Listed companies decry over regulation

SHARE   |   Monday, 24 July 2017   |   By Kabelo Adamson

Some listed companies are concern at the proliferation of regulators which they say do not only increase their cost of compliance but have also brought in a state of confusion. A director at one of the listed companies at the Botswana Stock Exchange told this publication of how last year officials from the recently established Botswana Accountancy Oversight Regulatory Authority (BAOA) walked into their offices and introduced themselves before requiring them that they pay an amount of P10, 000. The amount paid is said to differ according to the size of the company and keeps shooting up depending on how bigger the company is. “Since then we never saw or heard from them again. They will probably show up when the next payment is due,” the director said, adding that regulators do not see themselves as part of the eco-system, but rather owning the system. As listed companies are under the regulation of the BSE, which itself is regulated by the Non-Bank Financial Institutions Regulatory Authority (NBFIRA), the procedure is that listed companies are also regulated by other relevant institutions depending on the nature of business for a particular company. For example, commercial banks will naturally fall under the supervision of Bank of Botswana. “What is happening right now is that everyone seems to be in their battle kingdom and see themselves as bosses of their kingdoms,” he said, adding that the regulators are not acting in the interest of the industry.

The establishment BAOA, which falls under the Ministry of Finance and Economic Development, has brought in confusion as it collects money from listed companies without any clear explanation according to listed company executives who spoke to this publication. BAOA has been established to ensure that the audit profession in Botswana gives investors and all stakeholders, accurate information for the protection of their investments. “This has also escalated costs of compliance as you would imagine companies have to recruit relevant officers to deal with all those issues. We need to rationalise these regulators,” charged the official. The common cry is that for a small market like Botswana, there is no need to multiply institutions doing the same work. This result is that the companies end up spending a lot of time in dealing with the regulators which has the potential to scare away investors. The BSE Market Development Manager, Thapelo Moribame, says their institution regulatescompanies according to the listing requirements which companies must comply with to have their securities listed on the stock exchange. “However, we are aware that companies are subject to other forms of regulation not from the Botswana Stock Exchange,” Moribame said in an emailed response, further suggesting that this publication seek clarity from the affected institutions.
A set of questions were sent to BAOA weeks ago were not responded to despite numerous promises by the Public Relations Office.

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