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New Pick n Pay store in Harare. (Pic: Memory Mataranyika)
New Pick n Pay store in Harare. (Pic: Memory Mataranyika)

Pick n Pay partner opens new store amid $50m suit


Fin 24 - Jul 13th 2016, 14:26

Harare – John Moxon, the chairperson of Zimbabwe-listed retail and hotel conglomerate Meikles Limited, said his company is proceeding with a US$50m suit against the country's stock exchange. This comes after engagements to settle the two parties' dispute over its earlier suspension from the Zimbabwe Stock Exchange (ZSE) because of alleged manipulation of financial statements proved futile. 

The ZSE suspended trade in the company’s shares earlier this year. It said Meikles had overstated a debt it is owed by the Reserve Bank of Zimbabwe (RBZ).

Meikles has a heavy presence in the Zimbabwean economy, where it owns city and resort hotels in addition to a joint venture partnership with Pick n Pay in the country’s TM Supermarkets.

On Thursday, Pick n Pay opened a new shop in central Harare, its third in the Zimbabwean capital. Moxon refused to respond to questions on investment into the country's retail industry at a time of economic decline and waning profit margins. The new central business district store will raise competition levels among Harare retailers, where other operators such as OK Zimbabwe and Spar already have outlets.

It emerged on Thursday that there will be no speedy end to the dispute between Meikles and the ZSE, with Moxon saying that his company will proceed with litigation over the suspension of its stock on the Zimbabwean bourse. ZSE CEO Alban Chirume has already said the stock exchange will defend itself against Meikles' $50m damages suit.

“It is now appropriate that the company proceed with litigation. The company is the plaintiff and is demanding substantial damages from the ZSE, and certain of its officers in their personal capacities,” said Moxon.

This was after Meikles made a futile effort “to interact and perhaps reconcile with the ZSE”, according to Moxon. He said executives from his company who had met with the ZSE "regrettably found that there may initially have been some common ground, but subsequent inconsistencies from within the ZSE have placed doubt on this process”. This culminated in the decision to proceed with litigation.

Meikles previously said that the central bank has undertaken to repay its debt through treasury bills, which analysts say may not find ready takers in a market dominated by liquidity challenges and ballooning government debt. Moxon said on Thursday that although the bills had been committed, it was not certain that they would be readily accepted.

“The ultimate value of the funds which have largely, but not entirely, been committed in the form of treasury bills is still unknown. The greater number of these TBs which are about to be issued with satisfactory terms are still to be received by the company and are still to be placed in the market,” he said.

Munyaradzi Kereke, a Zimbabwean parliamentarian who sits on the finance and economic planning portfolio committee, said in February that the RBZ owed Meikles $34.1m as at the end of December 2008. He argued that this could not have reached the $90m figure Meikles said it was owed by the RBZ in its 2014 financials.From Fin24 

Read more about: zse | zimbabwe | retail | pick n pay | harare

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