MEE explains ZAFFICO sale

THE Movement for Economic Emancipation has explained that public listing of an institution amounts to a sale.

And MEE says it is possible for a company listing on the stock market to put a restriction on who buys shares in it, saying there’s a high possibility of the Chinese buying a bigger share of the listed stock.

In a statement issued by its interim president Given Chansa, the MEE stated that listing on the stock market by a company “actually refers to the practice of buying and selling stocks or companies, in full or in part, that is buying and selling of companies as a whole chunk or in small chunks, also known as Shares or Equity”.

The government has said it is not selling ZAFFICO but only listing it on the stock market.

So far, chief government spokesperson Dora Siliya, national development planning minister Alexander Chiteme and Bowman Lusambo of Lusaka have challenged UPND leader Hakainde Hichilema to produce evidence that ZAFFICO had been sold or they would resign.

“The public have reached out to Movement for Economic Emancipation (MEE) and have asked that we help clarify the on-going public discussion on whether the government of Zambia is selling ZAFFICO or not. Here we endeavour to provide a simple explanation of the meaning of what the government of Zambia is proposing to do and whether that amounts to selling ZAFFICO or not…On 2nd November 2018, Madam Dora Siliya, the government spokesperson issued the following tweet from @Dora_Siliya account:
‘The rumours circulating especially in Kalulushi that ZAFFICO has been sold are false. Plans are underway for a Public listing of the Company with emphasis to reserve majority shares for Citizens. Minister of Lands, Hon.Jean Kapata will give more details on the matter. God Bless’. On 5th November, 2018, Dora Siliya, the government’s chief spokesperson again tweeted the following: ‘Govt wishes to restate that it is NOT in receipt of any proposal from Chinese or any other investor on the Sale of ZAFFICO. In fact Govt has no intention of selling ZAFFICO. IDC will hold a press briefing to confirm the same at Garden Court in Kitwe on Tues 6 Nov at 10hrs’,” Chansa stated.

“From the above, the government of Zambia has told us that: It is planning a public listing of ZAFFICO; It has no plans to sell ZAFFICO to the Chinese or any other Investor. We know from the above that the government has plans to undertake a public listing of ZAFFICO. Does Public Listing of a company = Selling of a company? Yes it does. Very simple. A public listing of a company happens on a Stock Exchange. In this case the government will list ZAFFICO on Lusaka Stock Exchange (LuSE).
A Stock Exchange = A Stock Market. In this context exchange actually refers to the practice of buying and selling stocks or companies, in full or in part, that is buying and selling of companies as a whole chunk or in small chunks, also known as Shares or Equity.
Listing in this case means, placing or ukutantika in Bemba.”

He stated that any company that goes to the stock market not to buy is there to be sold.

“So if you take a company and you place it, list it or watantika at the market place and that company is not there to buy something, what is it that that company is there to do? It is there to be sold. Whether the company ends up being sold in full or in part and to whom and in what percentage configuration is inconsequential and purely academic,” Chansa stated.

“The exercise is a pure and simple selling of a company.Think about it another way. Suppose you had 10 boxes of tomatoes which you carry on your wheelbarrow and place them (watantika) at Chisokone Market. What have you gone to actually do at Chisokone Market with your tomatoes? 0Are you there to buy more tomatoes? If not, most reasonable people would expect that you have come to sell your tomatoes. Why else would someone come and ‘tantika’ tomotoes at Chisokone Market? Now suppose you rightly go ahead and sell only four out of your 10 boxes of tomatoes? Would you say that you have not sold any tomatoes and that it was never your intention to sell your tomatoes? Of course, you did sell tomatoes. You can’t possibly argue to say that because I did not sell all my boxes of tomatoes, therefore I neither sold any tomatoes nor had I any intention of selling any tomatoes.”

He wondered then what ZAFFICO shares would be on the stock market for other than to be sold.

“In this case, the government is listing, placing or ‘tantika’ ZAFFICO shares on the shares market. For what purpose other than to sell them?” Chansa wondered.

He stated that for now, it was not clear the amount of shareholding in ZAFFICO would be placed on the stock market and whether or not the Chinese had an interest in the company.

“The government of Zambia has not told us who exactly they will sell them to except that they will ‘tantika’ them at the market. It is worth noting that it is possible to place a restriction on who is eligible to subscribe to an initial public listing of a company and therefore entirely possible to favour institutional investors against private investors and vice versa. They have, however, assured us that they intend to reserve the majority of shares for citizens,” stated Chansa.

“Whilst this assurance by the government is welcome, we question how the government plans to ensure the reserved shares actually end up in the hands of citizens given that most of us have very little or no access to capital. MEE will be sure to keep an eye on this and we will inform the public accordingly as events unfold. What we already know is that once listed, placed or ‘tantikad’ at Lusaka Stock Exchange, anyone with money would be free to buy the ZAFFICO shares, including all foreigner investors and seeing the Chinese have a lot of money and they seem to have a huge appetite for quality wood products, it seems more than likely that the Chinese too will buy the ZAFFICO shares.”

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