Kasukuwere not backing down on StanChart indigenisation

THE National Indigenisation and Economic Empowerment Board has written to Standard Chartered Bank Zimbabwe threatening to revoke its licence if the British-owned bank does not comply with the country's indigenisation laws.

NIEEB chief executive Mr Wilson Gwatiringa confirmed yesterday that they had written to the bank and other foreign-owned companies warning them that action would be taken against them for defying the law.

"We want all (foreign-owned companies in Zimbabwe) to comply with the law. Those interested in doing business in Zimbabwe should comply with the law," he said.

While Indigenisation and Empowerment Minister Saviour Kasukuwere insists that banks should fall in line by complying with legislation passed by Parliament, Reserve Bank of Zimbabwe Governor Dr Gideon Gono has spoken against indigenising banks through transfer of equity to indigenous people.

"All stakeholders of the bank and, indeed, of other banks are hereby advised not to panic or wantonly withdraw their funds from the bank as the central bank, which is the sole authority which issues and withdraws banking licences from players in the Zimbabwean financial sector, has not signalled any move in the direction intimated by NIEEB nor in any other way suggesting that Standard Chartered Bank will lose its business licence for any reason in the near future.
 
"The Reserve Bank Act, Chapter 22:15 Sections 6 (1) requires the central bank to: Section (c) foster the liquidity, solvency, stability and proper functioning of Zimbabwe's financial system and Section (e) to supervise banking institutions and promote the smooth operation of the payment system in Zimbabwe. Section 6 (1) (g) also requires the RBZ to act as banker and financial adviser to, and fiscal agent of, the State, among other functions.

"We have not, and have no intention of violating any of the above statutory functions and, specifically, we have not given any advice to the State which supports the position announced by NIEEB officials other than that whatever we do as Government, the action(s) must be legal, measured and for the benefit of the broad-based majority of Zimbabweans," Dr Gono said in a statement at the weekend in response to an earlier statement issued by NIEEB.

Finance Minister Tendai Biti has also clashed with Minister Kasukuwere over the indigenisation of the banking sector. He has opposed localisation of banks arguing the sector was largely indigenised and had few foreign banks.

But Minister Kasukuwere is adamant that no foreign-owned company is above the law.

Stanchart together with other foreign banks operating in Zimbabwe, namely Barclays, Stanbic Bank and MBCA, are at the centre of the tug-of-war over disposal of their equity to locals or other State- approved institutions.
 
Significant ground has been covered towards the indigenisation of some of the country's biggest corporates including Zimplats, Mimosa, PPC Zimbabwe, Old Mutual, Meikles Limited and Blanket Mine among others.

Mr Gwatiringa said that while the spotlight has tended to focus on big entities, indigenisation was, in fact, cross-cutting every sector of the economy.

"This is the normal work we do every day, writing letters to companies telling them to comply with the laws of the country. If they fail to comply punitive action (revoking licences) will be taken against them," said Mr Gwatiringa.
 
Other foreign-owned companies said to have recently received correspondence on the need to comply with the indigenisation laws include South African-owned sugar producer Tongaat Hulett and Sandvik Zimbabwe.

Government passed the Indigenisation and Economic Empowerment law in 2007 as part of measures to address imbalances of the past to bring the majority of indigenous people into mainstream economic activities.