Change, Evelynne --- "Review of Mwenda, Contemporary Issues in Corporate Finance and Investment Law" [2000] MurdochUeJlLaw 42; (2000) 7(4) Murdoch University Electronic Journal of Law

Review of Mwenda, Contemporary Issues in Corporate Finance and Investment Law (Washington DC: Penn Press, 2000)

Author:	Evelynne Change
Issue:	Volume 7, Number 4 (December 2000)

Contents

• Introduction
• Discussion
• Conclusion

Introduction

1. Dr. Mwenda has once again emerged with a book whose timeliness and relevance cannot be overstated. The book aptly named Contemporary Issues in Corporate Finance and Investment Law provides a hands-on assessment of the current issues in corporate finance and investment law particularly as they relate to emerging economies. This, the author achieves by dividing the book into three thematic subject areas namely Legal Aspects of Regulating Finance in Emerging Economies, Legal Aspects of Equity Financing and lastly Contemporary Issues in Financial Services Law. These divisions help identify the more pertinent issues in the covered area and delineate the scope of the study to provide a clear and digestible view to the reader.

2. The author begins the book by discussing the thorny issues arising from the regulation of foreign direct investment. The stage for this is set through an examination of both the factors attracting investors to emerging economies and those that deter investor activity in these regions. An analysis is then made of the various incentives that developing countries have put in place to entice and sustain investor attention and the role that fiscal incentives play in this. The author rightfully questions whether such incentives are adequate particularly in emerging economies, where in his words, "imperfect market conditions affect investor sentiment and lead to volatile capital flows."

3. The reader will benefit from Dr. Mwenda's holistic and interdisciplinary perspective. Indeed, a rare in-depth understanding and practical evaluation of the experience and prevailing situation in his native Zambia makes this analysis invaluable to the student, politician, investor and scholar interested in African economies. This is not, however, to suggest that the analysis will only be useful to readers interested in or focused on the African continent. References, analyses and comparisons are made between the African experience and experiences in other emerging economies, such as Asia, Eastern Europe and Latin America. Insights from these jurisdictions make the book a worthwhile choice for any reader.

   Discussion

4. In this first segment of the book, the author sheds some light on the murky waters developing countries must navigate if they are to attract and keep the increasingly indispensable foreign investors within their borders. This is an apt subject because it comes at a time when donor induced reforms and structural adjustment programs aimed at developing countries have led to growing investor concern and an increase in the role of multinational corporations in channeling foreign investment to these countries.

5. The second part of the book focuses on the legal aspects of equity financing. In the preamble to this section, the author limits the scope of his analysis to arguments on questions of law and policy surrounding equity financing. As a result this segment for the most part dwells on the theories surrounding the shareholder's obligation to pay up for his shares and redeem his equity. In addition the author makes a useful comparison between the law in Zambia on payment for shares and that in the United Kingdom. The segment concludes with a call that jurisdictions, which still apply the concept of par value, must adapt to commercial reality and avoid such constraints.

6. In this section, the author adds his contribution to an area in which much ink has been spilled in scholarly discourse. Whether the arguments raised justify the suggested solution is a matter to be decided by the reader. Dr. Mwenda is a widely published author in the area of Corporate Finance and it is no doubt that the reader will benefit from the knowledge, expertise and insights espoused in this treatise.

7. In the third and last section of the book, the author explores the current issues in financial services law. The emphasis is on the performance of emerging capital markets and the various constraints affecting their development. A thorough examination is made of the structure, performance, prospects and features of upcoming stock markets. The issues making the crux of the argument are well elucidated through the aid of useful charts and diagrams depicting the performance of these markets, their capitalization and the principal players therein. A case is made for the integration of the African stock markets to facilitate more efficient and competitive capital markets in the region. The arguments raised in support of this view will definitely provide food for thought for the reader.

   Conclusion

8. At this time, there is not much literature on corporate finance and investment law from an African perspective. In a characteristic way Dr. Mwenda has attempted to bridge this divide though academic and professional scholarship. The subject area is covered uniquely through articulate and well-marshaled arguments around which integrated critical analyses are made and conclusions drawn. This book marks an invaluable contribution to the corpus of knowledge in the area. It is my hope that Dr. Mwenda will continue to make such worthwhile contribution through prolific authorship.