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Old Mutual's Zimbabwe operations continue to 'run as normal'

by Staff reporter
13 Jul 2020 at 16:40hrs | Views
Old Mutual Zimbabwe says it is still seeking clarity on what the ruling Zanu-PF party meant when it said the group had been "ejected" from the country's financial system.

The insurance giant has been accused by Zimbabwean authorities of undermining the local dollar, as people could compare its share price on the London and Johannesburg stock exchanges with that on the Zimbabwe Stock Exchange to create an implied exchange rate between the Zimbabwean currency and the US dollar.

At first Zimbabwe authorities reacted by suspending the fungibility of its shares on the ZSE and the JSE, but this didn't stop use of the Old Mutual implied rate, which was higher than the official exchange rate.

Zimbabwe is facing a chronic shortage of foreign currency.

In another attempt to snuff out the implied rate, authorities then shut down trade on the entire ZSE.

On Friday, Zanu-PF went further and issued a confusing statement saying the insurance giant - the biggest investor on the ZSE - had been "ejected out of the country's financial system."

The statement left many asking what exactly it meant, as there has been no comment from the ministry of finance.

"We are working with all relevant stakeholders to seek clarity on the matter," said Old Mutual in a statement released Sunday evening.

The group said it has a "responsible business policy and will always continue to comply with all regulations and legislation within the countries where it operates".

It said all its services and operations are continuing to "run as normal" and are "financially stable and sound".

"We will ensure to continue to update you of any significant developments on our official company platforms," it states.

Source - fin24

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