Zimbabwean Govt Rejects Standard Chartered Bank’s Indigenisation Plan

Standard Chartered Bank Zimbabwe is on a collision course with Government after expressing reluctance to meet indigenisation thresholds in line with the empowerment laws.

The bank, owned by Standard Bank Plc, said it was exploring options to cede 10 percent ownership to indigenous people and have a minority listing on the ZSE.

Sources said last week Standard Chartered Zimbabwe was considering transferring 5 percent of its sharers to employees and another 5 percent to Stanchart Local Pension Fund and later list on the ZSE.

Government rejected the bank’s proposal because it fell short of indigenisation requirements, which demand that foreign-owned companies with an annual turnover of US$500,000, including mines, sell at least 51 percent of their equity to indigenous people.

“Standard Chartered has indicated that they want to retain the majority shareholding,” according to sources in the capital, Harare.

“They are arguing that it is in the best interests of Zimbabwe for Standard Chartered Plc to remain in control,” said the source.

“Their proposal does not amount to the 51 percent required by the law. They should consider other options to achieve the 51 percent threshold.”

Last week, Youth Development, Indigenisation and Economic Empowerment Saviour Kasukuwere met Standard Chartered chief executive (Africa Region) Diana Layfield, who had come to re-emphasise the need for Standard Charted Bank Zimbabwe to remain with Stanchart Plc majority shareholding.

Kasukuwere confirmed the meeting to the state-run Herald newspaper.

He said Government would not accept any plan that was not consistent with the law.

“The law is clear. It’s 51 percent shareholding to indigenous people, not the 10 percent they are talking about. Their plan is unacceptable,” he said,

Standard Chartered Bank Zimbabwe head of corporate affairs Ms Lillian Hapanyengwi said discussions with the Government were continuing but could not give more details citing confidentiality.

“Our plans are commercially confidential and we are not in a position to comment on the details,” she said.

“Standard Chartered has taken the conscious decision to continue to maintain our longstanding commitment to doing business in Zimbabwe.

“We remain committed to the long-term interests of our staff and customers in Zimbabwe, and to continuing to facilitate the development and growth of the economy.”

Last month, Standard Chartered and Barclays Bank were ordered to amend their indigenisation proposals or risk losing their operating licences.

Old Mutual is one of the big foreign-owned companies that has moved a major step towards complying with the indigenisation and empowerment law after agreeing to immediately localise its 25 percent equity in addition to various commitments to economic development.

Zimplats, the country’s largest platinum mining firm, has also agreed to re-submit a proposal in line with the indigenisation and empowerment law.

Foreign-owned firms are required to have, by 2015, fully completed implementation of the indigenisation process.