated shares lodged as collateral in a loan transaction. The Zimbabwe Stock Exchange and Securities Commission of Zimbabwe have since had sight of Interfin Securities (Pvt) Ltd's response to the allegations.

Regrettably, there are serious inconsistencies in the submissions made by both parties so that it has been found necessary to suspend you from trading in terms of section 49 of the Securities Act in order to facilitate a full investigation. Amongst other issues, the enquiry will seek to establish the exact nature and terms of the transaction between two members of the Zimbabwe Stock Exchange involving such a material sum of money as well as the true beneficial owner of the shares lodged as collateral with yourselves.

The period of suspension is a maximum of 6 months but regular reviews will be carried out and you will be permitted to return to trading as soon as possible after satisfactory conclusion of the matter.

In the circumstances, we look forward to your full co-operation with the matter.”

Section 49 of the Securities Exchange Act, under which the licence was suspended, reads in relevant part:

49 Suspension of a licence

(1) Subject to subsection (6), if the Commission considers it necessary to suspend a licence -

(a) In order to facilitate an investigation into the holder's conduct; or

(b) Pending the determination of an appeal in terms of section one hundred and eight; or

(c)…,.

the Commission may, by notice in writing to the holder, suspend the licence wholly or partially in relation to all or any of the activities authorised by the licence.

(2) A suspension in terms of subsection (1) shall last for such period as the Commission may specify, but in no case shall it last for longer than six months.”

The position of the appellants is that once the Securities Commission suspended the licence in terms of section 49, it was only logical that any cancellation subsequent to such suspension be done in terms of section 48(1), and, that consequently, the provisions of section 48(3) would apply.

The argument advanced on behalf of the appellants is that once a licence is suspended under Part V of the Securities Exchange Act, specifically in terms of section 49, then it stands to reason that any cancellation of the licence can only be effected in terms of section 48 as it is also found in Part V of the Securities Exchange Act.

As I understand the argument, section 49 must be read together with section 48 of the Securities Exchange Act.

The letter of 29 March 2012 is specific as to the intention behind the suspension; that there was need to investigate the relationship between Remo Investment Brokers and Interfin Securities. The Securities Commission did not, in the letter, specify any alleged violation on the part of Remo Investment Brokers, and, the logical conclusion is that it was intended that the investigation would reveal if there was any wrongdoing on the part of Remo Investment Brokers and Interfin Securities in their mutual dealings.

The facts considered by the court a quo were the following;

After the suspension, the Securities Commission appointed Proctor and Associates to investigate the conduct of Remo Investment Brokers and Interfin Securities. This power is derived from section 103(1) of the Securities Exchange Act which empowers the Securities Commission to direct an inspector to conduct an investigation where:

“(e) The Commission has reasonable grounds for believing that a licensed person or board of a registered securities exchange or operator of a central securities depository, or any person connected with such a person, board or operator, has committed an offence under this Act, other than an offence arising out of conduct referred to in paragraph (a) or (b); or…,.”

Upon completion of an investigation, an inspector is required, in terms of section 104(1), to forward the report to the Securities Commission. On receipt of a report from the inspector, the Securities Commission is required, under section 104(2), to forward the report to the licensee and invite the licensee to make representations to it on the conclusions of the inspector and the recommendation.

On 7 May 2012, the Securities Commission sent a copy of the report from Proctor and Associates to Remo Investment Brokers and requested a written response within a period of thirty days. Remo Investment Brokers responded by a letter dated 8 May 2012.

Section 104(2) of the Securities Exchange Act [Chapter 24:25] provides in relevant part:

“On receipt of a report in terms of subs (1), the Commission shall -

(a) Send a summary of the conclusions reached in the report, and any recommendations made therein, to the licensed person, committee of the registered securities exchange, or operator of the central securities depository, as the case may be, that was the subject of the investigation; and

(b) Invite the committee, licensed person or operator concerned to make representations on the conclusions and recommendations set out in the summary.

3. A licensed person, committee of a registered securities exchange or operator of a central securities depository that has been sent a summary of conclusions and recommendations in terms of subsection (2) may, within thirty days, submit to the Commission representations on any of the conclusions or recommendations.”

On 23 May 2012, the Securities Commission advised all the appellants, in writing, that it intended to cancel the licences of the first two and impose sanctions on the last two, and, as a consequence, all the appellants were invited to appear before the Commission in person to make representations.

Subsequent to the letter of 23 May 2012, all the appellants appeared before the full Board of the Commission and made representations on the proposed action intended by the Commission against each of them. On 7 June 2012 the Commission proceeded to cancel the two licences and imposed the sanctions which are the subject of this appeal.

Having confirmed that the cancellations were effected under section 105 of the Securities Exchange Act, the court a quo also found that the cancellations were not done in a summary manner but after due consideration of a report presented to it by Proctor and Associates following upon an investigation into the activities of the appellants and Interfin Securities.

Section 48 of the Securities Exchange Act, on which the appellants hinge their appeal, reads:

48 Cancellation of licence

(1) Subject to subsections (2) and (3), the Commission may, by notice in writing to the holder, cancel a licence if the Commission has reasonable grounds for believing that…,.

(a) The holder has ceased to carry on business; or

(b) The licence was issued in error or through fraud or the misrepresentation of a material fact by the holder; or

(c) The holder has contravened any provision of this Act or any term of/or condition of the licence…,.; or

(d) The holder misrepresents the facilities he or she offers to the public; or

(e) The holder has become disqualified to hold a licence in terms of section thirty-nine; or

(f) The holder no longer meets any prescribed financial requirements for carrying on any activity authorised by the licence; or

(g) The holder, or any employee or agent of the holder, has been guilty of any act or omission in the conduct of the holder's business that has resulted or is likely to result in prejudice to members of the public; or …,.

(h) n/a; or

(i) n/a;

(2) Before cancelling a licence in terms of subsection (1), the Commission shall notify the holder, in writing, that it proposes to cancel the licence and of the Commission's reasons for proposing to do so and shall give the holder of the licence an adequate opportunity to make representations in the matter….,.

Provided that, if the Commission believes, on reasonable grounds, that it is not possible to notify the holder personally, the Commission shall publish a notice in the Gazette and a newspaper circulating in the area in which the holder carries or carried on business, stating that the licence will be cancelled unless the holder lodges an appeal with the Administrative Court in terms of section one hundred and eight within thirty days from the date of publication of the notice in the Gazette.

(3) The Commission shall not cancel a licence in terms of subsection (1) -

(a) Until -

(i) The period within which an appeal may be lodged in terms of section one hundred and eight has elapsed; or

(ii) The thirty day period referred to in the proviso to subsection (2) has elapsed, where a notice was published in terms of that proviso;

unless the holder has consented to its cancellation;

(b) If an appeal is lodged in terms of section one hundred and eight, until the appeal has been abandoned or withdrawn, or, where it has proceeded to finality, until the Commission is notified that its decision has been upheld.

(4)…,.”

One must look at the purpose and provisions of an Act in order to interpret the different sections forming that Act.

In construing the meaning of a section it is necessary to look at the Act generally to see what the scope of it is and whether the section accords with the scope and intention of the Act. It then becomes possible to draw a conclusion as to its meaning, considering the terms of the enactment.

The piecemeal approach advocated by the appellants does not accord with principles of construction of statutes.

In my view, it is impossible to know the intention of the legislature without enquiring further and ascertaining the context in which the Legislature intended to regulate.

In S v Fikizolo 1978 (2) SA 676, VAN RHYN J stated:

“It is a fundamental principle that the intention of the Legislature must be inferred from the words which the Legislature used, and, in Du Plessis v Joubert 1968 (1) SA 585 (A) at 595 BOTHA JA stated the following in this regard:

'Only a clear and indubitable, particular intention of the Legislature, and not merely an assumed intention can justify a departure from the usual meaning of words and then only if the words are amenable to another meaning.'”

Moreover, the whole piece of legislation must be examined to determine the intention of the Legislature. It is equally clear that one section can throw light on the intention of another section:-

“The correctness of the statement that the whole Act must be taken into account has been adopted so generally in our practice as to be a matter of course, that our courts have seldom found it necessary to stress this.” STEYN Die UITLEG van WETTE, 4th ed…,.

Stripped bare of the verbiage, the process of cancellation under section 105 of the Securities Exchange Act [Chapter 24:25] is preceded by an investigation of the licence holder. Any report from the investigation is availed to the licence holder for comment, and, in addition, the Securities Commission is obliged to call upon the holder to make representations to it before any sanction is imposed.

There is no provision for the suspension of a licence under section 48 of the Securities Exchange Act prior to its cancellation.

In fact, the provisions of section 48 do not contemplate a situation where the holder has been the subject of an investigation under section 49.

Where a licence is cancelled under section 48(1), such cancellation is made subject to the provisions of subsections (2) and (3) of section 48. Sub-section (2) enjoins the Securities Commission to notify the holder, in writing, that it proposes to cancel the licence; the reasons for proposing to do so; and, further to this, to afford the holder of the licence an adequate opportunity to make representations. In the event that the Commission believes, on reasonable grounds, that it is not possible to notify the holder personally, the Commission is permitted to publish a notice in the Gazette and a newspaper circulating in the area in which the licence resides or is situate, stating that the licence shall be cancelled unless the holder lodges an appeal with the Administrative Court in terms of section 108 of the Securities Exchange Act.

It cannot be gainsaid that all the actions by the Securities Commission, after receipt of the inspector's report, were consistent with the provisions of section 104.

All the appellants were availed the opportunities afforded to a registered person or a licence holder to be heard in terms of that section prior to the Commission taking any action subsequent to an investigation. None of the appellants have denied that the report was sent to them, that they were requested to make representations, or, further, that they appeared before the Commission before sanctions were imposed upon them on an individual basis.

The procedure adopted by the Securities Commission, in its dealings with the applicants, is more consistent with the provisions of section 105 as opposed to section 48 of the Securities Exchange Act.

The latter section envisages a situation where the licence holder is informed of the sanction that the Securities Commission intends to impose and to then avail the licensee an opportunity to make representations. 

Under section 105, the licensee is investigated and a report of the investigation is availed to the licence holder for comment. Over and above this, the licence holder is provided with an opportunity to be heard by the Commission....,.

The finding that the cancellation of the licences was effected in terms of section 105 of the Securities Exchange Act is correct and cannot be faulted. I find no basis for overturning the conclusion by the court in that regard.

Appeal, Leave to Appeal, Leave to Execute Pending Appeal re: Approach and the Right of Appeal


This is an appeal against a judgment of the Administrative Court by which the court dismissed the appeal to that court against a decision of the Securities Commission of Zimbabwe (“the Commission”) cancelling the licences of the first and second appellants and imposing sanctions upon the third and fourth appellants.

The first appellant, Remo Investment Brokers (Pvt) Ltd (“REMO”), is one of the longest established registered securities exchanges within Zimbabwe. The second appellant, Mahomed Iqbal Mahmed (“Mahmed”), is a securities dealer and is also the Managing Director of Remo Investment Brokers (Pvt) Ltd. The third appellant, Rezana Ebrahim (“Ebrahim”), is married to Mahomed Iqbal Mahmed and is a Compliance Officer for Remo Investment Brokers (Pvt) Ltd. She and Mahomed Iqbal Mahmed are the beneficial owners of Remo Investment Brokers (Pvt) Ltd. The fourth appellant, John Motsi (“Motsi”), is a Registered Securities Dealer.

Following upon turbulence within the securities sector, the Securities Commission of Zimbabwe suspended Remo Investment Brokers (Pvt) Ltd from trading for a period of six months. After the suspension of REMO, the Commission instituted investigations, through Proctor and Associates, who compiled a report. Armed with that report, the Commission charged REMO and Mahomed Iqbal Mahmed of contravening certain specified sections of the Securities Exchange Act [Chapter 24:25] (“the Act”).

The appellants were invited to make representations to the charges. Ultimately, the Securities Commission of Zimbabwe confirmed the convictions and cancelled the licences of Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed for a period of five years after which they could re-apply for registration. Rezana Ebrahim was advised by the Commission that she was permanently disapproved as a Compliance Officer. John Motsi was able to retain his Dealer's licence but was advised that he had to practise under a supervising senior broker for a period of one year.

Aggrieved by the decisions of the Securities Commission of Zimbabwe, the appellants collectively launched an appeal with the Administrative Court which dismissed the appeal and confirmed both the conviction and sanctions imposed by the Commission.

The appellants now appeal to this Court on several grounds.

Counsel for the Securities Commission of Zimbabwe took the point, in his heads of argument, that the grounds of appeal complain against every finding made by the court a quo. The grounds, which number thirteen, have been framed too widely. They are not clear and concise as required by the Rules of this Court.

Although the manner in which the grounds have been set out is not in itself fatal to the appeal, it would be neater to deal with the appeal on the basis of the substantive issues for resolution rather than the piece meal approach detailed within the grounds.

A preliminary point raised on the appellants' behalf was that the court a quo had erred in finding that the cancellation of the licences of Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed was effected in terms of section 105 of the Securities Exchange Act [Chapter 24:25]. In the alternative, it was argued that the court erred in failing to find that the cancellation of the said licences was premature regard being had to the provisions of section 48 as read with section 108 of the Securities Exchange Act [Chapter 24:25]. 

It was contended, further, that the court a quo had erred in any event in failing to find that, contrary to the provisions of section 105(2) of the Securities Exchange Act, the appellants had not been afforded an adequate opportunity to be heard. It was argued that they did not receive a fair hearing.

It was therefore contended that on this basis the appeal should succeed.

Before the Administrative Court, the appellants had similarly argued that the cancellation of the licences had been done in breach of the quoted sections. Per contra, the respondent contends that the licences for Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed were cancelled under section 105 of the Securities Exchange Act [Chapter 24:25].

The court a quo found that, in terms of section 48(3) of the Securities Exchange Act, the Securities Commission of Zimbabwe was not empowered to cancel a licence under section 48(1) until a period of thirty (30) days allowing for an appeal to the Administrative Court in terms of section 108 would have elapsed. The court, however, found that contrary to the contention of the appellants, the licences were cancelled in terms of section 105 of the Securities Exchange Act as opposed to section 48(1).

In the circumstances, the court a quo came to the conclusion that there had been no breach of section 48(3) and section 108 of the Securities Exchange Act on the part of the Securities Commission of Zimbabwe.

In my view, the dispute centres on the interpretation of sections 48, 49 and 105 of the Securities Exchange Act [Chapter 24:25].

The powers of the Securities Commission of Zimbabwe to cancel a licence are provided for in section 48 and section 105 of the Securities Exchange Act. It was section 105 which the court found to be the applicable section.

Section 105(1) of the Securities Exchange Act reads in relevant part:

“If, after considering an inspector's report sent to it in terms of subsection (1) of one hundred and four, together with any representations made by the person, committee or operator concerned in terms of subsection (3) of that section, the Commission is satisfied that the person, committee or operator as the case may be, has contravened any term or condition of his or her licence, registration or approved scheme, as the case may be, or any provision of this Act, or any direction, requirement or order made under this Act, the Commission may, subject to subsection (2), do any of one or more of the following -

…,.

(f) Direct the person, committee or operator to suspend all or any of his or her business;

…,.

(i) In the case of a licensed or registered person or entity, cancel the licence or registration or amend any of its terms and conditions.”

It is common cause that prior to launching an investigation into the activities of Remo Investment Brokers (Pvt) Ltd, the Securities Commission of Zimbabwe advised the former, in writing, that it intended to investigate the relationship between itself and Interfin Securities (Private) Limited (“Interfin”), and, further, that to facilitate such investigation, it was necessary to cause the suspension of Remo Investment Brokers (Pvt) Ltd.

The appellants have not challenged the propriety of the suspension.

The Securities Commission advised Remo Investment Brokers that the suspension was being effected in accordance with the provisions of section 49 of the Securities Exchange Act. The suspension was effected by a letter dated 29 March 2012, addressed to Mahomed Iqbal Mahmed in the following terms:

“An announcement was made at yesterday's trading session that your firm is suspended from trading on the Zimbabwe Stock Exchange with immediate effect.

A complaint was received from Remo Investment Brokers (Pvt) Ltd that Interfin Securities had mis-appropriated shares lodged as collateral in a loan transaction. The Zimbabwe Stock Exchange and Securities Commission of Zimbabwe have since had sight of Interfin Securities (Pvt) Ltd's response to the allegations.

Regrettably, there are serious inconsistencies in the submissions made by both parties so that it has been found necessary to suspend you from trading in terms of section 49 of the Securities Act in order to facilitate a full investigation. Amongst other issues, the enquiry will seek to establish the exact nature and terms of the transaction between two members of the Zimbabwe Stock Exchange involving such a material sum of money as well as the true beneficial owner of the shares lodged as collateral with yourselves.

The period of suspension is a maximum of 6 months but regular reviews will be carried out and you will be permitted to return to trading as soon as possible after satisfactory conclusion of the matter.

In the circumstances, we look forward to your full co-operation with the matter.”

Section 49 of the Securities Exchange Act, under which the licence was suspended, reads in relevant part:

49 Suspension of a licence

(1) Subject to subsection (6), if the Commission considers it necessary to suspend a licence -

(a) In order to facilitate an investigation into the holder's conduct; or

(b) Pending the determination of an appeal in terms of section one hundred and eight; or

(c)…,.

the Commission may, by notice in writing to the holder, suspend the licence wholly or partially in relation to all or any of the activities authorised by the licence.

(2) A suspension in terms of subsection (1) shall last for such period as the Commission may specify, but in no case shall it last for longer than six months.”

The position of the appellants is that once the Securities Commission suspended the licence in terms of section 49, it was only logical that any cancellation subsequent to such suspension be done in terms of section 48(1), and, that consequently, the provisions of section 48(3) would apply.

The argument advanced on behalf of the appellants is that once a licence is suspended under Part V of the Securities Exchange Act, specifically in terms of section 49, then it stands to reason that any cancellation of the licence can only be effected in terms of section 48 as it is also found in Part V of the Securities Exchange Act.

As I understand the argument, section 49 must be read together with section 48 of the Securities Exchange Act.

The letter of 29 March 2012 is specific as to the intention behind the suspension; that there was need to investigate the relationship between Remo Investment Brokers and Interfin Securities. The Securities Commission did not, in the letter, specify any alleged violation on the part of Remo Investment Brokers, and, the logical conclusion is that it was intended that the investigation would reveal if there was any wrongdoing on the part of Remo Investment Brokers and Interfin Securities in their mutual dealings.

The facts considered by the court a quo were the following;

After the suspension, the Securities Commission appointed Proctor and Associates to investigate the conduct of Remo Investment Brokers and Interfin Securities. This power is derived from section 103(1) of the Securities Exchange Act which empowers the Securities Commission to direct an inspector to conduct an investigation where:

“(e) The Commission has reasonable grounds for believing that a licensed person or board of a registered securities exchange or operator of a central securities depository, or any person connected with such a person, board or operator, has committed an offence under this Act, other than an offence arising out of conduct referred to in paragraph (a) or (b); or…,.”

Upon completion of an investigation, an inspector is required, in terms of section 104(1), to forward the report to the Securities Commission. On receipt of a report from the inspector, the Securities Commission is required, under section 104(2), to forward the report to the licensee and invite the licensee to make representations to it on the conclusions of the inspector and the recommendation.

On 7 May 2012, the Securities Commission sent a copy of the report from Proctor and Associates to Remo Investment Brokers and requested a written response within a period of thirty days. Remo Investment Brokers responded by a letter dated 8 May 2012.

Section 104(2) of the Securities Exchange Act [Chapter 24:25] provides in relevant part:

“On receipt of a report in terms of subs (1), the Commission shall -

(a) Send a summary of the conclusions reached in the report, and any recommendations made therein, to the licensed person, committee of the registered securities exchange, or operator of the central securities depository, as the case may be, that was the subject of the investigation; and

(b) Invite the committee, licensed person or operator concerned to make representations on the conclusions and recommendations set out in the summary.

3. A licensed person, committee of a registered securities exchange or operator of a central securities depository that has been sent a summary of conclusions and recommendations in terms of subsection (2) may, within thirty days, submit to the Commission representations on any of the conclusions or recommendations.”

On 23 May 2012, the Securities Commission advised all the appellants, in writing, that it intended to cancel the licences of the first two and impose sanctions on the last two, and, as a consequence, all the appellants were invited to appear before the Commission in person to make representations.

Subsequent to the letter of 23 May 2012, all the appellants appeared before the full Board of the Commission and made representations on the proposed action intended by the Commission against each of them. On 7 June 2012 the Commission proceeded to cancel the two licences and imposed the sanctions which are the subject of this appeal.

Having confirmed that the cancellations were effected under section 105 of the Securities Exchange Act, the court a quo also found that the cancellations were not done in a summary manner but after due consideration of a report presented to it by Proctor and Associates following upon an investigation into the activities of the appellants and Interfin Securities.

Section 48 of the Securities Exchange Act, on which the appellants hinge their appeal, reads:

48 Cancellation of licence

(1) Subject to subsections (2) and (3), the Commission may, by notice in writing to the holder, cancel a licence if the Commission has reasonable grounds for believing that…,.

(a) The holder has ceased to carry on business; or

(b) The licence was issued in error or through fraud or the misrepresentation of a material fact by the holder; or

(c) The holder has contravened any provision of this Act or any term of/or condition of the licence…,.; or

(d) The holder misrepresents the facilities he or she offers to the public; or

(e) The holder has become disqualified to hold a licence in terms of section thirty-nine; or

(f) The holder no longer meets any prescribed financial requirements for carrying on any activity authorised by the licence; or

(g) The holder, or any employee or agent of the holder, has been guilty of any act or omission in the conduct of the holder's business that has resulted or is likely to result in prejudice to members of the public; or …,.

(h) n/a; or

(i) n/a;

(2) Before cancelling a licence in terms of subsection (1), the Commission shall notify the holder, in writing, that it proposes to cancel the licence and of the Commission's reasons for proposing to do so and shall give the holder of the licence an adequate opportunity to make representations in the matter….,.

Provided that, if the Commission believes, on reasonable grounds, that it is not possible to notify the holder personally, the Commission shall publish a notice in the Gazette and a newspaper circulating in the area in which the holder carries or carried on business, stating that the licence will be cancelled unless the holder lodges an appeal with the Administrative Court in terms of section one hundred and eight within thirty days from the date of publication of the notice in the Gazette.

(3) The Commission shall not cancel a licence in terms of subsection (1) -

(a) Until -

(i) The period within which an appeal may be lodged in terms of section one hundred and eight has elapsed; or

(ii) The thirty day period referred to in the proviso to subsection (2) has elapsed, where a notice was published in terms of that proviso;

unless the holder has consented to its cancellation;

(b) If an appeal is lodged in terms of section one hundred and eight, until the appeal has been abandoned or withdrawn, or, where it has proceeded to finality, until the Commission is notified that its decision has been upheld.

(4)…,.”

One must look at the purpose and provisions of an Act in order to interpret the different sections forming that Act.

In construing the meaning of a section it is necessary to look at the Act generally to see what the scope of it is and whether the section accords with the scope and intention of the Act. It then becomes possible to draw a conclusion as to its meaning, considering the terms of the enactment.

The piecemeal approach advocated by the appellants does not accord with principles of construction of statutes.

In my view, it is impossible to know the intention of the legislature without enquiring further and ascertaining the context in which the Legislature intended to regulate.

In S v Fikizolo 1978 (2) SA 676, VAN RHYN J stated:

“It is a fundamental principle that the intention of the Legislature must be inferred from the words which the Legislature used, and, in Du Plessis v Joubert 1968 (1) SA 585 (A) at 595 BOTHA JA stated the following in this regard:

'Only a clear and indubitable, particular intention of the Legislature, and not merely an assumed intention can justify a departure from the usual meaning of words and then only if the words are amenable to another meaning.'”

Moreover, the whole piece of legislation must be examined to determine the intention of the Legislature. It is equally clear that one section can throw light on the intention of another section:-

“The correctness of the statement that the whole Act must be taken into account has been adopted so generally in our practice as to be a matter of course, that our courts have seldom found it necessary to stress this.” STEYN Die UITLEG van WETTE, 4th ed…,.

Stripped bare of the verbiage, the process of cancellation under section 105 of the Securities Exchange Act [Chapter 24:25] is preceded by an investigation of the licence holder. Any report from the investigation is availed to the licence holder for comment, and, in addition, the Securities Commission is obliged to call upon the holder to make representations to it before any sanction is imposed.

There is no provision for the suspension of a licence under section 48 of the Securities Exchange Act prior to its cancellation.

In fact, the provisions of section 48 do not contemplate a situation where the holder has been the subject of an investigation under section 49.

Where a licence is cancelled under section 48(1), such cancellation is made subject to the provisions of subsections (2) and (3) of section 48. Sub-section (2) enjoins the Securities Commission to notify the holder, in writing, that it proposes to cancel the licence; the reasons for proposing to do so; and, further to this, to afford the holder of the licence an adequate opportunity to make representations. In the event that the Commission believes, on reasonable grounds, that it is not possible to notify the holder personally, the Commission is permitted to publish a notice in the Gazette and a newspaper circulating in the area in which the licence resides or is situate, stating that the licence shall be cancelled unless the holder lodges an appeal with the Administrative Court in terms of section 108 of the Securities Exchange Act.

It cannot be gainsaid that all the actions by the Securities Commission, after receipt of the inspector's report, were consistent with the provisions of section 104.

All the appellants were availed the opportunities afforded to a registered person or a licence holder to be heard in terms of that section prior to the Commission taking any action subsequent to an investigation. None of the appellants have denied that the report was sent to them, that they were requested to make representations, or, further, that they appeared before the Commission before sanctions were imposed upon them on an individual basis.

The procedure adopted by the Securities Commission, in its dealings with the applicants, is more consistent with the provisions of section 105 as opposed to section 48 of the Securities Exchange Act.

The latter section envisages a situation where the licence holder is informed of the sanction that the Securities Commission intends to impose and to then avail the licensee an opportunity to make representations. 

Under section 105, the licensee is investigated and a report of the investigation is availed to the licence holder for comment. Over and above this, the licence holder is provided with an opportunity to be heard by the Commission.

As a consequence, the requirement in section 48(3), obliging the Securities Commission not to cancel a licence until the opportunity given to appeal to the Administrative Court becomes obvious.

Unlike the procedure provided for under section 105, a cancellation effected under section 48 is summary and the licensee is not assured of an opportunity to make representation before the cancellation. Thus, there is need for the cancellation not to be effected before the appeal process provided for under section 108 has been exhausted.

There is no such requirement under section 105.

It is also pertinent to note that under section 105, the Securities Commission is given the discretion to impose a sanction before affording the holder an opportunity to make representations if it considers that immediate action is necessary to prevent harm to the licensed person, its employees, agents, other securities, or members of the public.

In this case, all the appellants were afforded an opportunity to make representations before the cancellations were put into effect and the sanctions on the last two were imposed.

In proceeding under this section, the Securities Commission is not required to have regard to the provisions of section 48(3). The distinction is obvious. However, any powers exercised by the Commission under section 105(1) are made subject to subsection (2) of the same section which provides:

“Before taking any action referred to in subsection (1), the Commission shall -

(a) Inform the person, committee or operator concerned, in writing, of the action it proposes to take; and

(b) Afford the person, committee or operator concerned an adequate opportunity to make representations in the matter;

Provided that, where the Commission considers that immediate action is necessary to prevent irreparable harm to the licensed person, registered securities exchange or central depository or its members, creditors or participants, the Commission may take such action before affording the person, committee or operator an opportunity to make representations in terms of this subsection.”

In this Court, the appellants submitted that the Securities Commission had, contrary to the provisions of section 105(2) of the Securities Exchange Act [Chapter 24:25], not provided them an adequate opportunity to make representations as to why the licences of Remo Investment Brokers and Mahomed Iqbal Mahmed should not be cancelled.

Their contention, that the learned President in the court a quo did not address that issue, has substance.

It is trite that an appeal to the Administrative Court is an appeal in the wide sense.

The appellants could have, if they had chosen to do so, led evidence before that court in order to ensure that whatever irregularities the Securities Commission may have been guilty of were corrected.

They did not avail themselves of that opportunity.

In Watchtower Bible & Tract Society of Pennsylvania & Anor v Drum Investments (Private) Limited & Anor 1993 (2) ZLR 67 (S), GUBBAY CJ, remarked as follows…,:

“I am satisfied that the appeal from the decision of the Rural Council to the Administrative Court is an appeal in the first sense above, an appeal in the wide sense. I accept the comment of the court in the Jones case supra that we are dealing with 'not so much a re-hearing as the first full inquiry'. But that comment does not take the case out of the category; it puts it more firmly in it.

The main reasons why the appeal falls into the wide category are that the Act, in providing for the appeal, authorises the Administrative Court to 'make such order as it deems fit' (section 39(1) of Act 22 of 1976), and that evidence is, for the first time, led and examined in accordance with the rules of a court of law.

I do not think it is possible to argue that even though this is a category one appeal, an appeal in the wide sense, the onus may nevertheless be on the objector. The whole point of the formulation which I have set out is that the appellate tribunal (in this case the Administrative Court) is starting again. It is deciding afresh the merits of the application, not the merits of the Rural Council's decision. The formulation makes sense only if one accepts that the onus is where it was in the original application.”

A failure to deal with an issue that has been placed before a court constitutes a misdirection.

However, this Court is in as good a position as the court a quo to determine the point raised by the appellants.

Appeal re: Leave to Lead Further Evidence iro Appeals in the Wide and Narrow Sense & Principle of Finality to Litigation


This is an appeal against a judgment of the Administrative Court by which the court dismissed the appeal to that court against a decision of the Securities Commission of Zimbabwe (“the Commission”) cancelling the licences of the first and second appellants and imposing sanctions upon the third and fourth appellants.

The first appellant, Remo Investment Brokers (Pvt) Ltd (“REMO”), is one of the longest established registered securities exchanges within Zimbabwe. The second appellant, Mahomed Iqbal Mahmed (“Mahmed”), is a securities dealer and is also the Managing Director of Remo Investment Brokers (Pvt) Ltd. The third appellant, Rezana Ebrahim (“Ebrahim”), is married to Mahomed Iqbal Mahmed and is a Compliance Officer for Remo Investment Brokers (Pvt) Ltd. She and Mahomed Iqbal Mahmed are the beneficial owners of Remo Investment Brokers (Pvt) Ltd. The fourth appellant, John Motsi (“Motsi”), is a Registered Securities Dealer.

Following upon turbulence within the securities sector, the Securities Commission of Zimbabwe suspended Remo Investment Brokers (Pvt) Ltd from trading for a period of six months. After the suspension of REMO, the Commission instituted investigations, through Proctor and Associates, who compiled a report. Armed with that report, the Commission charged REMO and Mahomed Iqbal Mahmed of contravening certain specified sections of the Securities Exchange Act [Chapter 24:25] (“the Act”).

The appellants were invited to make representations to the charges. Ultimately, the Securities Commission of Zimbabwe confirmed the convictions and cancelled the licences of Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed for a period of five years after which they could re-apply for registration. Rezana Ebrahim was advised by the Commission that she was permanently disapproved as a Compliance Officer. John Motsi was able to retain his Dealer's licence but was advised that he had to practise under a supervising senior broker for a period of one year.

Aggrieved by the decisions of the Securities Commission of Zimbabwe, the appellants collectively launched an appeal with the Administrative Court which dismissed the appeal and confirmed both the conviction and sanctions imposed by the Commission.

The appellants now appeal to this Court on several grounds.

Counsel for the Securities Commission of Zimbabwe took the point, in his heads of argument, that the grounds of appeal complain against every finding made by the court a quo. The grounds, which number thirteen, have been framed too widely. They are not clear and concise as required by the Rules of this Court.

Although the manner in which the grounds have been set out is not in itself fatal to the appeal, it would be neater to deal with the appeal on the basis of the substantive issues for resolution rather than the piece meal approach detailed within the grounds.

A preliminary point raised on the appellants' behalf was that the court a quo had erred in finding that the cancellation of the licences of Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed was effected in terms of section 105 of the Securities Exchange Act [Chapter 24:25]. In the alternative, it was argued that the court erred in failing to find that the cancellation of the said licences was premature regard being had to the provisions of section 48 as read with section 108 of the Securities Exchange Act [Chapter 24:25]. 

It was contended, further, that the court a quo had erred in any event in failing to find that, contrary to the provisions of section 105(2) of the Securities Exchange Act, the appellants had not been afforded an adequate opportunity to be heard. It was argued that they did not receive a fair hearing.

It was therefore contended that on this basis the appeal should succeed.

Before the Administrative Court, the appellants had similarly argued that the cancellation of the licences had been done in breach of the quoted sections. Per contra, the respondent contends that the licences for Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed were cancelled under section 105 of the Securities Exchange Act [Chapter 24:25].

The court a quo found that, in terms of section 48(3) of the Securities Exchange Act, the Securities Commission of Zimbabwe was not empowered to cancel a licence under section 48(1) until a period of thirty (30) days allowing for an appeal to the Administrative Court in terms of section 108 would have elapsed. The court, however, found that contrary to the contention of the appellants, the licences were cancelled in terms of section 105 of the Securities Exchange Act as opposed to section 48(1).

In the circumstances, the court a quo came to the conclusion that there had been no breach of section 48(3) and section 108 of the Securities Exchange Act on the part of the Securities Commission of Zimbabwe.

In my view, the dispute centres on the interpretation of sections 48, 49 and 105 of the Securities Exchange Act [Chapter 24:25].

The powers of the Securities Commission of Zimbabwe to cancel a licence are provided for in section 48 and section 105 of the Securities Exchange Act. It was section 105 which the court found to be the applicable section.

Section 105(1) of the Securities Exchange Act reads in relevant part:

“If, after considering an inspector's report sent to it in terms of subsection (1) of one hundred and four, together with any representations made by the person, committee or operator concerned in terms of subsection (3) of that section, the Commission is satisfied that the person, committee or operator as the case may be, has contravened any term or condition of his or her licence, registration or approved scheme, as the case may be, or any provision of this Act, or any direction, requirement or order made under this Act, the Commission may, subject to subsection (2), do any of one or more of the following -

…,.

(f) Direct the person, committee or operator to suspend all or any of his or her business;

…,.

(i) In the case of a licensed or registered person or entity, cancel the licence or registration or amend any of its terms and conditions.”

It is common cause that prior to launching an investigation into the activities of Remo Investment Brokers (Pvt) Ltd, the Securities Commission of Zimbabwe advised the former, in writing, that it intended to investigate the relationship between itself and Interfin Securities (Private) Limited (“Interfin”), and, further, that to facilitate such investigation, it was necessary to cause the suspension of Remo Investment Brokers (Pvt) Ltd.

The appellants have not challenged the propriety of the suspension.

The Securities Commission advised Remo Investment Brokers that the suspension was being effected in accordance with the provisions of section 49 of the Securities Exchange Act. The suspension was effected by a letter dated 29 March 2012, addressed to Mahomed Iqbal Mahmed in the following terms:

“An announcement was made at yesterday's trading session that your firm is suspended from trading on the Zimbabwe Stock Exchange with immediate effect.

A complaint was received from Remo Investment Brokers (Pvt) Ltd that Interfin Securities had mis-appropriated shares lodged as collateral in a loan transaction. The Zimbabwe Stock Exchange and Securities Commission of Zimbabwe have since had sight of Interfin Securities (Pvt) Ltd's response to the allegations.

Regrettably, there are serious inconsistencies in the submissions made by both parties so that it has been found necessary to suspend you from trading in terms of section 49 of the Securities Act in order to facilitate a full investigation. Amongst other issues, the enquiry will seek to establish the exact nature and terms of the transaction between two members of the Zimbabwe Stock Exchange involving such a material sum of money as well as the true beneficial owner of the shares lodged as collateral with yourselves.

The period of suspension is a maximum of 6 months but regular reviews will be carried out and you will be permitted to return to trading as soon as possible after satisfactory conclusion of the matter.

In the circumstances, we look forward to your full co-operation with the matter.”

Section 49 of the Securities Exchange Act, under which the licence was suspended, reads in relevant part:

49 Suspension of a licence

(1) Subject to subsection (6), if the Commission considers it necessary to suspend a licence -

(a) In order to facilitate an investigation into the holder's conduct; or

(b) Pending the determination of an appeal in terms of section one hundred and eight; or

(c)…,.

the Commission may, by notice in writing to the holder, suspend the licence wholly or partially in relation to all or any of the activities authorised by the licence.

(2) A suspension in terms of subsection (1) shall last for such period as the Commission may specify, but in no case shall it last for longer than six months.”

The position of the appellants is that once the Securities Commission suspended the licence in terms of section 49, it was only logical that any cancellation subsequent to such suspension be done in terms of section 48(1), and, that consequently, the provisions of section 48(3) would apply.

The argument advanced on behalf of the appellants is that once a licence is suspended under Part V of the Securities Exchange Act, specifically in terms of section 49, then it stands to reason that any cancellation of the licence can only be effected in terms of section 48 as it is also found in Part V of the Securities Exchange Act.

As I understand the argument, section 49 must be read together with section 48 of the Securities Exchange Act.

The letter of 29 March 2012 is specific as to the intention behind the suspension; that there was need to investigate the relationship between Remo Investment Brokers and Interfin Securities. The Securities Commission did not, in the letter, specify any alleged violation on the part of Remo Investment Brokers, and, the logical conclusion is that it was intended that the investigation would reveal if there was any wrongdoing on the part of Remo Investment Brokers and Interfin Securities in their mutual dealings.

The facts considered by the court a quo were the following;

After the suspension, the Securities Commission appointed Proctor and Associates to investigate the conduct of Remo Investment Brokers and Interfin Securities. This power is derived from section 103(1) of the Securities Exchange Act which empowers the Securities Commission to direct an inspector to conduct an investigation where:

“(e) The Commission has reasonable grounds for believing that a licensed person or board of a registered securities exchange or operator of a central securities depository, or any person connected with such a person, board or operator, has committed an offence under this Act, other than an offence arising out of conduct referred to in paragraph (a) or (b); or…,.”

Upon completion of an investigation, an inspector is required, in terms of section 104(1), to forward the report to the Securities Commission. On receipt of a report from the inspector, the Securities Commission is required, under section 104(2), to forward the report to the licensee and invite the licensee to make representations to it on the conclusions of the inspector and the recommendation.

On 7 May 2012, the Securities Commission sent a copy of the report from Proctor and Associates to Remo Investment Brokers and requested a written response within a period of thirty days. Remo Investment Brokers responded by a letter dated 8 May 2012.

Section 104(2) of the Securities Exchange Act [Chapter 24:25] provides in relevant part:

“On receipt of a report in terms of subs (1), the Commission shall -

(a) Send a summary of the conclusions reached in the report, and any recommendations made therein, to the licensed person, committee of the registered securities exchange, or operator of the central securities depository, as the case may be, that was the subject of the investigation; and

(b) Invite the committee, licensed person or operator concerned to make representations on the conclusions and recommendations set out in the summary.

3. A licensed person, committee of a registered securities exchange or operator of a central securities depository that has been sent a summary of conclusions and recommendations in terms of subsection (2) may, within thirty days, submit to the Commission representations on any of the conclusions or recommendations.”

On 23 May 2012, the Securities Commission advised all the appellants, in writing, that it intended to cancel the licences of the first two and impose sanctions on the last two, and, as a consequence, all the appellants were invited to appear before the Commission in person to make representations.

Subsequent to the letter of 23 May 2012, all the appellants appeared before the full Board of the Commission and made representations on the proposed action intended by the Commission against each of them. On 7 June 2012 the Commission proceeded to cancel the two licences and imposed the sanctions which are the subject of this appeal.

Having confirmed that the cancellations were effected under section 105 of the Securities Exchange Act, the court a quo also found that the cancellations were not done in a summary manner but after due consideration of a report presented to it by Proctor and Associates following upon an investigation into the activities of the appellants and Interfin Securities.

Section 48 of the Securities Exchange Act, on which the appellants hinge their appeal, reads:

48 Cancellation of licence

(1) Subject to subsections (2) and (3), the Commission may, by notice in writing to the holder, cancel a licence if the Commission has reasonable grounds for believing that…,.

(a) The holder has ceased to carry on business; or

(b) The licence was issued in error or through fraud or the misrepresentation of a material fact by the holder; or

(c) The holder has contravened any provision of this Act or any term of/or condition of the licence…,.; or

(d) The holder misrepresents the facilities he or she offers to the public; or

(e) The holder has become disqualified to hold a licence in terms of section thirty-nine; or

(f) The holder no longer meets any prescribed financial requirements for carrying on any activity authorised by the licence; or

(g) The holder, or any employee or agent of the holder, has been guilty of any act or omission in the conduct of the holder's business that has resulted or is likely to result in prejudice to members of the public; or …,.

(h) n/a; or

(i) n/a;

(2) Before cancelling a licence in terms of subsection (1), the Commission shall notify the holder, in writing, that it proposes to cancel the licence and of the Commission's reasons for proposing to do so and shall give the holder of the licence an adequate opportunity to make representations in the matter….,.

Provided that, if the Commission believes, on reasonable grounds, that it is not possible to notify the holder personally, the Commission shall publish a notice in the Gazette and a newspaper circulating in the area in which the holder carries or carried on business, stating that the licence will be cancelled unless the holder lodges an appeal with the Administrative Court in terms of section one hundred and eight within thirty days from the date of publication of the notice in the Gazette.

(3) The Commission shall not cancel a licence in terms of subsection (1) -

(a) Until -

(i) The period within which an appeal may be lodged in terms of section one hundred and eight has elapsed; or

(ii) The thirty day period referred to in the proviso to subsection (2) has elapsed, where a notice was published in terms of that proviso;

unless the holder has consented to its cancellation;

(b) If an appeal is lodged in terms of section one hundred and eight, until the appeal has been abandoned or withdrawn, or, where it has proceeded to finality, until the Commission is notified that its decision has been upheld.

(4)…,.”

One must look at the purpose and provisions of an Act in order to interpret the different sections forming that Act.

In construing the meaning of a section it is necessary to look at the Act generally to see what the scope of it is and whether the section accords with the scope and intention of the Act. It then becomes possible to draw a conclusion as to its meaning, considering the terms of the enactment.

The piecemeal approach advocated by the appellants does not accord with principles of construction of statutes.

In my view, it is impossible to know the intention of the legislature without enquiring further and ascertaining the context in which the Legislature intended to regulate.

In S v Fikizolo 1978 (2) SA 676, VAN RHYN J stated:

“It is a fundamental principle that the intention of the Legislature must be inferred from the words which the Legislature used, and, in Du Plessis v Joubert 1968 (1) SA 585 (A) at 595 BOTHA JA stated the following in this regard:

'Only a clear and indubitable, particular intention of the Legislature, and not merely an assumed intention can justify a departure from the usual meaning of words and then only if the words are amenable to another meaning.'”

Moreover, the whole piece of legislation must be examined to determine the intention of the Legislature. It is equally clear that one section can throw light on the intention of another section:-

“The correctness of the statement that the whole Act must be taken into account has been adopted so generally in our practice as to be a matter of course, that our courts have seldom found it necessary to stress this.” STEYN Die UITLEG van WETTE, 4th ed…,.

Stripped bare of the verbiage, the process of cancellation under section 105 of the Securities Exchange Act [Chapter 24:25] is preceded by an investigation of the licence holder. Any report from the investigation is availed to the licence holder for comment, and, in addition, the Securities Commission is obliged to call upon the holder to make representations to it before any sanction is imposed.

There is no provision for the suspension of a licence under section 48 of the Securities Exchange Act prior to its cancellation.

In fact, the provisions of section 48 do not contemplate a situation where the holder has been the subject of an investigation under section 49.

Where a licence is cancelled under section 48(1), such cancellation is made subject to the provisions of subsections (2) and (3) of section 48. Sub-section (2) enjoins the Securities Commission to notify the holder, in writing, that it proposes to cancel the licence; the reasons for proposing to do so; and, further to this, to afford the holder of the licence an adequate opportunity to make representations. In the event that the Commission believes, on reasonable grounds, that it is not possible to notify the holder personally, the Commission is permitted to publish a notice in the Gazette and a newspaper circulating in the area in which the licence resides or is situate, stating that the licence shall be cancelled unless the holder lodges an appeal with the Administrative Court in terms of section 108 of the Securities Exchange Act.

It cannot be gainsaid that all the actions by the Securities Commission, after receipt of the inspector's report, were consistent with the provisions of section 104.

All the appellants were availed the opportunities afforded to a registered person or a licence holder to be heard in terms of that section prior to the Commission taking any action subsequent to an investigation. None of the appellants have denied that the report was sent to them, that they were requested to make representations, or, further, that they appeared before the Commission before sanctions were imposed upon them on an individual basis.

The procedure adopted by the Securities Commission, in its dealings with the applicants, is more consistent with the provisions of section 105 as opposed to section 48 of the Securities Exchange Act.

The latter section envisages a situation where the licence holder is informed of the sanction that the Securities Commission intends to impose and to then avail the licensee an opportunity to make representations. 

Under section 105, the licensee is investigated and a report of the investigation is availed to the licence holder for comment. Over and above this, the licence holder is provided with an opportunity to be heard by the Commission.

As a consequence, the requirement in section 48(3), obliging the Securities Commission not to cancel a licence until the opportunity given to appeal to the Administrative Court becomes obvious.

Unlike the procedure provided for under section 105, a cancellation effected under section 48 is summary and the licensee is not assured of an opportunity to make representation before the cancellation. Thus, there is need for the cancellation not to be effected before the appeal process provided for under section 108 has been exhausted.

There is no such requirement under section 105.

It is also pertinent to note that under section 105, the Securities Commission is given the discretion to impose a sanction before affording the holder an opportunity to make representations if it considers that immediate action is necessary to prevent harm to the licensed person, its employees, agents, other securities, or members of the public.

In this case, all the appellants were afforded an opportunity to make representations before the cancellations were put into effect and the sanctions on the last two were imposed.

In proceeding under this section, the Securities Commission is not required to have regard to the provisions of section 48(3). The distinction is obvious. However, any powers exercised by the Commission under section 105(1) are made subject to subsection (2) of the same section which provides: 

“Before taking any action referred to in subsection (1), the Commission shall -

(a) Inform the person, committee or operator concerned, in writing, of the action it proposes to take; and

(b) Afford the person, committee or operator concerned an adequate opportunity to make representations in the matter;

Provided that, where the Commission considers that immediate action is necessary to prevent irreparable harm to the licensed person, registered securities exchange or central depository or its members, creditors or participants, the Commission may take such action before affording the person, committee or operator an opportunity to make representations in terms of this subsection.”

In this Court, the appellants submitted that the Securities Commission had, contrary to the provisions of section 105(2) of the Securities Exchange Act [Chapter 24:25], not provided them an adequate opportunity to make representations as to why the licences of Remo Investment Brokers and Mahomed Iqbal Mahmed should not be cancelled. 

Their contention, that the learned President in the court a quo did not address that issue, has substance.

It is trite that an appeal to the Administrative Court is an appeal in the wide sense.

The appellants could have, if they had chosen to do so, led evidence before that court in order to ensure that whatever irregularities the Securities Commission may have been guilty of were corrected. 

They did not avail themselves of that opportunity.

In Watchtower Bible & Tract Society of Pennsylvania & Anor v Drum Investments (Private) Limited & Anor 1993 (2) ZLR 67 (S), GUBBAY CJ, remarked as follows…,:

“I am satisfied that the appeal from the decision of the Rural Council to the Administrative Court is an appeal in the first sense above, an appeal in the wide sense. I accept the comment of the court in the Jones case supra that we are dealing with 'not so much a re-hearing as the first full inquiry'. But that comment does not take the case out of the category; it puts it more firmly in it.

The main reasons why the appeal falls into the wide category are that the Act, in providing for the appeal, authorises the Administrative Court to 'make such order as it deems fit' (section 39(1) of Act 22 of 1976), and that evidence is, for the first time, led and examined in accordance with the rules of a court of law.

I do not think it is possible to argue that even though this is a category one appeal, an appeal in the wide sense, the onus may nevertheless be on the objector. The whole point of the formulation which I have set out is that the appellate tribunal (in this case the Administrative Court) is starting again. It is deciding afresh the merits of the application, not the merits of the Rural Council's decision. The formulation makes sense only if one accepts that the onus is where it was in the original application.”

A failure to deal with an issue that has been placed before a court constitutes a misdirection.

However, this Court is in as good a position as the court a quo to determine the point raised by the appellants.

Final Orders re: Approach iro Functions, Powers, Obligations, Judicial Misdirections and Effect of Court Orders


A failure to deal with an issue that has been placed before a court constitutes a misdirection.

Audi Alteram Partem Rule re: Approach, Orders Granted Without a Hearing and the Doctrine of Notice


This is an appeal against a judgment of the Administrative Court by which the court dismissed the appeal to that court against a decision of the Securities Commission of Zimbabwe (“the Commission”) cancelling the licences of the first and second appellants and imposing sanctions upon the third and fourth appellants.

The first appellant, Remo Investment Brokers (Pvt) Ltd (“REMO”), is one of the longest established registered securities exchanges within Zimbabwe. The second appellant, Mahomed Iqbal Mahmed (“Mahmed”), is a securities dealer and is also the Managing Director of Remo Investment Brokers (Pvt) Ltd. The third appellant, Rezana Ebrahim (“Ebrahim”), is married to Mahomed Iqbal Mahmed and is a Compliance Officer for Remo Investment Brokers (Pvt) Ltd. She and Mahomed Iqbal Mahmed are the beneficial owners of Remo Investment Brokers (Pvt) Ltd. The fourth appellant, John Motsi (“Motsi”), is a Registered Securities Dealer.

Following upon turbulence within the securities sector, the Securities Commission of Zimbabwe suspended Remo Investment Brokers (Pvt) Ltd from trading for a period of six months. After the suspension of REMO, the Commission instituted investigations, through Proctor and Associates, who compiled a report. Armed with that report, the Commission charged REMO and Mahomed Iqbal Mahmed of contravening certain specified sections of the Securities Exchange Act [Chapter 24:25] (“the Act”).

The appellants were invited to make representations to the charges. Ultimately, the Securities Commission of Zimbabwe confirmed the convictions and cancelled the licences of Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed for a period of five years after which they could re-apply for registration. Rezana Ebrahim was advised by the Commission that she was permanently disapproved as a Compliance Officer. John Motsi was able to retain his Dealer's licence but was advised that he had to practise under a supervising senior broker for a period of one year.

Aggrieved by the decisions of the Securities Commission of Zimbabwe, the appellants collectively launched an appeal with the Administrative Court which dismissed the appeal and confirmed both the conviction and sanctions imposed by the Commission.

The appellants now appeal to this Court on several grounds.

Counsel for the Securities Commission of Zimbabwe took the point, in his heads of argument, that the grounds of appeal complain against every finding made by the court a quo. The grounds, which number thirteen, have been framed too widely. They are not clear and concise as required by the Rules of this Court.

Although the manner in which the grounds have been set out is not in itself fatal to the appeal, it would be neater to deal with the appeal on the basis of the substantive issues for resolution rather than the piece meal approach detailed within the grounds.

A preliminary point raised on the appellants' behalf was that the court a quo had erred in finding that the cancellation of the licences of Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed was effected in terms of section 105 of the Securities Exchange Act [Chapter 24:25]. In the alternative, it was argued that the court erred in failing to find that the cancellation of the said licences was premature regard being had to the provisions of section 48 as read with section 108 of the Securities Exchange Act [Chapter 24:25].

It was contended, further, that the court a quo had erred in any event in failing to find that, contrary to the provisions of section 105(2) of the Securities Exchange Act, the appellants had not been afforded an adequate opportunity to be heard. It was argued that they did not receive a fair hearing.

It was therefore contended that on this basis the appeal should succeed.

Before the Administrative Court, the appellants had similarly argued that the cancellation of the licences had been done in breach of the quoted sections. Per contra, the respondent contends that the licences for Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed were cancelled under section 105 of the Securities Exchange Act [Chapter 24:25].

The court a quo found that, in terms of section 48(3) of the Securities Exchange Act, the Securities Commission of Zimbabwe was not empowered to cancel a licence under section 48(1) until a period of thirty (30) days allowing for an appeal to the Administrative Court in terms of section 108 would have elapsed. The court, however, found that contrary to the contention of the appellants, the licences were cancelled in terms of section 105 of the Securities Exchange Act as opposed to section 48(1).

In the circumstances, the court a quo came to the conclusion that there had been no breach of section 48(3) and section 108 of the Securities Exchange Act on the part of the Securities Commission of Zimbabwe.

In my view, the dispute centres on the interpretation of sections 48, 49 and 105 of the Securities Exchange Act [Chapter 24:25].

The powers of the Securities Commission of Zimbabwe to cancel a licence are provided for in section 48 and section 105 of the Securities Exchange Act. It was section 105 which the court found to be the applicable section.

Section 105(1) of the Securities Exchange Act reads in relevant part:

“If, after considering an inspector's report sent to it in terms of subsection (1) of one hundred and four, together with any representations made by the person, committee or operator concerned in terms of subsection (3) of that section, the Commission is satisfied that the person, committee or operator as the case may be, has contravened any term or condition of his or her licence, registration or approved scheme, as the case may be, or any provision of this Act, or any direction, requirement or order made under this Act, the Commission may, subject to subsection (2), do any of one or more of the following -

…,.

(f) Direct the person, committee or operator to suspend all or any of his or her business;

…,.

(i) In the case of a licensed or registered person or entity, cancel the licence or registration or amend any of its terms and conditions.”

It is common cause that prior to launching an investigation into the activities of Remo Investment Brokers (Pvt) Ltd, the Securities Commission of Zimbabwe advised the former, in writing, that it intended to investigate the relationship between itself and Interfin Securities (Private) Limited (“Interfin”), and, further, that to facilitate such investigation, it was necessary to cause the suspension of Remo Investment Brokers (Pvt) Ltd.

The appellants have not challenged the propriety of the suspension.

The Securities Commission advised Remo Investment Brokers that the suspension was being effected in accordance with the provisions of section 49 of the Securities Exchange Act. The suspension was effected by a letter dated 29 March 2012, addressed to Mahomed Iqbal Mahmed in the following terms:

“An announcement was made at yesterday's trading session that your firm is suspended from trading on the Zimbabwe Stock Exchange with immediate effect.

A complaint was received from Remo Investment Brokers (Pvt) Ltd that Interfin Securities had mis-appropriated shares lodged as collateral in a loan transaction. The Zimbabwe Stock Exchange and Securities Commission of Zimbabwe have since had sight of Interfin Securities (Pvt) Ltd's response to the allegations.

Regrettably, there are serious inconsistencies in the submissions made by both parties so that it has been found necessary to suspend you from trading in terms of section 49 of the Securities Act in order to facilitate a full investigation. Amongst other issues, the enquiry will seek to establish the exact nature and terms of the transaction between two members of the Zimbabwe Stock Exchange involving such a material sum of money as well as the true beneficial owner of the shares lodged as collateral with yourselves.

The period of suspension is a maximum of 6 months but regular reviews will be carried out and you will be permitted to return to trading as soon as possible after satisfactory conclusion of the matter.

In the circumstances, we look forward to your full co-operation with the matter.”

Section 49 of the Securities Exchange Act, under which the licence was suspended, reads in relevant part:

49 Suspension of a licence

(1) Subject to subsection (6), if the Commission considers it necessary to suspend a licence -

(a) In order to facilitate an investigation into the holder's conduct; or

(b) Pending the determination of an appeal in terms of section one hundred and eight; or

(c)…,.

the Commission may, by notice in writing to the holder, suspend the licence wholly or partially in relation to all or any of the activities authorised by the licence.

(2) A suspension in terms of subsection (1) shall last for such period as the Commission may specify, but in no case shall it last for longer than six months.”

The position of the appellants is that once the Securities Commission suspended the licence in terms of section 49, it was only logical that any cancellation subsequent to such suspension be done in terms of section 48(1), and, that consequently, the provisions of section 48(3) would apply.

The argument advanced on behalf of the appellants is that once a licence is suspended under Part V of the Securities Exchange Act, specifically in terms of section 49, then it stands to reason that any cancellation of the licence can only be effected in terms of section 48 as it is also found in Part V of the Securities Exchange Act.

As I understand the argument, section 49 must be read together with section 48 of the Securities Exchange Act.

The letter of 29 March 2012 is specific as to the intention behind the suspension; that there was need to investigate the relationship between Remo Investment Brokers and Interfin Securities. The Securities Commission did not, in the letter, specify any alleged violation on the part of Remo Investment Brokers, and, the logical conclusion is that it was intended that the investigation would reveal if there was any wrongdoing on the part of Remo Investment Brokers and Interfin Securities in their mutual dealings.

The facts considered by the court a quo were the following;

After the suspension, the Securities Commission appointed Proctor and Associates to investigate the conduct of Remo Investment Brokers and Interfin Securities. This power is derived from section 103(1) of the Securities Exchange Act which empowers the Securities Commission to direct an inspector to conduct an investigation where:

“(e) The Commission has reasonable grounds for believing that a licensed person or board of a registered securities exchange or operator of a central securities depository, or any person connected with such a person, board or operator, has committed an offence under this Act, other than an offence arising out of conduct referred to in paragraph (a) or (b); or…,.”

Upon completion of an investigation, an inspector is required, in terms of section 104(1), to forward the report to the Securities Commission. On receipt of a report from the inspector, the Securities Commission is required, under section 104(2), to forward the report to the licensee and invite the licensee to make representations to it on the conclusions of the inspector and the recommendation.

On 7 May 2012, the Securities Commission sent a copy of the report from Proctor and Associates to Remo Investment Brokers and requested a written response within a period of thirty days. Remo Investment Brokers responded by a letter dated 8 May 2012.

Section 104(2) of the Securities Exchange Act [Chapter 24:25] provides in relevant part:

“On receipt of a report in terms of subs (1), the Commission shall -

(a) Send a summary of the conclusions reached in the report, and any recommendations made therein, to the licensed person, committee of the registered securities exchange, or operator of the central securities depository, as the case may be, that was the subject of the investigation; and

(b) Invite the committee, licensed person or operator concerned to make representations on the conclusions and recommendations set out in the summary.

3. A licensed person, committee of a registered securities exchange or operator of a central securities depository that has been sent a summary of conclusions and recommendations in terms of subsection (2) may, within thirty days, submit to the Commission representations on any of the conclusions or recommendations.”

On 23 May 2012, the Securities Commission advised all the appellants, in writing, that it intended to cancel the licences of the first two and impose sanctions on the last two, and, as a consequence, all the appellants were invited to appear before the Commission in person to make representations.

Subsequent to the letter of 23 May 2012, all the appellants appeared before the full Board of the Commission and made representations on the proposed action intended by the Commission against each of them. On 7 June 2012 the Commission proceeded to cancel the two licences and imposed the sanctions which are the subject of this appeal.

Having confirmed that the cancellations were effected under section 105 of the Securities Exchange Act, the court a quo also found that the cancellations were not done in a summary manner but after due consideration of a report presented to it by Proctor and Associates following upon an investigation into the activities of the appellants and Interfin Securities.

Section 48 of the Securities Exchange Act, on which the appellants hinge their appeal, reads:

48 Cancellation of licence

(1) Subject to subsections (2) and (3), the Commission may, by notice in writing to the holder, cancel a licence if the Commission has reasonable grounds for believing that…,.

(a) The holder has ceased to carry on business; or

(b) The licence was issued in error or through fraud or the misrepresentation of a material fact by the holder; or

(c) The holder has contravened any provision of this Act or any term of/or condition of the licence…,.; or

(d) The holder misrepresents the facilities he or she offers to the public; or

(e) The holder has become disqualified to hold a licence in terms of section thirty-nine; or

(f) The holder no longer meets any prescribed financial requirements for carrying on any activity authorised by the licence; or

(g) The holder, or any employee or agent of the holder, has been guilty of any act or omission in the conduct of the holder's business that has resulted or is likely to result in prejudice to members of the public; or …,.

(h) n/a; or

(i) n/a;

(2) Before cancelling a licence in terms of subsection (1), the Commission shall notify the holder, in writing, that it proposes to cancel the licence and of the Commission's reasons for proposing to do so and shall give the holder of the licence an adequate opportunity to make representations in the matter….,.

Provided that, if the Commission believes, on reasonable grounds, that it is not possible to notify the holder personally, the Commission shall publish a notice in the Gazette and a newspaper circulating in the area in which the holder carries or carried on business, stating that the licence will be cancelled unless the holder lodges an appeal with the Administrative Court in terms of section one hundred and eight within thirty days from the date of publication of the notice in the Gazette.

(3) The Commission shall not cancel a licence in terms of subsection (1) -

(a) Until -

(i) The period within which an appeal may be lodged in terms of section one hundred and eight has elapsed; or

(ii) The thirty day period referred to in the proviso to subsection (2) has elapsed, where a notice was published in terms of that proviso;

unless the holder has consented to its cancellation;

(b) If an appeal is lodged in terms of section one hundred and eight, until the appeal has been abandoned or withdrawn, or, where it has proceeded to finality, until the Commission is notified that its decision has been upheld.

(4)…,.”

One must look at the purpose and provisions of an Act in order to interpret the different sections forming that Act.

In construing the meaning of a section it is necessary to look at the Act generally to see what the scope of it is and whether the section accords with the scope and intention of the Act. It then becomes possible to draw a conclusion as to its meaning, considering the terms of the enactment.

The piecemeal approach advocated by the appellants does not accord with principles of construction of statutes.

In my view, it is impossible to know the intention of the legislature without enquiring further and ascertaining the context in which the Legislature intended to regulate.

In S v Fikizolo 1978 (2) SA 676, VAN RHYN J stated:

“It is a fundamental principle that the intention of the Legislature must be inferred from the words which the Legislature used, and, in Du Plessis v Joubert 1968 (1) SA 585 (A) at 595 BOTHA JA stated the following in this regard:

'Only a clear and indubitable, particular intention of the Legislature, and not merely an assumed intention can justify a departure from the usual meaning of words and then only if the words are amenable to another meaning.'”

Moreover, the whole piece of legislation must be examined to determine the intention of the Legislature. It is equally clear that one section can throw light on the intention of another section:-

“The correctness of the statement that the whole Act must be taken into account has been adopted so generally in our practice as to be a matter of course, that our courts have seldom found it necessary to stress this.” STEYN Die UITLEG van WETTE, 4th ed…,.

Stripped bare of the verbiage, the process of cancellation under section 105 of the Securities Exchange Act [Chapter 24:25] is preceded by an investigation of the licence holder. Any report from the investigation is availed to the licence holder for comment, and, in addition, the Securities Commission is obliged to call upon the holder to make representations to it before any sanction is imposed.

There is no provision for the suspension of a licence under section 48 of the Securities Exchange Act prior to its cancellation.

In fact, the provisions of section 48 do not contemplate a situation where the holder has been the subject of an investigation under section 49.

Where a licence is cancelled under section 48(1), such cancellation is made subject to the provisions of subsections (2) and (3) of section 48. Sub-section (2) enjoins the Securities Commission to notify the holder, in writing, that it proposes to cancel the licence; the reasons for proposing to do so; and, further to this, to afford the holder of the licence an adequate opportunity to make representations. In the event that the Commission believes, on reasonable grounds, that it is not possible to notify the holder personally, the Commission is permitted to publish a notice in the Gazette and a newspaper circulating in the area in which the licence resides or is situate, stating that the licence shall be cancelled unless the holder lodges an appeal with the Administrative Court in terms of section 108 of the Securities Exchange Act.

It cannot be gainsaid that all the actions by the Securities Commission, after receipt of the inspector's report, were consistent with the provisions of section 104.

All the appellants were availed the opportunities afforded to a registered person or a licence holder to be heard in terms of that section prior to the Commission taking any action subsequent to an investigation. None of the appellants have denied that the report was sent to them, that they were requested to make representations, or, further, that they appeared before the Commission before sanctions were imposed upon them on an individual basis.

The procedure adopted by the Securities Commission, in its dealings with the applicants, is more consistent with the provisions of section 105 as opposed to section 48 of the Securities Exchange Act.

The latter section envisages a situation where the licence holder is informed of the sanction that the Securities Commission intends to impose and to then avail the licensee an opportunity to make representations. Under section 105, the licensee is investigated and a report of the investigation is availed to the licence holder for comment. Over and above this, the licence holder is provided with an opportunity to be heard by the Commission.

As a consequence, the requirement in section 48(3), obliging the Securities Commission not to cancel a licence until the opportunity given to appeal to the Administrative Court becomes obvious.

Unlike the procedure provided for under section 105, a cancellation effected under section 48 is summary and the licensee is not assured of an opportunity to make representation before the cancellation. Thus, there is need for the cancellation not to be effected before the appeal process provided for under section 108 has been exhausted.

There is no such requirement under section 105.

It is also pertinent to note that under section 105, the Securities Commission is given the discretion to impose a sanction before affording the holder an opportunity to make representations if it considers that immediate action is necessary to prevent harm to the licensed person, its employees, agents, other securities, or members of the public.

In this case, all the appellants were afforded an opportunity to make representations before the cancellations were put into effect and the sanctions on the last two were imposed.

In proceeding under this section, the Securities Commission is not required to have regard to the provisions of section 48(3). The distinction is obvious. However, any powers exercised by the Commission under section 105(1) are made subject to subsection (2) of the same section which provides:

“Before taking any action referred to in subsection (1), the Commission shall -

(a) Inform the person, committee or operator concerned, in writing, of the action it proposes to take; and

(b) Afford the person, committee or operator concerned an adequate opportunity to make representations in the matter;

Provided that, where the Commission considers that immediate action is necessary to prevent irreparable harm to the licensed person, registered securities exchange or central depository or its members, creditors or participants, the Commission may take such action before affording the person, committee or operator an opportunity to make representations in terms of this subsection.” 

In this Court, the appellants submitted that the Securities Commission had, contrary to the provisions of section 105(2) of the Securities Exchange Act [Chapter 24:25], not provided them an adequate opportunity to make representations as to why the licences of Remo Investment Brokers and Mahomed Iqbal Mahmed should not be cancelled.

Their contention, that the learned President in the court a quo did not address that issue, has substance.

It is trite that an appeal to the Administrative Court is an appeal in the wide sense.

The appellants could have, if they had chosen to do so, led evidence before that court in order to ensure that whatever irregularities the Securities Commission may have been guilty of were corrected.

They did not avail themselves of that opportunity.

In Watchtower Bible & Tract Society of Pennsylvania & Anor v Drum Investments (Private) Limited & Anor 1993 (2) ZLR 67 (S), GUBBAY CJ, remarked as follows…,:

“I am satisfied that the appeal from the decision of the Rural Council to the Administrative Court is an appeal in the first sense above, an appeal in the wide sense. I accept the comment of the court in the Jones case supra that we are dealing with 'not so much a re-hearing as the first full inquiry'. But that comment does not take the case out of the category; it puts it more firmly in it.

The main reasons why the appeal falls into the wide category are that the Act, in providing for the appeal, authorises the Administrative Court to 'make such order as it deems fit' (section 39(1) of Act 22 of 1976), and that evidence is, for the first time, led and examined in accordance with the rules of a court of law.

I do not think it is possible to argue that even though this is a category one appeal, an appeal in the wide sense, the onus may nevertheless be on the objector. The whole point of the formulation which I have set out is that the appellate tribunal (in this case the Administrative Court) is starting again. It is deciding afresh the merits of the application, not the merits of the Rural Council's decision. The formulation makes sense only if one accepts that the onus is where it was in the original application.”

A failure to deal with an issue that has been placed before a court constitutes a misdirection.

However, this Court is in as good a position as the court a quo to determine the point raised by the appellants.

However, as submitted by counsel for the respondent, notwithstanding the failure by the court a quo to address this particular aspect, the record shows that the Securities Commission complied with the requirements of section 104 and 105.

The court has already dealt with the instances of the appearances by the appellants before the full Board of the Securities Commission in this judgment.

Over and above those representations, the appellants communicated with the Commission, in writing, after receipt of a letter dated 17 May to which was attached the report from the inspector and calling upon the appellants to respond to the report in writing within thirty days.

On 29 May 2012, John Motsi addressed a letter to the Securities Commission in which he stated the following:-

“We refer to your letter dated 17 May 2012 to ourselves on the above matter and advise that we have responded as per paragraph 3 of your letter. Please find attached response for your attention.”

In casu, in addition to the written responses, during the appearance of Mahomed Iqbal Mahmed before the full Board, on 29 May 2012, the record reveals that he was availed an opportunity to produce additional documentary evidence in response to the report by the inspector. The record reflects that fresh evidence was produced to the Securities Commission on 29 May and 1 June 2012. The proceedings of 7 June 2012 were at the appellants' request. There never was a complaint during the intervening period, before the cancellation of the licences, that the appellants had been denied an opportunity to be heard.

In this connection, attention is drawn to the remarks of STEENKAMP AJA in IMATU v MEC, Environmental Affairs ETC, Northern Cape 1999 (4) SA 267 to the following effect:

“Mr Van Wyk also referred to the various meetings and submitted that there was no proper consultation or negotiation with second applicant prior to first respondent's decision not to negotiate a new service framework before or on 8 September 1998.

This conclusion is not factually correct because the second applicant was invited to put forward an alternative scheme to provide primary health services and did, in fact, do so but his proposals were referred back to second applicant to put alternative models on the table because there was no duty on the first respondent to come forward with new models.

If a process for a fair hearing is set in motion then the person who is prejudiced should come forward and put his case to enable the other parties to consider these alternative proposals. See BAXTER (op cit at 546).”

I am of the view that all the appellants were given an adequate opportunity to be heard before the cancellation of the two licences and that the Securities Commission complied fully with its obligations under the Securities Exchange Act. This view is fortified by the dicta in Duly Holdings v Chanaiwa 2007 (2) ZLR 1 (S). In that matter, GWAUNZA JA stated:

“To the extent the respondent was given an opportunity to answer to the charges and present his side of the story, he should not be heard to say that there was no observance of the audi alteram partem rule. The court a quo correctly noted in its judgment that the rules of natural justice required no more than that the domestic tribunal acts according to the common sense precepts of fairness procedures followed.

Given the circumstances outlined above, I respectfully disagree with the court a quo's conclusion that it could, in casu, not be said that the rules of natural justice were observed. I am satisfied that the respondent was, therefore, not prejudiced in any way by the disciplinary procedures followed.

The appellant argues, correctly, that the adoption of the disciplinary procedures not specifically outlined in the Code finds support in ZFC v Geza 1998 (1) ZLR 137 (S) where this court emphasized the importance of flexibility in the conduct of disciplinary tribunals, and the principle that they were there to conduct an enquiry. It cannot, in my view, be said in this case that the disciplinary tribunal did not conduct an enquiry.”…,.

Those remarks apply with equal force to the circumstances of this appeal and I respectfully associate myself with them.

The Securities Commission is a disciplinary and regulatory body set up in terms of the Securities Exchange Act [Chapter 24:25]. Perforce, its procedures are less rigid and formal than would be required of a court of law. The flexibility referred to in the case of ZFC v Geza 1998 (1) ZLR 137 (S) would be a necessary feature in the conduct of its proceedings. It is not required to abide by a set of formal rules in its proceedings as is required of a court of law. The only rules provided for under the Securities Exchange Act relate to the regulation of securities and licensed persons and the conduct of their functions in terms of the Securities Exchange Act, which rules however do not prescribe the manner in which proceedings by the Securities Commission should be conducted.

A reading of the Securities Exchange Act [Chapter 24:25], however, establishes that irrespective of whether the Securities Commission cancels a licence under section 48 or section 105, the Securities Exchange Act has provided that the Commission complies with the audi alteram partem principle before cancellation of a licence or the imposition of any other sanction under the Securities Exchange Act.

Notwithstanding the failure by the court a quo to address the question as whether the Securities Commission had given the appellants an opportunity to be heard, the finding that the cancellation of the licences was effected in terms of section 105 of the Securities Exchange Act is correct and cannot be faulted. 

I find no basis for overturning the conclusion by the court in that regard....,.

The position is different when one considers the cases of Rezana Ebrahim and John Motsi.

On 24 May 2012 each of them received a letter from the Securities Commission inviting them to make representations in respect of their conduct in the affairs of Remo Investment Brokers. Rezana Ebrahim was not a licensed person under the Securities Exchange Act, but she was an approved Compliance Officer. She was not specifically charged with an offence, but, as a Compliance Officer, she confirmed that she was the ears and eyes of the Commission with Remo Investment Brokers. The Commission decided to permanently disapprove her as Compliance Officer. She was further advised that she would not be employed in that capacity in this country.

John Motsi was not charged with a specific offence nor was his licence cancelled. He was however sanctioned to work under the supervision of a senior dealer for a period of one year.

There is uncontroverted evidence that he is in fact the most senior dealer in this country.

In respect of the two, the principles relating to the audi alteram partem rule, which requires that a party be afforded a fair hearing, were not adhered to. They were sanctioned in the absence of having specific charges preferred against them.

In relation to John Motsi, he was advised that he had not committed any offence, and, that merely due to his employment with Remo Investment Brokers, it was decided to sanction him.

I find no justification for the actions of the Securities Commission against Rezana Ebrahim and John Motsi. The court a quo ought not to have confirmed the sentences against them.

The appeal succeeds, in part, to the extent that the sanction imposed..., in respect of Rezana Ebrahim and John Motsi is set aside in its entirety....,.

1....,.

2....,.

3. The appeal by the third and fourth appellants is allowed with costs.

4. The order of the court a quo, in respect of the third and fourth appellants, is set aside and substituted with the following:

“(a) The appeal is allowed with costs.

(b) The restrictions placed on the third and fourth appellants are hereby set aside.”

Pleadings re: Approach to Pleadings, Pre-Trial Proceedings, Disparities with Oral Evidence and Unchallenged Statements


On 20 May 2011, the Securities Commission requested all securities dealing firms to declare such loans as they might have obtained and a list of any clients' shares that might have been pledged as security for any loan.

Remo Investment Brokers rendered a nil return, which, as matters turned out, was false.

The appellants admitted that the return was false but gave the alleged absence of Mahomed Iqbal Mahmed from the country as an excuse. The appellants could not explain why the record was not corrected subsequent to his return.

Section 65 of the Securities Exchange Act [Chapter 24:25] reads in relevant part:

“(1) The rules of a registered securities exchange shall make adequate provision for such of the following matters as are appropriate to its functions -

(a) n/a

(b) In regard to membership of the exchange -

(i)…,.

(ii) Ensuring that -

(c) Members are of good character and integrity, or, in the case of members that are corporate bodies, that they are managed and controlled by persons who are of good character and integrity.”

The court a quo concluded that by making a false declaration as aforesaid, the first and second appellants demonstrated the absence of professionalism and integrity in their business dealings.

The Securities Commission, as the regulator under the Securities Exchange Act, is obliged to ensure that high standards are maintained by securities dealers. It did not place either the first or second appellants in good stead to claim that the return was done during the absence of Mahomed Iqbal Mahmed from the country.

As members of a registered securities exchange are required and meant to be of good character and integrity, it was the finding by the Securities Commission, which finding the court a quo confirmed, that Mahomed Iqbal Mahmed was not a fit and proper person to hold a licence as provided for in section 41(1)(c) of the Securities Exchange Act. Mahomed Iqbal Mahmed was the principal dealer in Remo Investment Brokers. The Securities Exchange Act requires that a person in that position should have the attributes of good character, honesty, and integrity in order to ensure efficiency, honesty, fair practice and fair competition in relation to dealings with other exchanges.

It was pointed out by counsel for the respondent that the appellants admitted guilt in respect of the failure to disclose the financial transactions as well as the false declaration. Having pleaded guilty to the charges before the Securities Commission, the attempt to run away from those admissions, on appeal, cannot be regarded in a serious light.

In DD Transport (Pvt) Ltd v Abbot 1988 (2) ZLR 92 (S) GUBBAY JA…, when discussing formal admissions, stated:

“But, this admission in the plea is of the greatest importance, for it is what Wigmore (paras 2588-2590) calls a 'judicial admission' (of the confession judicialis of Voet (42.2.6)) which is conclusive, rendering it unnecessary for the other party to adduce evidence to prove the admitted fact, and incompetent for the party making it to adduce evidence to contradict it.

See also Phipson 7ed p18).

Wigmore loc cit, speaking of judicial admissions in general, refers to the Court's discretion to relieve a party from the consequences of an admission made in error. It does not seem to me that such a discretion could be exercised, in a case where the admission has been made in a pleading, in any other way than by granting an amendment of that pleading.

These dicta were approved by MACDONALD ACJ (as he then was) in Moresby-White v Moresby-White 1972 (1) RLR 199 (AD) at 203E-H; 1972 (3) SA 222 (RAD) at 224.”

Constitutional Rights re: Equal Protection of the Law, Non-Discrimination, Positive Discrimination and Classification


This is an appeal against a judgment of the Administrative Court by which the court dismissed the appeal to that court against a decision of the Securities Commission of Zimbabwe (“the Commission”) cancelling the licences of the first and second appellants and imposing sanctions upon the third and fourth appellants.

The first appellant, Remo Investment Brokers (Pvt) Ltd (“REMO”), is one of the longest established registered securities exchanges within Zimbabwe. The second appellant, Mahomed Iqbal Mahmed (“Mahmed”), is a securities dealer and is also the Managing Director of Remo Investment Brokers (Pvt) Ltd. The third appellant, Rezana Ebrahim (“Ebrahim”), is married to Mahomed Iqbal Mahmed and is a Compliance Officer for Remo Investment Brokers (Pvt) Ltd. She and Mahomed Iqbal Mahmed are the beneficial owners of Remo Investment Brokers (Pvt) Ltd. The fourth appellant, John Motsi (“Motsi”), is a Registered Securities Dealer.

Following upon turbulence within the securities sector, the Securities Commission of Zimbabwe suspended Remo Investment Brokers (Pvt) Ltd from trading for a period of six months. After the suspension of REMO, the Commission instituted investigations, through Proctor and Associates, who compiled a report. Armed with that report, the Commission charged REMO and Mahomed Iqbal Mahmed of contravening certain specified sections of the Securities Exchange Act [Chapter 24:25] (“the Act”).

The appellants were invited to make representations to the charges. Ultimately, the Securities Commission of Zimbabwe confirmed the convictions and cancelled the licences of Remo Investment Brokers (Pvt) Ltd and Mahomed Iqbal Mahmed for a period of five years after which they could re-apply for registration. Rezana Ebrahim was advised by the Commission that she was permanently disapproved as a Compliance Officer. John Motsi was able to retain his Dealer's licence but was advised that he had to practise under a supervising senior broker for a period of one year....,.

The first charge related to the appellants participating in non-permissible activities in breach of section 42(1) of the Securities Exchange Act [Chapter 24:25], in terms of which section a licence holder is authorized to carry out one or more of the activities specified in the definition of licensable activities.

The allegation against Remo Investment Brokers was that it borrowed money from Interfin Securities which allegation Remo Investment Brokers admitted. It was further alleged that Remo Investment Brokers had lent the money it borrowed from Interfin Securities to its own clients....,.

It is not disputed by any of the appellants that the lending of money is not a licensable activity as defined in the Securities Exchange Act....,.

The extending of loans to other persons was not one of the functions that Interfin Securities was permitted under its licence. As a consequence, Remo Investment Brokers could not legally borrow from Interfin and to that extent it participated in a non-permissible activity....,.

Mahomed Iqbal Mahmed was the principal dealer in Remo Investment Brokers....,.

It was contended on behalf of Mahomed Iqbal Mahmed that he received a harsher sentence than what was meted to Zengeni of Interfin Securities.

The Securities Exchange Act empowers the Securities Commission to impose any sanction from issuing a warning to the cancellation of a licence.

In imposing such sanctions, under section 105 of the Securities Exchange Act [Chapter 24:25], the Securities Commission exercises a discretionary power. Implicit in the exercise of that discretion is the fact that the Securities Exchange Act does not impose any limitations on the Commission on the extent of the duration of the period for which a licence may be suspended or cancelled as the case may be.

It is trite that the exercise of such discretion can only be interfered with in limited circumstances. See ZB Financial Holdings v Manyarara SC03-12; Malimanji v Central Africa Building Society 2007 (2) ZLR 77 (S); Barros v Chimponda 1999 (1) ZLR 58 (S).

Mahomed Iqbal Mahmed has not argued a legal basis to justify the interference with the cancellation of his licence by this court, and it is not enough to argue that he should have received a similar sentence to that imposed on Zengeni. In any case, it has not been suggested that the Securities Commission exercised its discretion improperly.

Whilst it is accepted that the period of five years for which the licence was cancelled appears a bit harsh, it cannot, by any means, be said that such penalty is irrational. For that reason, any interference with the period cannot be warranted or justified by an Appellate Court.

Discipline re: Disciplinary Hearings iro Guilt By Association


This is an appeal against a judgment of the Administrative Court by which the court dismissed the appeal to that court against a decision of the Securities Commission of Zimbabwe (“the Commission”) cancelling the licences of the first and second appellants and imposing sanctions upon the third and fourth appellants.

The first appellant, Remo Investment Brokers (Pvt) Ltd (“REMO”), is one of the longest established registered securities exchanges within Zimbabwe. The second appellant, Mahomed Iqbal Mahmed (“Mahmed”), is a securities dealer and is also the Managing Director of Remo Investment Brokers (Pvt) Ltd. The third appellant, Rezana Ebrahim (“Ebrahim”), is married to Mahomed Iqbal Mahmed and is a Compliance Officer for Remo Investment Brokers (Pvt) Ltd. She and Mahomed Iqbal Mahmed are the beneficial owners of Remo Investment Brokers (Pvt) Ltd. The fourth appellant, John Motsi (“Motsi”), is a Registered Securities Dealer.

Following upon turbulence within the securi