Exposé: Capital Market Capture at LuSE

The Lusaka Stock Exchange, a platform on which shares are traded, has for a couple of years been operating without regard for corporate governance, with its chairman in some instances effectively taking up management’s role.

Because of the breakdown in corporate governance, the LuSE has ended up employing a legal counsel and company secretary with less experience than the required five years for the post.

Our investigations reveal that the current legal counsel at LuSE, Miria Mazyambe, was only admitted to the bar during the April 2018 call day, falling below the required threshold, but she was employed anyway.

The Legal Counsel of the LUSE is responsible for compliance of listed companies and adherence to listing rules.

How, then, does a recently admitted advocate without proper experience at the bar police senior lawyers at listed companies?

To cover the expected inefficiencies, the LuSE has had to engage Lusaka lawyer Lewis Mosho’s firm to do legal opinions for the stock exchange.

But some workers within LuSE and the Securities and Exchange Commission have questioned the rationale behind the engagement of an external law firm for legal opinions when the institution had a legal counsel employed to do such kind of work.

Zambia Reports has established that this anomaly has been fully backed by the chairman, Mr Alfred Jack Lungu, who has also been under investigations for several matters.

So far, it has been established that Mr. Lungu, who has been granting protection to the current chief executive officer Priscilla Sampa, a close associate of his through her ex-husband Darlington Mwape that worked for the former, has on many occasions flouted the rules to dictate what decision management should take or who to employ based on patronage.

Ms Sampa is also closely linked to former finance minister Alexander Chikwanda who got her to LuSE.

Law enforcement agencies even have a dossier on Mr Lungu, which was even presented to the Director of Public Prosecutions but they hit a snag on who the complainant could be since LuSE is a private entity, it has been unearthed.

The matter required that someone within LuSE should lodge a complaint against Mr Lungu for abuse of authority when he wrote a letter to the former chief executive officer to withdraw a dismissal of finance manager Joel Mbulo who was facing a theft charge.

This is the man whom former finance minister Felix Mutati pushed into the Zambia Revenue Authority as a director.

But the current CEO, Ms Sampa, went further to even challenge the Anti-Corruption Commission investigator that the matter would go nowhere because there was no complainant from LuSE.

None of the shareholders nor board members were brave enough to make a complaint.

According to details unearthed by Zambia Reports, Mbulo, who was highly protected by the LuSE chairman and current CEO, forged signatures for Zandile Shaba and Mark O’Donnell.

Surprisingly, both Shaba and O’Donnell protected Mbulo.

In appreciation, Shaba  was rewarded with an Executive Director position at Madison Finance where Mr Lungu was chairman. And Madison Finance is owned by Mr Lawrence sikutwa, a loyal friend and financial supporter of UPND president Hakainde Hichilema.

She, however, was short-lived there as she left and before then, she employed Mbulo who forged her signature to be Operations Manager at Finance Securities where she was a 10 per cent shareholder with Mahtani.

Shaba is now Finance Bank Malawi managing director, we have established.

Additional data obtained from SEC reveals that Mbulo had been denied a license to conduct securities business since they had a dossier on him.

But that was contested by Mr Lungu, who, however, later withdrew the challenge for fear of being exposed as he has a bulk of matters that border on lack of financial sector integrity.


Source: Zambia Reports

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