ZIMBABWE Law and Practice Contributed by: Norman Chimuka and Tonderai Sena, ChimukaMafunga Commercial Attorneys
It is important to note that a shareholders’ agreement, company’s articles of association or rules of a securi- ties exchange may contain further restrictions on the transfer or disposal of shares. These could include, but are not limited to, the exercise of pre-emptive rights. 3.3 Security Over Shares Shareholders are entitled to grant security interests over their shares, for example, through pledges, mort- gages, or liens, provided that they follow the neces- sary legal formalities and any restrictions in the com- pany’s articles of association or applicable laws and regulations, including obtaining approvals from the existing shareholders. 3.4 Disclosure of Interests Shareholders are required to disclose their beneficial interests in a company to the directors of the com- pany. There is no prescribed format for disclosing such interests. Apart from this, shareholders of pri- vate companies are generally not obliged by any law to disclose their interests to any other person. All companies are required to regularly file with the Registrar of Companies up-to-date information regarding the ultimate beneficial owners of a com- pany. Thus, companies may require shareholders to disclose their interests. This information, which is kept and maintained by the Companies Registry, shall be made available for inspection by the following: • the public by consent of a nominee or by virtue of a court order; • the Financial Intelligence Unit; or • by a law enforcement agency or designated finan- cial institution referred to in the Money Laundering and Proceeds of Crime Act [Chapter 9:24]. In addition, publicly listed companies are required to publish the beneficial interests of directors and major shareholders in their annual financial statements as required by Part IX of the ZSE Listing Rules. Shareholders of publicly traded companies have cer- tain disclosure obligations, which include the follow- ing:
• If a shareholder acquires more than 20% of the ordinary shares of a public company, they shall send written notice of the acquisition to the com- pany within 15 days (Section 235 (1) of the COBE Act). • If a shareholder intends to acquire a control block of shares in a public company (35% or more), they must within 30 days prior to the date of acquisition send written notice to the company stating their intention to acquire a control block of shares (Sec- tion 236 (1) of the COBE Act). • If a shareholder has acquired a control block of shares in a public company (35% or more), they must on the date of acquisition give notice to other shareholders of the acquisition (Section 237 (1) of the COBE Act). • If a shareholder has acquired a control block of shares in a public company (35% or more), they must within 60 days of the acquisition offer to purchase all the company’s shares at a price not less than the weighted average price of the shares (Section 237 (1) and (2) of the COBE Act). • A shareholder that intends to acquire a significant interest in a banking institution (5% or more) must disclose their intention to the banking institution and first obtain approval from the Registrar of Banking Institutions (Section 15B of the Banking Act [Chapter 24:20]). Generally, there is no regulatory filing which is made with the Companies Registry following a change of shareholding. That said, in specific industries, such as banking or securities trading, shareholders may be required to notify the regulatory authorities when acquiring or divesting a significant shareholding. 4. Cancellation and Buybacks of Shares 4.1 Cancellation In certain circumstances, shares can be cancelled after issue. The circumstances include but are not limited to the following: • redemption; • buyback by the company;
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